2016 United Kingdom budget

2016 United Kingdom budget

Presented	Wednesday 16 March 2016
Parliament	56th
Party	Conservative Party
Chancellor	George Osborne
Total revenue	£716 billion ($1.18 trillion)
Total expenditures	£772 billion ($1.27 trillion)
Deficit	£56 billion ($92.15 billion)
Website	2016 UK Budget
‹ July 2015 2017 ›

The 2016 United Kingdom budget was delivered by George Osborne, the Chancellor of the Exchequer, to the House of Commons on Wednesday, 16 March 2016.^[1]

It was the second fully Conservative budget delivered by Osborne, after the July 2015 budget.

Background

In the November 2015 Autumn Statement, the independent Office for Budget Responsibility predicted that the UK economy would grow by 2.4% in 2016.^[2]

Budget announcements

• Osborne will introduce a sugar tax from 2018, raising around half a billion pounds which will be used to fund after-school activities such as sport and art.^[3]
• The predicted GDP growth for 2016 was lowered to 2% from 2.4%.^[3]
• The tax-free allowance will be raised to £11,500 and the 40p tax threshold will increase to £45,000.^[3]
• There will be a new "lifetime" Isa for the under-40s, with the government putting in £1 for every £4 saved.^[3]
• Funding was earmarked for High Speed 3 (an East-West rail line across the North of England,) Crossrail 2 (a North-South rail line across London), a road tunnel across the Pennines and upgrades to the M62 motorway.^[3]
• £115 million was allocated to tackle rough sleeping.^[4]
• Public sector employers will be required to contribute a higher proportion to their workers' pensions from 2019-2020^[5]
• Tobacco duty was increased by 2%^[6]
• Hand rolling tobacco duty was increased by 3%^[6]
• Fuel duty frozen at 57.95p per litre^[7]
• VAT on tampons cut from 5% to 0%.^[8]
• The halving of tolls across both Severn Bridges from 2018.^[9]

2016–17 taxes and spending

Taxes

Receipts	2016-2017 revenues. [10]
Income Tax	182
Value Added Tax (VAT)	138
National Insurance	126
Excise duties	48
Corporate Tax	43
Council Tax	30
Business rates	28
Other	120
Total Government revenue	716

Spending

Department	2016-2017 Expenditure.[11]
Social protection	240
Health	145
Education	102
Debt interest	39
Defence	46
Public order and safety	34
Personal social services	30
Housing and Environment	34
Transport	29
Industry, agriculture and employment	24
Other	49
Total Government spending	772

Reactions

The Leader of the Opposition, Jeremy Corbyn, described the budget as "unfairness at its very core", singling out cuts to disability benefits and corporate tax for particular criticism. However, he expressed his approval for the introduction of the sugar levy in his House of Commons response.^[12]

Secretary of State for Work and Pensions, Iain Duncan Smith, resigned two days after the presentation of the budget, describing planned cuts within his department "as a compromise too far".^[13]

See also

• United Kingdom budget

References

1. HM Treasury (1 December 2015). "Budget 2016 - Chancellor announces date". gov.uk. GOV.UK.
2. Penny, Thomas (25 November 2015). "U.K. 2016 economic growth forecast raised to 2.4%, Osborne says". Bloomberg News.
3. Staff writer (March 2016). "Budget 2016 summary: Key points at-a-glance". BBC News (BBC).
4. Whale, Sebastian (16 March 2016). "George Osborne to announce £100m to tackle homelessness". PoliticsHome (Dod's Parliamentary Communications).
5. Pennells, Sarah. "Budget 2016 - how are you affected?". SavvyWoman. Retrieved 16 March 2016.
6. Staff writer (16 March 2016). "Cigarette prices in UK will be subject to ‘effective floor’". Financial Times (Nikkei). (subscription required (help)).
7. Staff writer (16 March 2016). "Budget 2016: Fuel duty frozen for sixth year in a row". BBC News (BBC).
8. Staff writer (17 March 2016). "Deal reached to scrap 'tampon tax', officials say". BBC News (BBC).
9. Staff writer (16 March 2016). "Budget 2016: Severn bridge tolls to be halved". BBC News (BBC). Retrieved 19 March 2016.
10. HM Treasury, "Government spending and revenue: Chart 2: Public sector receipts 2016-17", in HM Treasury, Budget 2016 (pdf), London: HMSO, p. 6, ISBN 9781474129572.
11. HM Treasury, "Government spending and revenue: Chart 1: Public sector spending 2016-17", in HM Treasury, Budget 2016 (pdf), London: HMSO, p. 5, ISBN 9781474129572.
12. Staff writer (16 March 2016). "Budget 2016: Jeremy Corbyn attacks Osborne's 'failure'". BBC News (BBC).
13. Staff writer (19 March 2016). "Iain Duncan Smith quits over planned disability benefit changes". BBC News (BBC).