Chancellor also raises VAT threshold for small businesses and cuts Capital Gains Tax on domestic property sales
Chancellor Jeremy Hunt has used what is expected to be his final budget before the next general election to cut a range of personal and property taxes 鈥� as well as increasing the threshold for VAT.
In a speech to parliament lasting more than an hour he also confirmed that the government had acquired the Wylfa nuclear power station site in Anglesey from Hitachi in a 拢160m deal. The Japanese industrial giant suspended its plans to construct a new power station at Wylfa in 2019. The deal also includes the purchase of Hitachi joint venture Horizon Nuclear Power鈥檚 Oldbury site in Gloucestershire.
Budget said the site acquisitions came against the backdrop of the government鈥檚 commitment to exploring the development of a further new large-scale nuclear reactor project.
Hunt told MPs that Great British Nuclear would also begin the next phase of the Small Modular Reactor selection process, with six invited companies being given until June to submit initial tender responses.
Elsewhere, the package included more than 拢240m to build nearly 8,000 homes in east London 鈥� at Barking Riverside and Canary Wharf, alongside a new life sciences hub.
Hunt also announced a 拢20m investment in social finance to build up to 3,000 community-led homes and 拢4m for the Euston Housing Delivery Group to support plans to deliver up to 10,000 new homes around the HS2 terminus.
Earlier this week Downing Street trailed plans to cut National Insurance, and Hunt delivered a reduction in rates from 10% to 8% for employees, and a reduction in the main rate for the self-employed from 8% to 6%.
Other tax measures set out this afternoon include increasing the VAT threshold for businesses from 拢85,000 to 拢90,000 鈥� which Hunt said would 鈥渂ring tens of thousands of businesses out of paying VAT altogether and encourage many more to invest and grow鈥�.
Hunt also announced a cut in the higher rate of Capital Gains Tax for property disposals, reducing it from 28% to 24%. The lower rate will remain unchanged at 18%. The chancellor said that both the Treasury and the Office for Budget Responsibility had concluded that the move would result in more transactions and boost revenue.
Key budget measures at-a-glance
- 拢240m to build nearly 8,000 homes in east London 鈥� at Barking Riverside and Canary Wharf, alongside a new life sciences hub.
- 拢20m investment in social finance to build up to 3,000 community-led homes and 拢4m for the Euston Housing Delivery Group to support plans to deliver up to 10,000 new homes around the HS2 terminus.
- Further funding of up to 拢120m for the Green Industries Growth Accelerator to support the expansion of low-carbon manufacturing supply chains across the UK
- A cut in the higher rate of Capital Gains Tax for property disposals, reducing it from 28% to 24%.
- Increasing the VAT threshold for businesses from 拢85,000 to 拢90,000
- Approval for the next section of East West Rail, accelerating work to allow services from Oxford to Bedford to run by the end of the decade
- 拢400m in new investment to extend the Long-Term Plan for Towns to 20 more places, including Darlington, Rhyl, Carlton, Peterhead, Coleraine and Eastbourne
- Confirmation that a new development corporation in Cambridge will receive funding from the next spending review, plus 拢10.2 million to support the Cambridge Biomedical Campus
- Great British Nuclear will begin the next phase of the Small Modular Reactor selection process, with six invited companies being given until June to submit initial tender responses.
- A second round of the Local Nutrient Mitigation Fund, designed to help restart schemes totalling 30,000 homes stalled by the nutrient neutrality crisis
- 拢3m to match industry funding for a programme to attract more planners to take up roles in local authorities
- A commitment to fund the extension of the National Film and Television School in Buckinghamshire, to offer up to 200 new apprenticeship places a year 鈥� subject to a business case that demonstrates value for money
Peter Hogg, UK cities director at Arcadis, said Hunt鈥檚 speech contained 鈥渓ittle for the built-environment sector鈥� but acknowledged there were positive elements.
鈥淭he North Eastern Trailblazer devo deal is welcome, as is more money for levelling up in culture projects and an extension to the towns fund,鈥� he said.
鈥淎 拢242m commitment to Docklands 2.0 is also a symbolic recognition that London is in the levelling up mix too. Measures to encourage life sciences investment is welcome.
鈥淟ooking into the detail of the 鈥楻ed Book鈥� things are more promising; the government鈥檚 plan for growth brings forward a number of measures that business will welcome, including extensions to full expensing, commitment to further planning reforms, more support to the strategic manufacturing sectors and boosting growth through investment zones.
鈥淐ommitments to a support a private sector-led HS2 station solution at Euston is very welcome, as is the commitment to the next stage of East West Rail. It was a shame for our cities鈥� central activity zones, however, to see tax-free shopping once again absent.鈥�
Mike Burton, land director at Metis Homes, said the budget was 鈥渞ather disappointing鈥� and 鈥渄id very little for the housing industry as a whole鈥�.
He said: 鈥淭he lack of any incentive for those trying to get onto the housing ladder is a great loss. That is the area we see as most challenging in the housebuilding industry, and most likely to hamper growth.鈥�
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Bob Anstey, nuclear sector director at Costain, said the civil nuclear industry would be 鈥渆ncouraged鈥� by the signals being sent by the chancellor.
鈥淭o meet the UK鈥檚 domestic energy requirements over the coming decades, accelerating our ability to generate safe, low carbon and sustainable electricity is essential,鈥� he said.
鈥淎t the same time, there are pressing infrastructure and skills shortfalls that need to be addressed to ensure these initiatives land on fertile ground.鈥�
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