Madeleine Moon MP

Labour Member of Parliament for Bridgend

The 2014 Budget Update

In his last major Budget before the next General Election in May 2015, Chancellor of the Exchequer George Osborne outlined a series of tax and spending changes. 

The following is an analysis of the Chancellor's speech, outling what is changing, what is staying the same and how this may affect you.

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The 2014

Budget Update

                                                
                                                 ...And how will it affect you?

Headline changes
 
  • Personal tax allowance rises to £10,500
  • Fuel duty frozen, bingo duty halved and 1p off a pint
  • Brand new ISA with £15,000 limit introduced
  • A "pensions revolution" as requirement for annuity scrapped
  • New local authority money could see M4 repair work 
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In his last major Budget before the next General Election in May 2015, Chancellor of the Exchequer George Osborne outlined a series of tax and spending changes. 

The following is an analysis of the Chancellor's speech, outling what is changing, what is staying the same and how this may affect you.
  1. There will be money made available from tomorrow that local authorities in Wales can use on infrastructure improvements. The Chancellor specifically said that the Welsh Assembly Government could now use this money to fund improvements to the M4.
     
  2. The Government's Annual Investment Allowance, a payment made to new businesses to encourage them to take on more apprentices, will be expanded greatly. This will affect Wales as nearly 20% of the businesses using the Allowance are based in Wales. 
The Chief Executive of the Action Poverty Group, Alison Graham, said "Today's Budget locks in austerity for millions of low-paid families, poor children, carers and disabled people."
  1. The alcohol duty escalator has been scrapped. Duty on most alcohol will now rise with inflation, with several exceptions; Scottish whisky and cider will have their duty frozen, and beer duty will be cut by 1p in a repeat of the Chancellor's move in last year's Budget.
     
  2. Duty on bingo has been halved from 20% to 10%, duty on Fixed-Odds Betting Terminals has been increased to 25%, and the fuel duty freeze that was brought in during last year's Budget has been extended for another year to September 2015.
The BBC Political Editor Nick Robinson said "Politically this Budget has one thing in mind - older voters with savings."
  1. A new childcare subsidy has been launched; families where both parents are working will now receive a £2,000 subsidy per child to cover the £10,000 that childcare now costs the average family. In other words, working families will have 20% of their childcare costs alleviated by the Government. 
     
  2. All tax restrictions on pensioners' access to their pension pots are to be abolished in the coming year. The Government have now also ended the requirement to buy an annuity. This has been described by the Chancellor as a "pensions revolution", and the single biggest change to pensions since the early 1920s.
The Director General of the British Chamber of Commerce, John Longworth, said "Business wanted a Budget that was disciplined, focused and geared towards the creation of wealth and jobs and that's what the Chancellor has delivered."
  1. The Budget dramatically changes the way that ISAs operate. From now on, instead of there being seperate ISAs for cash and for shares, both will be combined into a single ISA that will have a tripled limit of £15,000. This has been seen as a good move for savers, but has drawn concern that not enough has been done for those without savings.
     
  2. Despite Labour pointing out that people are an average of £1,600 a year worse off under the Conservatives, the Government maintain it has given people more money by raising the tax thresholds. The new lowest tax threshold is set to become £10,500 in April next year, having been set at £10,000 by the Government last year.
The General Secretary of the Trades Union Congress, Frances O'Grady, said "This was a pre-election Budget. It will be paid for by further years of austerity, public services brought to near collapse, public sector pay cuts and a welfare cap that bites into the safety net that any of us might need."
The Secretary of State for Wales, David Jones, said that "More than 600,000 pensioners in Wales will be able to top up their pension by up to £25 per week...200,000 Welsh children will benefit from the changes to tax-free childcare...the Government is firmly committed to ensuring that people of working age in Wales have the opportunity to engage in the labour market in order to advance their career prospects."

Labour's Welsh Finance Minister, Jane Hutt, said: "This is another Budget full of missed opportunities for Wales and does nothing to boost economic growth. As the Office of Budget Responsibility say, the measures announced by the Chancellor today will "have a negligible effect on annual GDP growth."

"However, the publication of the Welsh Bill tomorrow is an important step forward...the increased support for childcare would be positive for working families, but I would urge the UK Government to bring their plans forward now."
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