Beer drinkers
George Osborne announced a penny off a pint for the third year running as he cut duty on beer and cider.
Brewers and pub companies welcomed the move and said the chancellor’s tax reductions had helped to support the UK’s ailing pub trade.
Osborne said that, from 23 March, duty rates on general beer and lower strength cider would be cut by 2%. A typical pint of beer will be a penny cheaper than now and 9p less than under the previous government’s plans.
Tim Martin, chairman of pub chain JD Wetherspoon, has campaigned for a better deal for pubs competing with cheap alcohol sold by retailers. He said: “The pub trade needs tax equality with supermarkets. We haven’t got that but what we have got [from Osborne] is welcome.”
According to the Campaign for Real Ale, 31 pubs closed each week in the first six months of last year. Beer sales have fallen sharply since 2000 but sales of beer in pubs rose in 2014 for the first time in a decade.
Britain is in the middle of a craft beer boom. Last year 14 breweries opened each month, taking the number to almost 1,300 – the most since the 1940s, according to the Campaign for Real Ale.
Matthew Howgate, head brewer at Marbles brewery in Manchester, said: “Duty going down allowed us to keep our prices steady when a lot of the ingredients we were purchasing, particularly hops, were going up in price. That helps the customer and it helps us because it means people can afford to drink more.”
The beer duty cut will create 3,800 jobs this year alone and attract new capital investment, the British Beer and Pub Association (BBPA) predicted.
Brigid Simmonds, chief executive of the BBPA, said: “Cutting beer duty supports a great British industry which contributes £22bn to GDP and supports almost 900,000 jobs.”
Tidal energy
The company behind the world’s first tidal energy scheme at Swansea Bay in south Wales hopes to create 70,000 jobs in the construction phase alone if it can roll the programme out to five other larger schemes at a total cost of £30bn.
Tidal Lagoon Power, which received the green light in the budget to start talks with government on a subsidy regime, wants the £1bn Swansea project to be the start of a major new “game-changing” industry.
The company is already looking at sites for a factory to assemble wave turbines in the wider Swansea area while a tender for generators has already been awarded to General Electric in Rugby, Warwickshire.
George Osborne announced a formal undertaking to open talks with Tidal Lagoon Power as part of his wider budget speech. The first project at Swansea Bay will generate 500 gigawatt-hours of electricity per annum – enough to provide light and power for 120,000 homes – with the turbines working 14 hours a day.
Ed Davey, energy and climate change secretary, said there was a major opportunity to be seized as part of a necessary switch to low carbon energy propduction.
“Britain has some of the best tidal resources in the world – tidal lagoons could provide 8% of our electricity needs, replacing foreign fossil fuels with clean, reliable home-grown electricity and creating fantastic economic opportunities.”
Mark Shorrock, chief executive of Tidal Lagoon Power, said Swansea Bay could establish a blueprint for a major new source of low carbon power with British firms at the heart of the supply chain.
“It’s a game-changer; in a single step it presents the option to harness indigenous, renewable electricity at a low cost and a nuclear scale. These projects can now be developed relatively quickly and will outlive all of us,” he said.
Planning permission for Swansea Bay will come in front of ministers shortly while his Department of Energy and Climate Change (DECC) will start negotiations on a “strike price” under the government’s “contracts for difference” mechanism.
The starting point for negotiations will be a figure of around £168 per megawatt hour, although a “levelised cost of energy” estimate produced by independent consultancy Poyry believes it can be done for £150, falling to £92 for a third lagoon.
That compares with a strike price of £92.50 for the planned Hinkley Point nuclear plant in Somerset.
The money would come via customer bills and DECC said it would make sure the final cost was affordable, but Citizens Advice has already expressed concerns about its value for money.
Tidal Lagoon Power has already raised £200m worth of financial upfront investment from Prudential and InfraRed while Macquarie is helping to raise bank debt.
After Swansea Bay would come Cardiff, Newport Bay, West Cumbria, Colwyn Bay and Bridgewater Bay. Together, the lagoons could produce 8% of the UK’s total energy requirement for 120 years.
Greenpeace welcomed the move to give the green light to tidal power but said the UK’s renewable industry needed a long-term strategy, “not just a belated wink to green voters”.
Charities
Some £75m of fines collected from banks for manipulating the Libor interest rate have been allocated to military charities and other causes such as air ambulances.
