Emergency Budget 2010

The new coalition government emergency Budget statement was made on 22 June 2010. The chancellor's statement, full Budget report and accompanying documents are available on the Treasury's website.

Key extracts are highlighted below in order which they appear in the Budget report. We issued a response to the Budget statement, and a policy circular for members and associates.

  • Spending review (pg 17) - the 2010 spending review will be published on 20 October.
  • Bank levy (pg 26) - will introduce a levy based on banks' balance sheets from 1 January, intended to encourage banks to move to less risky funding profiles. The government plans to consult on this over the summer. More information is included in the following statement.
  • Deregulation (pg 26) - the government has announced that it will reduce regulatory costs by introducing a one-in-one-out system for new regulations. The Department for Business, Innovation and Skills will publish more detail in July 2010. Government's plans include:
    • reviewing all regulation scheduled for introducion over the coming year. These regulation will not be implemented until they have been reviewed and re-agreed by the Reducing Regulation Committee.
    • imposing sunset clauses on regulations. Regulations will cease to be law after seven years unless Parliament has confirmed they are still necessary and proportionate, or they were explicitly set to have a longer timeframe.
    • working with European partners to ensure that new proposals for EU regulation are regorously costed at an early stage, and that existing legislation is reviewed with the aim of reducing the burden on European business.
  • Green investment bank (pg 29) - the government will put forward detailed proposals on the creation of a green investment bank following the spending review.
  • Green deal for households (pg 29) - the green deal for households will be established through the Energy Security and Green Economy Bill, to help individuals invest in home energy efficiency improvements that can pay for themselves from the savings in energy bills. The government will also continue to work on green financial products to provide individuals with opportunities to invest in the infrastructure necessary to support the green economy.
  • Capital gains tax (pg 32) - will rise from 18 to 28% for those with total income and taxable gains above the higher rate threshold.
  • Housing benefit (pg 33) - the government will introduce a package of reforms to housing benefit from April 2011 onwards. This includes:
    • changing the percentile of market rents used to calculate local housing allowance rates, and uprating these rates by CPI from 2013-14.
    • capping the maximum local housing alloance payable from each property size.
    • time-limiting the receipt of full housing benefit for claimants who can be expected to look for work.
    • restricting housing benefit for working age claimants in the social rented sector who are occupying a larger property than their household size warrants.
  • Stamp duty (pg 35) - as announced in the Coalition Agreement, the government will review stamp duty relief for first-time buyers taking into account its impact on affordability and value for money.
  • Support for mortgage interest (pg 35) - since late 2008 the rate at which support for mortgage interest is paid has been frozen at 6.08%. From October 2010 it will be paid at the level of the Bank of England's published average mortgage rate.

 

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