2016 United Kingdom budget explained
| United Kingdom budget |
| Year: | 2016 |
| Country: | United Kingdom |
| Previous Budget: | July 2015 United Kingdom budget |
| Previous Year: | July 2015 |
| Next Budget: | March 2017 United Kingdom budget |
| Next Year: | March 2017 |
| Presented: | Wednesday 16 March 2016 |
| Parliament: | 56th |
| Party: | Conservative Party |
| Chancellor: | George Osborne |
| Total Revenue: | £716 billion ($ trillion) |
| Total Expenditures: | £772 billion ($ trillion) |
| Deficit: | £56 billion (2.9% of GDP) |
| Url: | 2016 UK Budget |
The 2016 United Kingdom budget was delivered by George Osborne, the Chancellor of the Exchequer, to the House of Commons on Wednesday, 16 March 2016.
It was the second fully Conservative budget delivered by Osborne, after the July 2015 budget. This was to be Osborne's last budget as Chancellor, as he was replaced by Philip Hammond on 13 July by way of Theresa May's cabinet reshuffle.
Background
In the November 2015 Autumn Statement, the independent Office for Budget Responsibility predicted that the UK economy would grow by 2.4% in 2016.[1]
Budget announcements
- Osborne will introduce a sugar tax on soft drinks from 2018, raising around half a billion pounds which will be used to fund after-school activities such as sport and art.[2]
- The predicted GDP growth for 2016 was lowered to 2% from 2.4%.[2]
- The tax-free allowance will be raised to £11,500 and the 40p tax threshold will increase to £45,000.[2]
- There will be a new savings account, the Lifetime ISA, for the under-40s, with the government putting in £1 for every £4 saved.[2]
- Funding was earmarked for High Speed 3 (an east-west rail line across the North of England), Crossrail 2 (a north-south rail line across London), a road tunnel across the Pennines and upgrades to the M62 motorway.[2]
- £115 million was allocated to tackle rough sleeping.[3]
- Public sector employers will be required to contribute a higher proportion to their workers' pensions from 2019–2020.[4]
- Tobacco duty was increased by 2%.[5]
- Hand rolling tobacco duty was increased by 3%.[5]
- Fuel duty frozen at 57.95p per litre.[6]
- VAT on tampons was to be cut from 5% to 0%, as soon as EU obligations allowed.[7] (The tax on women's sanitary products was abolished on 1 January 2021, when the transitional Brexit period expired.)
- The halving of tolls across both Severn Bridges from 2018.[8]
2016 - 17 taxes and spending
Taxes
See main article: Taxation in the United Kingdom.
| Receipts | 2016-2017 revenues (£ billions). |
|---|
| Income Tax | 182 |
| Value Added Tax (VAT) | 138 |
| National Insurance | 126 |
| Excise duties | 48 |
| Corporate Tax | 43 |
| Council Tax | 30 |
| Business rates | 28 |
| Other | 120 |
| Total Government revenue | 715 | |
|---|
Spending
See main article: Government spending in the United Kingdom.
| Department | 2016-2017 Expenditure (£ billions). |
|---|
| Social protection | 240 |
| Health | 145 |
| Education | 102 |
| Debt interest | 39 |
| Defence | 46 |
| Public order and safety | 34 |
| Personal social services | 30 |
| Housing and Environment | 34 |
| Transport | 29 |
| Industry, agriculture and employment | 24 |
| Other | 49 |
| Total Government spending | 772 | |
|---|
Reactions
The Leader of the Opposition, Jeremy Corbyn, described the budget as having "unfairness at its very core", singling out cuts to disability benefits and corporate tax for particular criticism. However, he expressed his approval for the introduction of the sugar levy in his House of Commons response.[9]
Secretary of State for Work and Pensions, Iain Duncan Smith, resigned two days after the presentation of the budget, describing planned cuts within his department "as a compromise too far".[10]
See also
Notes and References
- News: Penny . Thomas . U.K. 2016 economic growth forecast raised to 2.4%, Osborne says . . 25 November 2015 .
- News: Staff writer. Budget 2016 summary: Key points at-a-glance . . . March 2016 .
- News: Whale . Sebastian . George Osborne to announce £100m to tackle homelessness . . . 16 March 2016 . 24 March 2016 . 8 April 2016 . https://web.archive.org/web/20160408154257/https://www.politicshome.com/news/uk/home-affairs/news/72727/george-osborne-announce-%C2%A3100m-tackle-homelessness . dead .
- News: Pennells . Sarah . Budget 2016 - how are you affected? . SavvyWoman . 16 March 2016 .
- News: Staff writer. Cigarette prices in UK will be subject to 'effective floor' . . . 16 March 2016 . subscription .
- News: Staff writer . Budget 2016: Fuel duty frozen for sixth year in a row . . . 16 March 2016 .
- News: Staff writer . Deal reached to scrap 'tampon tax', officials say . . . 17 March 2016 .
- News: Staff writer . Budget 2016: Severn bridge tolls to be halved . . . 19 March 2016 . 16 March 2016.
- News: Staff writer . Budget 2016: Jeremy Corbyn attacks Osborne's 'failure' . . . 16 March 2016 .
- News: Staff writer . Iain Duncan Smith quits over planned disability benefit changes . . . 19 March 2016 .
