Budget 2014: What to watch out for today
WHO: GEORGE OSBORNE
WHEN: 12.30PM TODAY
WHERE: HOUSE OF COMMONS
WHAT WE ALREADY KNOW
A facelift for the pound coin
Osborne will announce plans to give the £1 coin a facelift in his Budget today. This will see a new two-coloured 12-sided coin introduced in 2017 after a consultation.
Help to buy extended to 2020
The equity loan scheme set up to tackle the housing crisis is to be extended to 2020 for new homes. The Treasury expects 120,000 more homes will be funded as a result.
New garden city at Ebbsfleet
George Osborne has announced a plan to boost existing building projects at Ebbsfleet, Kent. The new garden city, the first in 100 years, will boast 15,000 new homes.
Five per cent tax cut on bingo
Announced earlier this month, the chancellor will reveal a tax cut for bingo halls from 20 per cent to 15 per cent, in line with the rest of the industry.
More help for flood victims
The chancellor will reveal an extra £140m for those affected by the floods this winter later today. The money will be spent on maintenance works.
100,000 extra apprenticeships
The Apprenticeship Grant for Employers will be expanded to 2015-16, providing an extra 100,000 placements for young people according to Treasury figures.
£222m for science and research
Osborne will announce plans to spend £222m on specialist science and research centres over the next five years. There will also be new PhD training centres.
Tax-free childcare extended
Plans to extend the government’s tax-free childcare scheme were previewed yesterday. This will mean £2,000 per child per year from the Treasury.
WHAT MIGHT HAPPEN
A change to the 40p tax rate
There is pressure on George Osborne to do something to help the squeezed middle – upping the 40p tax threshold by one per cent could be on the cards.
National insurance reforms
Cuts to NI for those who employ under 21’s will come into force in 2015, but these could be extended to include under 25’s or brought forward to 2014.
Changing stamp duty rates
Complaints about the stamp duty cliff edge have been getting louder of late, so we could see an extension of the nil rate for properties up to £250,000.
Business rate consultation
Like stamp duty, many businesses have been complaining that rates are unfair. Osborne could announce a consultation on how to change this.
Carbon price floor freeze
It’s likely that the chancellor will choose to freeze the carbon price floor in his Budget. This would benefit UK manufacturers and consumers.
A cap on lifetime ISA savings
The idea of a cap on the amount of money one person can save into an ISA over their lifetime isn’t new, but it’s gathering pace and could be a consideration for the Budget. It would be hugely controversial.
Personal allowance increase
The chancellor has already announced a rise to £10,000 this April, but a further increase to either £10,500 or £10,750 is widely expected.
Pension rate changes
A raid on pension relief for high-earners is a possibility but reforms to allow those with small pots to convert funds into cash seems more likely.
ECONOMIC FORECASTS
UK growth predictions
RBC Capital Markets believes growth for the fiscal year just coming to a close (2013-14) will be revised up to around 2.3 per cent. For the current calendar year, EY’s Item Club expects the Office for Budget Responsibility (OBR) to revise its growth forecast up to around 2.7 per cent. Inflation for this year is expected to be revised down, perhaps to below two per cent.
Public finance predictions
Growth and a stronger labour market is expected to improve public sector net borrowing. This could push borrowing down by 0.2-0.4 percentage points of GDP per year, RBC says.