Inflation has fallen from 11.1% to 4.0%, the economy has performed better than forecast, wages are rising, mortgage rates are starting to come down, the economy has outperformed European neighbours and debt is on track to fall as a share of GDP.
The OBR says inflation will fall faster than previously expected and reach the 2% target by next quarter - one year sooner than expected by the OBR in November.
This positive news means that this Government can embark on cutting taxes for working people - to ensure we incentivize work and boost growth.
Budget Highlights Include:
New tax cuts
- National Insurance contributions cut by another 2%, a total of 4% since the Autumn Statement worth over £900 a year for an average worker
- Threshold for the High-Income Benefit Charge increased from £50,000 to £60,000 as well as halving the rate so that it is not paid in full until you earn over £80,000 - worth up to £1,260 to the average family
- National Insurance Contributions for the self-employed (Class 4) cut to 6%, a tax cut of £650 since the Autumn Statement for an average self-employed person
- Cutting Capital Gains Tax on property sales from 28% to 24%, supporting those who want to sell their property, making more houses available for families
This means that a couple with 2 school aged children, both working full-time one on £60,000 and one earning the average salary (£35,400) will be better off by £4,600.
Supporting Business
- Increasing the threshold for VAT from £85,000 to £90,000 for small businesses
- The Business rates multiplier frozen for the fourth year in a row, saving an independent shop with a rateable value of £50,000, £1,650 next year
- Extending the Retail, Hospital and Leisure (RHL) relief meaning 230,000 properties will benefit from almost £2.4bn in support
This means the bill for an independent pub with a rateable value of £31,600 will be £11,800 lower. Combined with the small business multiplier being frozen, they would benefit from £12,800 of support.
Helping with the cost of living
- Fuel duty frozen, a tax cut for drivers around £3.1bn
- Alcohol duty frozen, which will mean duty is two pence lower on a pint of beer and ten pence lower on the average bottle of wine
- Boosting pensions, in line with the Triple Lock, by 8.5%, ensuring dignity in older age for those who have worked their entire lives
- Increasing working age benefits by 6.7%, supporting 5.5m households who receive Universal Credit - an average of £470.
The Government is delivering on its economic pledges to halve inflation, grow the economy and reduce debt. Now, we are cutting taxes too.
The Labour Party can't name a single tax they would cut but their 'New Deal for Working People' would add over 70 new regulations or requirements for businesses to adhere to - at a cost to them and their staff.
