Newport steelworks gets budget benefit

Newport steelworks gets budget benefit

Chancellor of the Exchequer George Osborne outside 11 Downing Street before heading to the House of Commons to deliver his annual Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 19, 2014. See PA BUDGET stories. Photo credit should

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NEWPORT’S steelworks are set to benefit from a £7 billion package of help for energy-intensive industries, chancellor George Osborne has announced.

Yesterday’s budget confirmed that the Welsh Government can use existing borrowing powers to build the M4, and announced a rack of changes to help savers and pensioners.

But Mr Osborne warned of more public spending cuts ahead despite improving economic forecasts.

He told the House of Commons: “The central aim of this government is to deliver economic security. We are not promising quick fixes.

“We are turning this country around. This is a budget for the makers, the doers and the savers.”

For a long time energy-intensive industries like Tata Steel, which owns Newport’s Llanwern works, had called for help for their energy costs, which can be twice as much here as on the continent.

But after yesterday’s budget, energy-intensive industries in Wales are set to benefit from plans to compensate them for higher electricity prices resulting from government policies.

The support is worth around £240 million between 2016 and 2019, according to the Wales Office.

A cap on the Carbon Price Floor – a tax on fossil fuels – could benefit businesses in Wales by £230 million from 2016 to 2020.

Meanwhile the Government has agreed the Welsh Government can use existing borrowing powers to begin investing in M4 improvements – such as the M4 relief road.

The Wales Bill, which will allow the Welsh Government to raise taxes and additional ways of borrowing money, is also set to be introduced in parliament today.

Overall the Welsh Government will see its budget increase by £36 million over two years.

Mr Osborne said the economy would grow by a better-than-forecasted 2.7 per cent in 2014 and the Government would be back in surplus by 2018-19.

Crowd-pleasing items included scrapping the duty escalator on wine and spirits and a penny off a pint of beer, while duty on ordinary cider was also frozen.

Cash and stocks ISAs are to be merged into a single new ISA, with the annual tax-free savings limit increasing to £15,000.

Mr Osborne added he was proposing the most “far reaching reform to the taxation of pensions since the regime was introduced in 1921”, and announced a state-backed pensioner bond to help people who have suffered low returns since interest rates were slashed.

But the chancellor told the commons that to secure Britain’s future there would need to be more cuts.

HOW COULD THE BUDGET AFFECT YOU?

Newport chartered accountants Kilsby and Williams analyses Tuesday’s budget:

WEALTHY childless couple with a combined income of £240,000 per annum – husband is a solicitor and wife has a business earning £40,000 a year.

This couple will find themselves £7 better off per month from April 2014. The wife will have around £10.50 more per month due to the increase in her tax free personal allowance from £9,440 to £10,000. The husband will have £3.50 less money available due to the reduction in the higher rate threshold.

From April 2015, the wife’s personal allowance will be further increased to £10,500. The savings made will be kept by the couple as the husband will benefit from the reduced higher rate threshold.

FAMILY, with husband earning £30,000 per annum and stay-at-home wife, with two children.

The Budget changes will see the family better off by £16.29 per month from this April as a result of the increase in the personal allowance to £10,000, a one per cent increase to child benefit and small increases in working tax credits.

The additional increase in the personal allowance to £10,500 in a year’s time will give them a further £8.34 per month to spend.

SINGLE mother working 18 hours a week and earning £9,000 per annum. She will remain completely out of the income tax net as her personal allowance is higher than her annual income.

The slight increase in the basic, child and lone parent elements of the working tax credits mean she will also receive an additional £1.55 per week in benefits.

However she will still be liable to national insurance. As she has no tax she will not benefit from the childcare support like the couple above.

However, if her income goes over the personal allowance then she may also benefit from this tax break.

RETIRED couple over 74, living off their state pension, which the husband supplements by a small personal pension of £7,000 per annum.

At present, their net income is approximately £1,345 per month. From April this year, as a couple they will be better off by £15.36 due to the increase in the state pension.

From 6 April 2015, it will be possible for the wife to transfer £1,050 of her unused personal allowance to her husband resulting in an annual saving of £210.

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