Chancellor Jeremy Hunt will announce his Spring Budget tomorrow (Wednesday 15), at the same time as the government’s independent assessor, the Office of Budget Responsibility, releases its latest forecasts for growth and borrowing.
The Chancellor has already seen these – so expect him to be cautious. He has also said that any money available for tax cuts would prioritise businesses over individuals.
Hunt has repeatedly said he favours steady long-term policies based around enterprise, education, employment and, er, everywhere.
This last E means the benefits are not simply confined to London and the South East.
Let’s have a look at these key areas.
We need more dynamic and productive companies. The World Bank ranks the UK as the best place to do business amongst large European nations and second only to America in the G7. So, we expect to see:
- An increase to the Seed Enterprise Investment Scheme (SEIS) with companies being able to raise up to £250,000 of SEIS investment, a two-third increase. The annual investor limit could also be doubled to £200,000.
- Support for future business investment with the Annual Investment Limit, which was due to reduce to £200,000 from April 2023, to remain at a permanent level of £1mn.
- Improvements to the tax-advantaged Company Share Option Plans, increasing the value of options from £30k to £60k. Shares may no longer need to be of a class that give employees control of the company or are majority owned by investors.
- Some kind of signal to global business that the UK remains ‘open for business’. For example, making it easier for a company to become incorporated in the UK, albeit a bit late for building company CRH and microchip designer ARM.
- Corporation tax rises to 25 per cent next month – expect some tinkering to capital allowances (generous tax relief on equipment purchases) and/or laying out a roadmap for future corporation tax reductions – growth permitting.
- New commercial property developments required to have charging installations for electric cars.
There are around 9mn adults with low basic literacy or numeracy skills and over 100,000 people leaving school every year unable to reach the required standard in English and Maths.
We need to have more high-skilled people and find ways to encourage those who have not been to or do not wish to go to university. Better late than never.
Therefore, we might see possible retraining funding (perhaps ‘lifetime learning loans’ similar to student loans) for vocational qualifications for those out of full-time learning for over 10 years.
The total in employment is nearly 300,000 people lower than pre-pandemic with around one fifth of working-age adults economically inactive. The chancellor should make it worthwhile for retired people to re-enter the labour force.