Budget 2016: At a glance

Budget speech in 5 quotes:

“We will not burden our children and grandchildren. This is a Budget for the next generation.”

“From April next year, 600,000 small businesses will pay no business rates at all.”

“I am today providing extra funding so that by 2020 every primary and secondary school in England will be, or be in the process of becoming, an academy.”

“I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing.”

“My pension reforms have always been about giving people more freedom and more choice. So faced with the truth that young people aren’t saving enough, I am today providing a different answer to the same problem.”

The economy:

  • The growth forecast from the Office for Budget Responsibility for 2016 has been cut to 2%, down from the 2.4% announced last November’s Autumn Statement. Growth forecasts have also be nudged down for the next five years.
  • GDP is forecast to grow by 2.2% in 2017 and 2.1% in 2018. Again this is a reduction to November’s forecasts which were 2.4% and 2.5% respectively.
  • Inflation is forecast to be 0.7% in 2016.
  • Although the Chancellor said the UK was growing faster than any other Western economy he also said Britain’s economy was “materially weaker” and not “immune to slowdown”.


Pensions and saving:

  • Younger generations are being encouraged to save with a new lifetime Isa that will be introduced in April 2017. Savers aged between 18 and 40 will be able to save up to £4,000 a year and get a 25% bonus each year from the government worth up to £1,000.  The resulting tax-free pot can be used to purchase a first property or be set aside for retirement.
  • The overall Isa limit will also be increased from £15,240 a year to £20,000 in April 2017.
  • Low earners are also being encouraged to save with the Help to Save scheme. It will offer a 50% bonus to those that can save £50 a month for four years. It will only be available to recipients of the universal credit or working tax credits.
  • The government’s Money Advice Service is to be scrapped.



  • The point at which people start paying higher rate tax will rise from £42,500 to people out of the 40% tax band.
  • The personal allowance – the amount you can earn without paying tax – will increase to £11,500 from April 2017. The increase will lift 1.3million of the lowest paid workers out of tax.
  • Capital gains tax will be reduced from 28-20% for higher rate tax-payers and from 18%-10% for those that pay basic rate.
  • Insurance premium tax will increase by 0.5%, with proceeds being used to fund improved flood defences.

Transport and driving:

  • Fuel duty will be frozen, for the sixth consecutive year.
  • The HS3 rail link between Manchester and Leeds got the go-ahead as did Crossrail 2 which will link south west and north east London as well as serving stations in Hertfordshire and Surrey.
  • £230m has been budgeted for improvements to roads in the North, including the M62.
  • From 2018 the tolls for crossing the Severn River – linking England and Wales – will be halved.


Drinking and Smoking:



  • A new sugar tax will be introduced in 2018 to help curb childhood obesity and other sugar-related health problems. The £520m it raises each year will be used to double funding for sports in primary schools.

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