What did the Budget do for the next generation?
The chancellor called this a Budget for the next generation. However, a look through the detail suggests to the exact opposite being true.
Skills
The Government has set a goal of three million apprenticeship starts by 2020. This will be funded by a levy paid by all firms with an annual wage bill above £3 million. It will, however, affect all companies that want to recruit apprentices. Nevertheless, there was no mention in the Budget about a system that is meant to raise £3 billion and come into force in 2017.
Simon Carr, chair of the National Federation of Builders, said: “It is highly debatable whether an apprenticeship strategy driven purely by an arbitrary number, that is the three million apprenticeship starts, can also guarantee quality. We do need assurances over how SMEs will fund apprenticeship training and that other training and development will not suffer as a result of this payroll tax.”
Climate change
The Climate Change Act 1988 places targets on how much the UK should be reducing its carbon emissions by 2050. Investing in energy efficient buildings, especially when we have some of the worst insulated homes in Europe, is a cost effective way of doing that. Another sensible solution is relying on a range of renewable energy sources. In the Budget, the chancellor zero rated the petroleum revenue tax, reducing the supplementary charge from 20% to 10%. Paul Bogle, head of policy and research at the National Federation of Builders, said: “Continuing to rely on and invest in fuel that causes climate change has not only left the world’s largest economies open to fluctuations, it leaves a poisoned legacy for the next generation.”
Savings and pensions
The introduction of the Lifetime ISA is supposed to solve the dilemma of whether to save for a pension or a home if you are under 40. Unfortunately, if you do not have the money to save, the incentive being offered becomes irrelevant. This will help those who have the means to save but will not help anyone else, despite the increase in the personal tax allowance and the first £1,000 of any savings becoming interest-free.
