Chancellor George Osborne is preparing to stand up in Parliament to make his Budget 2014 – but what is he likely to offer taxpayers?
Although pressure groups and the opposition have plenty to say about what they want the Chancellor to do, he has made clear he has no money – but here’s are some of the demands:
- Higher tax-free savings limits
Leeds Building Society chief executive Peter Hill wants George Osborne to help savers by allowing them to put more of their money into increasing ISA allowances – for the current financial year these stand at £5,760 for a Cash ISA, or £11,520 for a Stocks and Shares ISA (or combination of the two). These allowances will increase to £5,940 or £11,880, respectively, for the financial year 2014-15.
- More investment in business
The TUC wants the Chancellor to address the UK’s growing investment gap, which was nearly £50 billion last year.
The Chancellor came into office promising to boost investment and rebalance the economy, says the TUC, but the TUC says investment has actually fallen as a share of GDP since mid-2010, while the gap between planned and actual investment levels continues to rise.
The gap between current investment levels (14.5 per cent of GDP) and those originally forecast by the Office for Budget Responsibility (17.8 per cent) has grown to £12.4 billion a quarter – an annualised gap of almost £50 billion. This investment gap has held back the UK economy, argues the TUC, and unless addressed, could cause permanent damage to the country’s economic prospects.
- Help for middle-earners
Former Tory Chancellor Norman Lamont wants more help for higher rate (40%) taxpayers. He explains that 4.4 million earners pay tax at the middle rate – a million more than in 2010 and that the Chancellor does little to help them.
He also reckons raising national insurance thresholds from a minimum of £5,500 will do more to help low earners than raising the personal allowance to £10,500
The current Chancellor has expressed little sympathy here – but pledged to make raising the 40% tax threshold a manifesto promise for the next election
What the Chancellor has hinted the nation can expect from his speech are more public spending cuts, an extension of the Help to Buy scheme for first time home buyers and a new ‘garden city’ at Ebbsfleet, Kent.
George Osborne is due to make his speech to Parliament on Wednesday, March 19, 2014.