#budget2013

By Travis Gordon

"The federal government wants to force Aboriginal youth into the labour job market by linking training to collection of welfare according to the 2013 federal budget. It’s offering up $241 million for employment training for youth but to qualify First Nation communities have to agree that recipients of the Income Assistance Program undergo specific job training. This means youth between the ages of 18-24 can’t collect welfare without taking job training on qualified First Nations. The government calls this “incentives” to participate. (...)"

  Key points affecting the industry:

infrastructure plans will be boosted by £3bln a year from 2015–16

tax incentives for low-emission cars

the Government will take forward two carbon capture and storage projects

pottery industry in Midlands to be exempt from climate change levy

tax allowances for investment in shale gas. George Osborne said: ‘Shale gas is part of the future’. 

  Industry said:

Tim Ryan, MD of Epigem, Redcar: ‘We welcome incentives through the tax system for UK companies to protect their IP, develop their IP and secure their freedom to manufacture. Initiatives like R&D tax relief and Patent Box are fantastic in making the whole patenting process more affordable and manufacturing more profitable.’

Dave Bull, director of quality engineering consultancy TEC: ‘The Government has really got behind the aerospace industry this week and they clearly view it as important for UK manufacturing. However the Chancellor has recognised the depletion in the skills base. He needs to do more on skills development, which the industry is crying out for. Mr Osborne needs to devote more resources to this area. There is little point investing in high tech machinery if there is no-one able to operate it.’

Peter Marchbank, CEO of Third Dimension of Bristol: ‘The Government has a vision for manufacturing, but without action from the Chancellor, this is just dreaming. And there was little action in the Budget. He focused on the right areas, but we’ve heard this before from Chancellors over the past decade. This particularly applies to skills where we are battling to secure the right skills sets. We need to get help to SMEs and we need more engineers – little about that today.’

Andrew Raingold, executive director of the Aldersgate Group: ‘The chancellor has prioritised increasing exports to the fast growing regions of the world but there is little support in the budget for green industries that have a strong foothold in these markets and a trade surplus of £5bn. Rather than tax breaks for shale gas, the UK needs a clear regulatory framework that will drive investment and export opportunities for low carbon technologies.’

Let us know your thoughts on the budget in the comments below, tweet us @MaterialsWorld or email [email protected]

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So the Budget has been announced with much fanfare. Or not. Thanks to announcements already made, and the leak of some of the details by the Evening Standard, much of the details were known.

Like by next year, we can all earn £10,000 tax-free. This, as some of you will be bored of hearing, is something I suggested as early as 2008. Oh well, better late than never.

Mr. Osbourne has announced things like 1p coming off the price of a pint of beer, and the scrapping of the planned fuel increase in September. If you're a business, you're in for even more treats: Corporation tax is coming down to 21p in the £ this year and 20p next year.

And if you hire staff and have to pay Employers National Insurance for them, you can have £2,000 off your bill; a boon to those mid-sized employers, who will suddenly be exempt from such charges. Such changes won't help Yours Truly, who is exempt from Employers NI anyways and as a sole trader doesn't pay Corporation Tax. Yes, the changes in the Personal Allowance (the tax-free amount I mentioned above) is nice, but not directly as a sole trader.

I normally read the actual Budget Report (pdf, 3.2mb) (or key elements of it anyways, much of it is incomprehensible unless you're the economics editor of the BBC), as there's always some other changes coming through which probably won't get as much coverage. This year though, there isn't much:

Your personal allowance (the amount you're allowed to earn tax-free) should be going up to £9,440 this tax year, and £10,000 next year, which is a year earlier than planned!

Vehicle duty for HGVs are being frozen this year, costing an estimated £10 million for the Treasury, but saving the shops etc. from having to increase costs ever so slightly. To coin a phrase, every little helps!

£30 million is being made available for small businesses for a "Growth Voucher" scheme, to help them 'overcome the barriers to growth'. How money will achieve this, as opposed to scrapping rules, is yet to be seen. 

The Government "is continuing to discuss options for funding improvements to the M4 in south Wales with the Welsh Government." No comment on the A14, which the Government also speculated could have a bypass built to it if it was a toll road.

The Government's new Universal Credit will be exempt from Income tax, irrespective of how much you receive.

There is also a suggestion made by George Osbourne in the House of Commons that income from the banks' LIBOR scandal would go to military charities, although this doesn't appear to be specified in the Budget Report itself (that I can find anyways!). Military pay rises are protected in part from the pay freeze affecting the rest of the public sector.

...all in all highlights that Mr. Osbourne and his team aren't announcing much except in the way of "tinkering at the edges", Don't get me wrong, some of his changes affect the Government's budgets by over £1 billion, such as the new Carbon Floor pricing for utility companies. But there aren't any "major" changes, save for the £2,000 NI benefit for companies. 

This is good - any sudden change or new policy could have made the markets scared, causing shockwaves in the stock market and therefore our pockets. A change in VAT, often suggested as a way of stimulate the economy by the Opposition, costs businesses a lot of money to bring into place, at the time where many businesses don't have the resources to do it. 

However, suggestions for capital expenditure, especially on our roads, schools and rail, would make an impact on our economy - projects would require jobs, would require workers, who earn money then pay tax and spend money - could arguably have made a difference. And while Page 35 of the Budget does mention an extra £3 Billion a year for projects, this isn't until 2015, and things could change between now and then.