Earlier today, the Chancellor of the Exchequer announced his 2016 Budget, where he outlined his spending and fiscal plans to Parliament, introducing great measures for workers, drivers, savers, business owners and the self-employed in Amber Valley, and not to mention further support for infrastructure and investment in the East Midlands more broadly.
There were some very welcome measures announced in today’s Budget and I have outlined below, the measures which I believe will make a different to the lives of Amber Valley residents. If you’d like to read the Chancellor’s 2016 Budget you can do so here, I also had the opportunity to speak in the Budget debate in the House of Commons, the full text of which you can read here.
Update: as you may know, the Chancellor’s original Budget contained a proposal which caused concern for a number of my constituents, namely changes to the aids and appliances allowance as part of the Personal Independence Payment. I expressed concern over these proposals and I am glad that the Chancellor removed these measures from his Budget. I am very glad that he listened to concerns raised and that we passed a Budget I am proud of.
Drivers – Fuel Duty Frozen and Important Infrastructure Investment
The Chancellor gave much needed support to motorists whose costs remain high, freezing fuel duty for the sixth consecutive year. This represents a £75 per year saving for the average motorists and £270 a year to a small business with a van.
The Chancellor also announced further funding to support motorists with the Midlands Connect programme, which will see transport infrastructure improved in the Midlands, with funding to push ahead with the M1 smart motorway upgrade, improving the ability for motorists in the region to get to where they need to be.
The Chancellor also took action to tackle the blight of potholes on our roads, something I know causes problems for many local motorists, allocating £11million during 2016/2017, to fill 214,000 potholes.
Support for Workers – £11,500 Personal Tax Allowance
From April 2017, the Personal Tax Allowance will increase to £11,500, representing a tax cut for 31 million people. This is a step in the right direction to make sure those on the lowest incomes can keep more of what they earn. Measures to increase the Personal Tax Allowance under this Government mean that a typical basic rate taxpayer will be paying over £1,000 less income tax then when we came into government five years ago.
To help more tax payers keep more of the money they earn, the higher rate threshold will also increase to £45,000, a tax cut of over £400. I welcome this measure for the middle-income earners in my constituency, taking those who should never have been caught by this rate of tax, out of this bracket. This is especially important for families with one earner who fall in that band who should never have done.
Savers – New ‘Lifetime ISA’
Concerns for young people and support to help them save for their future is something that comes up repeatedly on the doorstep, parents and grandparents are understandably concerned about support for future generations. That’s why I welcome the Chancellor’s announcement of a Lifetime ISA.
This would be open to under 40’s, with Government support to help them to save for their retirement or their first home – giving them flexibility in saving as under these plans people won’t have to choose. The Government will give £1 for every £4 saved, meaning if someone were to save £4,000 a year, the Government would give £1,000 until you reach 50.
This is a great way to encourage our young people to save for their first home or their retirement, giving them opportunities and flexibility to help them to save and provide for their futures.
Business Owners – Business Rate Relief
The Chancellor also announced support for local business owners and a boost for local high streets; announcing a permanent doubling of small business rate relief and an increase in the maximum threshold for relief from £12,000 to £15,000, which will mean 600,000 small businesses will now never pay business rates again – a saving of up to almost £6,000.
The threshold for the higher rate of business rates will rise from £18,000 to £51,000, meaning 250,000 small businesses will get a tax cut on their business rates bill.
To further support job creation for firms across the country, Corporation Tax will fall further to 17 per cent from April 2020 – benefiting over a million firms across the country.
The Self-Employed – Class 2 National Insurance Contribution Cut
Class 2 National Insurance Contributions will also be cut to support the self-employed, representing a £133 tax cut for Britain’s 3million self-employed and the 6,400 self-employed people here in Amber Valley.
Beer Duty Frozen
The Chancellor also announced welcome support for local pubs, an issue I know a number of you have contacted me about, freezing beer duty, cider duty and duty on whisky and other spirits this year.
Support for the Midlands
An important message, which I took from the Chancellor’s Budget is that is it clear that the Midlands can compete and to assist this and the success of our region, I would like to see further progress to achieve a Devolution Deal which will bring power back to the region, where we are best placed to make important decisions about job creation, skills and transport.
I welcome the Chancellor’s support for the region and the news that the East Midlands had the strongest productivity growth between 2010 and 2014 of any region. It’s right that this Budget included measures to support industry and growth in the Midlands, with a focus on supporting the development of Midlands Connect’s long-term transport strategy including funding to provide a continuous smart motorway from London to Yorkshire.
It’s great to see this Budget pushing forward the government’s vision for the Midlands Engine for Growth, announcing an investment of more than £250m for the Midlands Engine Investment Fund to support smaller businesses in the region. This Budget also saw £16million in R&D funding to support aerospace firms in the Midlands, including £7million to support Rolls-Royce, a major local employer.
Tackling Tax Avoidance
I also welcomed the Chancellor’s focus on tackling tax avoidance of multi-national corporations, an issue which I have campaigned on in Parliament. It’s important that the Government introduces measures that will restore public confidence in what is being done to ensure multi-national companies are paying their fair share.
This includes modernising our tax rules to close Labour’s loopholes which allowed many large international companies to reduce their tax burdens to close to zero, an important step to tackle this problem.