Osborne said the measure took money from those who showed the worst values to support those who represented the best British values.
The spending over five years will include: a £25m healthcare fund for older veterans, including nuclear test veterans; £10m for armed forces charities to help those who fought in Afghanistan; £3m to the Royal British Legion to support members of the armed forces with mobility injuries; and £10m to buy new helicopters for the Essex & Herts, East Anglian, Welsh and Scottish air ambulances – and for the Lucy air ambulance, which transports children needing urgent care.
Osborne also increased the maximum that can be claimed through the Gift Aid small donations scheme from £5,000 to £8,000 from April 2016.
The measure will let small charities and amateur sports clubs claim up to £2,000 a year for small amounts raised through sponsored events and collecting tins.
“Blood-bike” medical courier charities will be eligible for VAT refunds along with search and rescue and air ambulance charities.
Farmers
Farmers welcomed Osborne’s decision to allow them to average their income over five years for tax purposes – a move they said would make it easier for them to cope with increasingly volatile market conditions.
Until now, farmers have only been able to average their income over two years, which means they can end up paying large tax bills in years when they have low income.
Meurig Raymond, president of the National Farmers Union, said: “We are very pleased that Mr Osborne said that he had listened to the arguments by the NFU and will allow farmers to average their incomes over five years.
“As he mentioned in his speech, farmers are increasingly facing a volatile marketplace and this will enable them to manage the impacts of this.”
Osborne had told MPs in his budget speech: “The fall in food prices is good for families; but it reminds us of the challenge our farmers face from volatile markets. The National Farmers Union have long argued they should be allowed to average their incomes for tax purposes over five years; I agree and in this budget we will make that change.”
The change will take place from next April and will cost £10m.
Churches with leaky roofs
An extra £40m for church and cathedral roofs was announced by the chancellor, after the £15m “church roof fund” he had announced in the autumn statement was “heavily oversubscribed”.
The move allowed the chancellor to play on a well-worn Conservative economic slogan: on revealing the popularity of the first fund, he said: “Apparently we’re not the only people who want to fix the roof when the sun is shining.”
The Archbishop of Canterbury, Justin Welby, tweeted: “Trebling of money for church repairs will create local skilled jobs, improve community facilities and protect heritage, most welcome.”
Claire Walker, chief executive of the National Churches Trust, told the Catholic newspaper Tablet that the extra £40m was “further welcome recognition by government of the importance to society of church buildings”.
She added: “Making sure roofs are wind- and water-tight is a vital necessity for churches – if water penetrates inside a church, much greater damage can occur resulting in further expensive repairs. Church buildings continue to play a vital role for society by providing a space for community activities, such as playgroups, cultural and social events.”
Fuel duty
The chancellor repeated a favourite budget trick by committing to freeze fuel duty for another year, allowing him to claim to have cancelled a September increase planned under the last Labour government.
Osborne said that the freeze, compared with the proposed escalator of above-inflation fuel duty rises, saved a family around £10 every time they filled up their car.
Duty has not increased since 2011, a fact that the Treasury claims will have saved a typical motorist a total of £675 by April 2016.
Some motoring organisations had hoped for a cut in duty, because tax, at 57.95p per litre, now accounts for more than half the cost of fuel at the pumps. But Prof Stephen Glaister, director of the RAC Foundation, said: “With fuel duty revenue making up 5% of the Treasury’s tax income, there was never going to be a huge giveaway as the chancellor still desperately needs motorists’ money.”
But he warned that almost a million of the poorest households spend a quarter of their outgoings on buying and running a car, adding: “It would be a mistake for politicians to think the cost of filling up is no longer an issue.”
Other transport campaigners said the freeze was a mistake. Claire Francis, head of policy for charity Sustrans, said: “[It] might seem like an easy, popular decision, but in reality is a false economy that will fail to make people better off in the long term. The continued freeze will do nothing for the 25% of households without access to a car and fails to provide any viable alternatives for those already struggling with the cost of driving.” She said dedicated investment in walking, cycling and public transport would see “growth without gridlock”.
The Campaign for Better Transport contrasted the move with silence on rail fares, which have risen more than 20% in the last five years. A spokesman said: “With fuel duty being frozen again, train users will be wondering why rail fares can’t be frozen.”
