Summer Budget 2015 — 14 Jul 2015 at 18:50

The majority of MPs voted in favour of the summer 2015 budget which, among other measures, increased the minimum wage, replaced student maintenance grants with loans and cut tax credits.

MPs were debating the summer budget 2015^[1]

The budget:

• introduced a new national living wage to reach 60% of median earnings by 2020 (forecast to be over £9/hour by 2020).
• reduced the main corporation tax rate to 19% in 2017 and 18% in 2020,
• set the Annual Investment Allowance to £200,000 from January 2016 (it was previously £500,000 but was due to dropped to £25,000)
• replaced student maintenance grants with loans
• replaced the Dividend Tax Credit with a Dividend Tax Allowance of £5,000
• raised the effective inheritance tax threshold to £1 million
• introduced a taper to the annual allowance for pensions tax relief for those with total income over £150,000
• raised the age at which cars need their first MoT from three to four years.
• restricted relief for mortgage interest for individual landlords to the basic rate of income tax
• ended the permanent non-domicile status
• increased the personal allowance to £11,000 in 2016-17 and the higher rate threshold to £43,000
• doubled the free childcare entitlement from 15 hours to 30 hours a week for working parents of 3 and 4 year olds
• froze working-age benefits and Local Housing Allowances for 4 years, reduced rents in social housing by 1% a year for 4 years, and reduced the benefit cap
• reduced the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned from £6,420 to £3,850.
• limited support provided to families through tax credits to 2 children (Child Benefit will continue to be paid at the same level for all children)
• removed the exemption from climate change levy for electricity from renewable sources
• ruled out increases in the main rates of income tax, VAT or National Insurance over the course of the Parliament

On the Welfare Cap the budget documents^[1] state:

• The welfare cap is set at the level of the OBR’s forecast for spending in scope of the cap. The cap therefore reflects the welfare savings announced at this Budget, and improvements in the forecast since the cap was last set at Budget 2014. By setting the cap at the level of the new forecast, the government is committing to deliver the welfare savings set out at this Budget.

The budget proposes spending of £742 billion and an income of £673 billion in 2015-16; a deficit of £69 billion.

The motion being debated by MPs was technically on legislating to enact some of the proposals in the budget. The motion stated:

• That
• (1) It is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
• (2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide–
• (a) for zero-rating or exempting a supply, acquisition or importation;
• (b) for refunding an amount of tax;
• (c) for any relief, other than a relief that–
• (i) so far as it is applicable to goods, applies to goods of every description, and
• (ii) so far as it is applicable to services, applies to services of every description.

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• [1] Summer budget 2015 documents

Debate in Parliament | Source |