We know most of the main numbers of the Budget. These days they are given to us in the late Autumn (December) Statement, with full forecasts from the OBR. The revisions to these this March are not likely to be large.
The Chancellor may be able to anticipate a bit faster growth, and therefore more growth in tax receipts than planned at the end of last year. He will doubtless wish to increase the tax threshold as much as he dare. He might even allow some of the benefit of this to accrue to 40% taxpayers as well as to 20% taxpayers.
Growth will come from most parts of the economy. Current public spending contributed with a real increase of 1.7% in 2012, and a further real increase of 0.7% in 2013, according to the OBR. They anticipate another 0.4% increase in real current public spending in 2014, with a good pick up in government investment as well that year after cuts in previous years. Public borrowing was forecast at £111bn in 2013-14, and at £96bn next year. There may be some improvement in those numbers thanks to faster growth.
There will be various schemes to promote extra growth. We have already been told of the planned new town at Ebbsfleet. This was the subject of my publication “Thames Reach a new city” which made proposals for the brownfields near Ebbsfleet. We are told that Help to Buy money for newly built homes will continue until 2020 if there is a Conservative government elected in 2015. I would expect more tax relief and assistance for companies taking on extra labour, especially of younger people.
The Office of Budget Responsibility may well have to revise its forecasts again to catch up with the reality of faster growth now coming through very visibly. There may also be rises in real wages before the end of the year, after the slump in people’s spending power in 2008-10 and the continuing stresses on real incomes since.
THOSE SPENDING “CUTS” IN FULL
Total Managed expenditure
2015-16 £744bn (OBR figures Autumn 2013)