Tomorrow, George Osborne will deliver his second budget speech of this year which will reveal new government spending plans for the next twelve months and beyond. This budget is significant because it is the first since Ken Clarke’s in 1997 to have been devised by an all-Conservative Treasury. It is expected to bring many of the policies set out in the Conservative’s election manifesto, which was launched here in Swindon, to fruition.
Whilst the UK economy continues to grow, unemployment continues to fall, and inflation remains low, the Conservative government has ambitious aims to reduce debt even further. Tomorrow’s budget will set out how the Chancellor intends to meet those aims by outlining how departmental savings will be financed.
A further crackdown on tax avoidance will almost certainly play a key role in the budget speech, in line with the government’s pledge to raise approximately £5 billion by continuing to tackle tax evasion and aggressive tax avoidance and tax planning. We can also expect further measures to tackle those who persistently enter into tax avoidance schemes.
Plans to devolve more fiscal powers to England, Scotland, Wales, and Northern Ireland are likely to feature tomorrow, which will include fully devolving income tax rates and bands to Scotland, with the first 10 percentage points of Scottish VAT revenues staying in the country. The Barnett formula will also apply to less revenues; the government will continue with the devolution settlement for Wales and implement the Stormont House agreement for Northern Ireland.
It’s also likely that we’ll see a focus on improving the growth trajectory of areas outside the South East of England, particularly through the Northern Powerhouse programme.
We’ll definitely see some changes to the benefit system announced tomorrow to make our welfare system fairer for working people. This will include a revamp of the tax credits system as well as plans for people earning over £30,000 (£40,000 in London) who live in social housing to pay market rent rather than a subsidised rent.
Keep your eyes peeled for announcements regarding changes to pension and personal income taxation, as well as inheritance tax. As promised in the government’s manifesto, inheritance tax will be scrapped for all properties up to the value of £1m, for example.
The Chancellor may also reveal more details about his plans to introduce laws that will see future governments running a surplus during times of economic prosperity.
I’m looking forward to the next five years and implementing the Conservative’s manifesto to achieve the very best for the country and continue to improve the services that we all value.
Turning to the European stage, we witnessed a vote against the terms of the creditors’ financial assistance package in a referendum in Greece last weekend. This recent development, combined with the fact that Greece failed to make its scheduled payments to the International Monetary Fund, and the expiry of Greece’s financial assistance programme, has served only to add to the developing crisis in the country.
This is a critical moment in the economic crisis in Greece, and this Government will continue to do whatever is necessary to protect our economic security at this uncertain time.
The Greek crisis has been with us for five years and it is one of the biggest external economic risks to the British economy. This Government has consistently argued that the best way to protect Britain from those risks is ensure that we have a strong and sustainable economy.
Britain is in a stronger position to deal with the crisis as a result of the difficult decisions this Government has taken over the past five years. The problems in Greece are a reminder that we must stick to our economic plan to keep our economy secure.
(This article was originally posted in the Swindon Advertiser on Wednesday 8th July 2015)