The Office for Budget Responsibility’s predictions before last year’s Autumn Statement led Chancellor George Osborne to make the bold claim of a £27bn windfall to play with. It gave people who’ve been hoping for a while now that the Government might start pumping money into the economy rather than continuing austerity the prospect of a damn tasty budget this year. However, the rest of the world doesn’t want to play ball and now with economic growth predicted to slow, that windfall is looking like pulp fiction.
Here are some of the things that caught our interest:
As we’ve seen in the past, hand-in-hand with spending cuts come further promises of devolution. Osborne signalled his intent to one day see all local authorities raising and spending all their income locally. This will begin in London with a pledge to give the Greater London Authority full control over collecting business rates coming three years earlier than expected.
Osborne’s favourite city Manchester will also get more powers with control over criminal justice. Devolution is going nationwide too, with areas across England gaining their own elected mayors and the announcement of plans for a new combined authority for all of East Anglia.
Big infrastructure announcements continue to be one of the hallmarks of Osborne’s budgets. His commitment to the Northern Powerhouse project shows no signs of wavering with an initial £60m being pledged to HS3, first discussed in last year’s budget. The project will see the construction of a new high-speed rail line connecting Manchester with Leeds, cutting journey times by 30 minutes.
Trans-Pennine interconnectivity isn’t just limited to trains though, Osborne has also pledged £75m for a new road tunnel between Manchester and South Yorkshire. Anyone who’s ever got stuck in snow on Woodhead Pass during a cold January night will know what a boost that could be, however building the longest road tunnel in Europe is obviously not without challenges, such as inflicting ‘psychological difficulties’ on its users.
In the south, £80m has been put aside for Crossrail 2. The fund will just about cover the initial costs of the £28n project. Crossrail 1 took nearly 30 years to get off the ground so don’t get too excited for the sequel just yet.
Whilst Osborne re-affirmed his commitment to tackling the housing crisis there were no announcements of major housebuilding schemes or new garden cities as there have been in previous budgets. Instead Osborne seems to be banking on making homes more affordable through financial reforms. His announcement to cut capital gains tax from 28% to 20% is aimed at encouraging those looking to sell their homes, so as to slow the increase in house prices, especially in the capital.
There was a further commitment to overhaul the planning system with a move towards ‘zonal’ planning. This will see local authorities using their Local Plans (all of which will need to be delivered by 2017) to ensure developers are aware of local development needs and ‘developments in principle’. Osborne sees this as necessary to speed up applications and ensure the Government meets its target of 400,000 affordable housing starts by 2020.
Understandably, given the ‘stormclouds gathering’ rhetoric, it’s been a fairly safe budget that sees the Government continuing firmly on the path it set out after last year’s election. In fact, the most exciting announcement for property professionals, currently “networking” at MIPIM, is probably the freeze in alcohol duty.