Budget 2009
The chancellor gave his 2009 Budget statement on Wednesday 22 April. The chancellor’s speech, full budget report and accompanying documents are all available on the Treasury’s website.
The chapters of interest within the Budget report are on:
The key points within these chapters are highlighted below, and our response to the Budget statement is available here. Our policy circular gives more information for members and associates.
Chapter 3: Financial stability
Ensuring financial stability: responding to the immediate challenges (pages 50-56)
- The government’s asset-backed securities guarantee scheme will become available from October 2009 for banks and building societies to use alongside the existing Credit Guarantee Scheme (CGS). The scheme extends the funding options open to banks and building societies under the existing CGS to residential mortgage-backed securities.
- The government and FSA will review the current regulatory regime for covered bonds introduced a year ago and report by the 2009 Pre-Budget Report.
Renewing financial markets for the future (pages 57-70)
- Building on the issues set out in this chapter, the government will set out its approach to renewing financial markets for the long term before the summer. Proposed action will cover five areas:
- Renewing financial regulation;
- Reducing the impact of the failure of financial firms;
- Protecting and supporting consumers;
- Improving efficiency and competition in financial markets;
- Strengthening regulators and the international regulatory framework.
- Following the Walker review of corporate governance, a consultation document will be published in the summer 2009 with conclusions in autumn 2009.
- The government will bring forward proposals regarding the governance and accountability of the Financial Services Compensation Scheme and the Financial Ombudsman Service.
- The Retail Financial Services Forum, established in the 2008 Pre-Budget Report to champion retail financial consumers’ interests and help restore confidence in financial services, will be asked to act as a steering group for the development of proposals:
- to support confident and capable consumer;
- high quality financial guidance;
- access for all citizens to simple, transparent, value for money products;
- appropriate levels of consumer protection includings an effective framework of mortgage and credit regulation; and
- swift redress if things go wrong.
Chapter 5: Helping people fairly
Helping homeowners and housing (pages 102-105)
- The eligibility criteria mortgage rescue scheme will be extended so that households in negative equity are not excluded, and a £20 million fund will be made available for local authorities to extend small loans to families at risk of homelessness through repossession or eviction.
- The standard interest rate used to calculate support for mortgage interest will be maintained at 6.08% for a further six months until the end of 2009 when it will be reviewed.
- The stamp duty holiday for homes costing up to £175,000 will be extended for four months until the end of 2009.
- A £600 million fund to stimulate housing development in the short-term and boost capacity in the housing building industry to deliver an additional 10,000 new homes in England through:
- £400 million to unlock currently stalled housing developments, leveraging in private development finance through a combination of reducing up-front costs with equity, gap and intrastructure funding, and supporting viability with an expansion in the provision of HomeBuy Direct (£80 million), and increased funding for affordable housing; and
- £100 million of new funding for local authorities to deliver new social housing at higher energy efficiency standards.
- The government will identify, working with industry and other partners, the best regulatory and policy framework to support the government’s long-term housing objectives.
Helping people manage their finances (97-100)
- BERR will publish its white paper on consumer rights in the summer. It will set out proposals to provide further help to people in difficulty with their finances and proposals to strengthen the UK’s credit regime.
- The roll-out of a national Money Guidance Service will begin in 2010 subject to preliminary findings from the pathfinder demonstrating that the service can be effective. The government intends to introduce legislation to implement Money Guidance and to direct dormant account funds for financial capability to support delivery of this service.
- The annual Individual Savings Account cash limit will increase to £5,100 for everyone aged 50 and over for the tax year 2009-10, and for everyone from 6 Apr
