Global markets might be turbulent, but the UK is better placed to deal with nasty surprises than almost anyone. This was the argument made by George Osborne as he delivered his 2016 Budget. The Chancellor admitted that growth forecasts for the UK economy have been downgraded, and that he has missed his debt target for this year: debt has not fallen as a proportion of GDP. However, these shortcomings were framed in an international context. Osborne announced that, provided it stays in the European Union, the UK will grow faster than any comparable economy in the coming years.
The Chancellor also announced that every state school is to become a self-governing academy by the end of this parliament, and that corporation tax is to fall from 20 per cent to 17 per cent by 2020. Several incentives to save were also announced, including a lifetime ISA for those under 40, to which the government will contribute £1 for every £4 put in.
Perhaps the most news-worthy announcement, though, was for a sugar tax on soft drinks. David Buck, Senior Fellow at the King’s Fund, contributes on this as part of our expert panel below. Other contributors include Emma Maier, Editor of Inside Housing, and Andrew Haldenby, Director of the Reform think tank.
It may not help the homeless
Emma Maier, Editor, Inside Housing
This Government’s clear priority when it comes to housing is creating a nation of homeowners. The Chancellor’s focus on “demand-side solutions” continued this Budget: the Lifetime ISA was a useful leg-up for under 40s already able to save, and there was reference to exploring “ways to extend homeownership” to social tenants who can’t afford to buy—despite the existence of the “Right to Buy” and “Help to Buy” schemes.
But with rough sleeping rising, the chancellor was under pressure. The much-trailed council duty to prevent homelessness did not materialise in the budget: instead there was a £115m fund announced for that purpose. Investment is welcome, but whether it makes up for recent cuts is debatable. The end of social housebuilding and the Budget’s attack on the fledgling build-to-rent sector will be a further barrier to housing homeless people. The Budget didn’t provide a sustainable solution for future generations. It may, however, be enough to take rough sleeping out of the public gaze.
A mixed day for businesses
Daniel Mahoney, Head of Economic Research at the Centre for Policy…