On the 8th July George Osborne delivered the first Conservative Government Budget for 19 years. The first budget after a general election is traditionally the time for introducing unpopular measures. The Chancellor is not constrained by a coalition partner and has nearly five years until the next election. Mr Osborne’s stated aim is to move the UK from a low wage, high tax, high welfare economy to a higher wage, lower tax and lower welfare economy.
Following the pattern of previous budgets some of the announcements to achieve this were well trailed beforehand, for example the cuts to welfare; however this was tempered with the pain being extended to a period of three years rather than two. There were significant changes affecting higher earners in respect of pensions, changes to income tax and a move to raise the threshold before higher rate tax becomes payable as well as significant changes to the taxation of dividends and a sizeable reduction in corporation tax.
All in all this was a big budget with big changes and the potential for further big reforms particularly in the area of pensions.
You can download our summary of the budget in our Library.