A Spoonful of Sugar Helps the Medicine Go Down
16 March 2016, Blog
With the economy smaller and growing slower than predicted, the Chancellor has today set out the Government’s plans to make spending cuts totalling £3.5bn, in hopes of meeting his target of clearing the deficit and balancing the books by the time of the next general election in 2020.
He has revised the UK’s growth forecast and cited the Office for Budget Responsibility’s view that leaving the European Union will put the UK economy at further risk. Osborne is aiming to keep the UK firmly on track to clear its deficit by 2019/20, with a budget surplus of £10.4bn in 2019/20.
- Growth has been revised down from the previous prediction in the Autumn statement of 2.4% down to 2% for 2016, and revised down to 2.2% in 2017 from the previous prediction of 2.5%.
- The Government has announced plans to cut corporation tax to 17% by April 2020, to be funded by restrictions to the tax deductibility of interest against corporate tax.
- A new sugar levy on the soft drinks industry will be introduced in two years’ time to tackle childhood obesity; raising £520m which will be spent on primary school sport.
- Plans were announced for all schools to become academies by 2020, or to have an academy order in place to convert by 2022.
- New rail lines have been giving the green light, including Crossrail 2 in London and the HS3 link between Manchester and Leeds.