The day finally came: the first Conservative budget in 18 years.
Overall, the Conservatives for Liberty team is pretty pleased with George Osborne’s budget – but that doesn’t mean there’s no room for improvement. Here we’ve pulled out our highlights as well as a few things that had us shouting at the TV screen.
The good bits
- Married couples can now leave their family homes to their relatives up to a value of £1m, restoring the original principle of inheritance tax being only for the rich.
- The benefits cap will be reduced from £26,000 nationally to £23,000 in London and £20,000 in the rest of the country. This goes even further towards ensuring people out of work do not receive more in benefits than people in full time employment earn.
- Corporation tax will be cut to 18% by 2020. This will give the UK the lowest rate of corporation tax among the world’s major developed economies, increasing our international competitiveness.
- Working-age benefits frozen for four years (excluding maternity pay and disability benefits).
- Maintenance grants for students changed into loans from 2016/2017. These loans will be larger than the current maintenance grants meaning that potential claimants will be better off, and the savings made via converting the grants to loans will be used to fund increased numbers of university spaces.
- Local authority and housing association tenants are to pay full market rent if they earn above £30,000 per year (or £40,000 in London).
- Further rises of the personal allowance for income tax, to £11,000 next year and £12,500 by 2020. Conservatives for Liberty loves pretty much any tax cut, and especially ones that benefit lower paid people. This announcement is accompanied by a rise in the 40p tax threshold, too – as well as changes to employers’ National Insurance for small businesses.
- BBC to absorb the £650m annual cost of providing free TV Licences for the over 75s. Equivalent to a 20% cut in Licence Fee revenue. This one comes in as a ‘nice start’ – a state broadcaster is an anachronism in the modern age, so this is a good first step towards privatisation.
- Budget surplus by 2019/2020, continuing on to 2020/2021.
- A consultation on Sunday trading laws. It really should go without saying, but… we believe in freedom, so we want these laws gone.
The bad (and sometimes really disappointing) bits
- A national living wage starting at £7.20 and rising to £9 by 2019-2020, which the government itself admits will eliminate 60,000 jobs by the end of the parliament. This will hit lower-skilled workers, and really, Conservatives should know better than to try to ‘fix’ the market in this way.
- Commitment to a 2% of GDP floor on defence spending. Tough decisions have to be made in the context of a continuing deficit and a scarily large national debt, and we cannot afford to continue spending this arbitrarily high share of GDP on the armed forces.
- The Office for Budget Responsibility noted that the government would be spending £83bn more over the next 5 years than previously planned in the March budget.
And the ‘meh’
- NHS to receive a further £8bn by 2020. An arguably needed resource, but this doesn’t solve the fundamental problem of the inefficiencies caused by a state run monopoly. Until patients have greater choice & power over their care, ‘our NHS’ has no hope of solving its problems.