[Continued from Legislative Outlook 2010-11 (Part 5)]
(a) National Insurance Contributions Bill
The purpose of the Bill is to increase rates of National Insurance Contributions (NICs) - from April 2011 by 1%, in line with the previous government's plans. The Bill will also, however, increase the NICs threshold. Consequently, employers and most employees will pay no more NICs than they are currently, and people earning under £20,000 will actually pay less.
(b) Emergency Budget: 22nd June 2010
An emergency Budget on 22 June will set out the coalition plans to eliminate the bulk of the UK structural deficit over the course of the Parliament.
To reassure the markets, the Government has created an independent Office for Budget Responsibility (see Legislative Outlook 2010-11 (Part 4)) to make economic and public finance forecasts which the chancellor will have to rely on in formulating the Budget.
The main burden of deficit reduction will be borne by reduced spending rather than increased taxes. The Treasury will undertake a full Spending Review, and report back in the autumn.
The first Budget will announce a significant increase in the personal allowance for income tax, with a longer-term objective to increase the personal allowance to £10,000.
The Budget will set out a five-year roadmap for a big reform of corporation tax, which it says it will reduce and "simplify".
Capital gains on non-business assets will be taxed at rates closer to those applied to income tax, but with no exemptions for business.
The Government will also create an independent Office of Tax Simplification to suggest reforms to the wider tax system.
Demand for travel between major British conurbations is expected to increase significantly over the next twenty to thirty years. High speed rail appears best placed to provide significant and sustainable additional capacity to meet that demand, whilst also improving journey times.
HS2 Ltd (the company set up by Government to investigate the case for High Speed Rail) have estimated the cost of a London-Birmingham line as around £17 billion, though the bulk of this expenditure would not be incurred until construction begins, and calculate that such a line could provide high value for money with more than £2 of benefits for every £1 spent.
The construction of a high speed rail line will require the introduction of a hybrid High Speed Rail Bill in due course.
Links to other parts of the Legislative Outlook 2010-11:
- Legislative Outlook 2010-11 (Part 1) - Business, Education, and Employment
- Legislative Outlook 2010-11 (Part 2) - Environment and Government Reform
- Legislative Outlook 2010-11 (Part 3) - Government Reform (continued)
Legislative Outlook 2010-11 (Part 4) - Government Reform (continued)
Legislative Outlook 2010-11 (Part 5) - Healthcare, Immigration, and Welfare/Social Security