Shortly after stepping up to the despatch Box in the Commons earlier this afternoon, Chancellor of the Exchequer George Osborne announced that the UK’s was the fastest-growing economy in Europe.
Now it’s still unclear how many people in Britain are benefitting from this growth, but according to his Treasury team’s estimates, GDP is forecast to grow by 2.7% this year and 2.3% next year, then by 2.6% in 2016 and 2017 and by 2.5% in 2018. On the face of it, that looks like good news for wholesalers, especially as the Chancellor said that this was a Budget for “makers, doers and savers” (although wholesalers and their retail and catering customers will be hoping that consumers don’t save all their money).
Tomorrow we’ll be looking at the reaction from around the trade in more detail, but for this afternoon, here are the measures likely to impact wholesalers’ businesses are:
• Fuel duty rise planned for September will not now happen
• Beer duty cut by 1p a pint
• Duty on spirits and “ordinary” cider frozen
• Tobacco duty to rise by 2% above inflation and this escalator to be extended beyond the next general election – this puts about 28p on a packet of 20, or 26p on a 25g pouch of RYO. These rises will begin from 6pm tonight.
• £7bn package to cut energy bills, including £18 per ton cap on carbon price support, predicted to save medium-sized manufacturers £50,000 and families £15 a year
• Tax on homes owned through a company to be extended from residential properties worth more than £2m to those worth more than £500,000
• All long-haul flights to carry lower rate of air duty currently charged on flights to US
• Threshold for 40p income tax to rise from £41,450 to £41,865 next month and by a further 1% to £42,285 next year
• New, dual-metal 12-side £1 coin to be phased in from 2017
• Point at which people start paying income tax will be raised to £10,500
• Direct lending from government to UK businesses to promote exports doubled to £3bn and interest rates on that lending cut by a third
• Business rate discounts and enhanced capital allowances in enterprise zones extended for three years
• £270m guarantee for Mersey Gateway bridge
• Legislation to give Welsh government tax and borrowing powers to fund infrastructure needs, including improvements to M4
• £140m extra for flood defence repairs and maintenance
• £200m made available to fix roads’ potholes