The Chancellors Budget, and its impact on Cornwall
The dust has settled on the Chancellors Budget announcements on Wednesday. As always, there are a lot of headlines and little detail when it is announced. We know Local Government was not directly targeted this time around, which is welcomed.
We also know Cornwall got a few things from the Budget which I blogged about HERE. The Hall for Cornwall also received £2m in the announcements. But what else was in that Budget?
Small businesses have been given a welcoming hand with the Government intending to permanently double the Small Business Rate Relief from 50% to 100% the threshold will also be raised to £15,000. Those businesses with a rateable value of £12,000 (around 600,000 nationally) will pay no business rates from April 2017. There will be a tapered relief on properties with a rateable value between £12,000 and £15,000.
The Government will also increase the threshold for the standard business rates multiplier to a rateable value of £51,000 (currently £18,000). And from 2020 the annual business rates uprating will switch from RPI to the lower CPI.
Whilst very good news for those small businesses, all of these measures will have the impact of reducing local authority funding as we move towards the 100% Business Rate Retention system. The Government has ‘indicated’ that it will compensate for losses as a result of changes announced in the budget, although the detail of that promise is yet to be determined. This does worry me, as with the reduction of our core grant from government, the business rates were set to replace that grant.
Those in the lower wage spectrum, the personal tax allowance will rise to £11,000 from he current £10,600 in April 2016. It will be increased further to £11,500 in April 2017. The higher rate threshold will increase from £42,385 to £43,000 this year and then to £45,000 in April 2017.
The main rate of Corporation tax will be cut to from 20% to 17% in April 2020. Commercial property stamp duty will be reformed from midnight Wednesday in the same way that residential stamp duty was previously changed.
We will pay more for our insurances with a rise – from 1st October 2016 – of 0.5%, from 9.5% to 10%, with the additional proceeds being diverted to flood relief programmes. This tax was already increased last year, from 6% to 9.5%. Flood defence spending will be increased by £700m as a result of this measure.
Those owning a car will not face a hike in fuel prices as the expected rise in fuel duty will be frozen,
Those liking a tipple or two duty on beer, cider and whisky will be frozen. Sadly, wine and other alcohol will see duties rise in line with inflation from 21st March 2016. Smokers will pay more duty on tobacco and has been increased from 6pm Wednesday.
The government is setting out how £50m from the Pothole Action Fund will be allocated across England in 2016-17. It said this allow local authorities to fill nearly a million potholes. £8m is being allocated to the South West. The South West is a big geographical area, so I expect Cornwall’s share will be a few hundred thousand, rather than millions.
A package of £115m will support those who are homeless and to reduce rough sleeping. This will pay for 2,000 places to live for those who need to move from emergency hostels and refuges, along with other homelessness prevention schemes.
The government will launch the Starter Homes Land Fund prospectus today. This prospectus invites Local Authorities to access the £1.2bn of funding to remediate brownfield land to deliver Starter Homes.
The budget also announced £19m funding for community-led housing schemes in areas most impacted by holiday homes, using Stamp Duty Land Tax revenue raised from the higher rates for purchases of additional properties.
From April 2017, 4,000 Armed Forces veterans will be able to keep payments from their war pensions rather than using them to pay for social care.
And there you have it, a simple (I hope) interpretation of the Budget. Thanks to the finance people for looking into the detail to make sure there were no hidden surprises!
I have left out a few items, like the Sugar Tax for another blog.