1. Infrastructure spending has been brought forward
The government has brought forward £1.7bn of capital expenditure that was previously planned for 2019-20.
Why? Because it helps cut spending in the 2019-20 financial year, creating a surplus, and allowing the government to meet the fiscal charter.
2. Gin and tonic falls foul of the soft drinks levy
Uh oh. The tonic in Gin & Tonic *will* be affected by the sugar tax if it contains enough sugar per 100ml
— Chris Ship (@chrisshipitv) March 16, 2016
The soft drink tax is not a all-encompassing sugar tax; other sugary things – sweets, chocolate, cereal, processed foods with hidden sugar – are not included. The two levies are on drinks with a sugar content above 5g per 100ml and one for drinks with more than 8g per 100ml. Pure fruit juice, which contains quite a lot of sugar, and milk-based drinks are excluded. So are diet versions, which contain sweeteners rather than sugar.
3. The government is to launch a consultation on whether crematoria are fit for purpose
This might be because of soaring costs – up a third since 2010.
4. Lloyds share sale delayed
The government has admitted that it could take another 12 months to finally sell the taxpayers’ stake in Lloyds Banking Group to the public. On page 93 of the budget statement, the Treasury says:
The government will continue to return its financial assets to the private sector through launching a retail sale in 2016-17 and fully exiting its stake in Lloyds Banking Group and raising up to £25bn from its stake in RBS over the course of this parliament.
The retail sale, to small investors, was meant to take place this spring but Osborne put it on hold in late January after global stock markets suffered heavy losses. Lloyds shares are currently worth 69.1p, below the 73.6p which would allow the government to break even. So Osborne cannot sell them now anyway.
5. Wine drinkers face higher duty
Accountants at Ernst & Young have flagged up that wine lovers are taking a hit, even though other alcohol duties were frozen today.
Charles Brayne, the group’s indirect tax lead, explains how they – like G&T drinkers – face paying more to the Treasury:
The cost of the duty freeze on beer and spirits to the Treasury is estimated to be £425m over five years.
The giveaway could have been more generous had wine been included, as this accounts for 36% of all alcohol duties. For those of us that enjoy a glass of wine the duty paid will increase in line with inflation – by approximately 2% per annum – the cost per bottle will increase to £2.09 in 2016-17.
6. The government is squeezing departmental spending, via public sector pensions
Figures show that the chancellor is expecting to pull in about £2bn in 2019-20, and also in 2020-21, through changes to the “discount rate” used to set some public sector pensions.
That discount rate is used to set unfunded public service pension schemes, and is linked to future inflation and growth forecasts (explanation here).
The government has decreed that employer contributions to the unfunded public service pension schemes should rise, but isn’t going to compensate them for the additional costs.
How does Osborne get to his surplus? A mix of a £5bn boost fr lower govn't borrowing costs + a raid on public service pensions #Budget2016
— Helia Ebrahimi (@heliaebrahimi) March 16, 2016
7. Tax burden is going up
The Office for Budget Responsibility’s report (pdf) shows that the tax burden is going up. It is 36.3% of GDP in 2015-16, which Labour says is higher than at any time during the last Labour government and higher than any time since the mid-1980s. By 2019-20 it is expected to hit 37.5%.
