Module 10: ASEAN Finance and Accounting
Table of Contents
Activities
Activity 5
Read the 6 excerpts from the UK Chancellor’s speech and paraphrase them. Type in the box.
Excerpt 1
Let me turn to the underlying cash borrowing numbers. Britain was borrowing £157 billion a year before we came to office. This year we expect to borrow £108 billion. That’s £12 billion less than forecast a year ago.
Indeed even since the Autumn Statement the OBR have revised down borrowing in every single year. In 2014-15 they say it will fall to £95 billion. Then it falls again to £75 billion in 2015-16, then £44 billion, then down to £17 billion. In 2018-19 we won’t be borrowing at all. We will have a small surplus of almost £5 billion.
Taken together, these new figures mean Britain will be borrowing £24 billion less than was forecast. That’s more than we spend in an entire year on the Police and Criminal Justice system.
Lower borrowing and a smaller deficit mean less debt.
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Possible answer: Over the next five years the OBR predict that borrowing will be reduced to nothing. It will have gone from £157 billion a year before we came to office through the £108 billion expected this year, and progressively down: £95 billion, £75 billion, £44 billion, and then £17 billion. In 2018-19 we will have a small surplus of almost £5 billion. The lower borrowing and smaller deficit will mean less debt. |
Excerpt 2
Many Chancellors, faced with a recovering economy and improved borrowing forecasts before an election, would be tempted to squander the gains. I will not do that today.
These gains were hard won by the British people – and we’re not going to jeopardise their economic security. Britain is not going back to square one. So in this Budget all decisions are paid for. Taxes are lower but so too is spending. For we must bring our national debt substantially down.
Analysis published today shows just running a balanced current budget does not secure that. Instead, Britain needs to run an absolute surplus in good years. We will fix the roof when the sun is shining – to protect Britain from future storms. So I can confirm that in addition to the cuts this year and next, there will be cuts in the next Parliament too.
To lock in our country’s commitment to this path of deficit reduction we will seek the support of Parliament in a vote. And I will bring forward a new Charter for Budget Responsibility this autumn.
We are taking further difficult decisions now so we can reduce the deficit and protect our NHS and schools and meet our obligations to the world’s poorest by contributing 0.7pc of our national income to help them.
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Possible answer: The gains of a recovering economy might be thrown away by many, but I will not jeopardise the economic security. Britain is going to bring its national debt down substantially by running an absolute surplus in good years. There will be cuts this year and next, and we will seek Parliament support to bring a new Charter for Budget Responsibility. This will protect our NHS and schools and help with obligations to contribute 0.7pc of our national income to the world’s poorest. |
Excerpt 3
Welfare
We set out today the details of that welfare cap – and we will seek the support of Parliament for it next week. From housing benefit to tax credits, the full list of benefits included in the cap is published in the Budget document today. Only the State Pension and the cyclical unemployment benefits are excluded.
I am setting it at £119 billion in 2015-16. It will rise, but only in line with forecast inflation, to £127 billion in 2018-19.
Britain should always be proud of having a welfare system that helps those most in need. But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work.
In future, any government that wants to spend more on benefits will: have to be honest with the public about the costs, need the approval of Parliament, and will be held to account by this permanent cap on welfare.
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Possible answer: We should not allow welfare system costs to spiral out of control, and today they have be capped at £119 billion in 2015-16. Help of Parliament will be sought, and State Pension and the cyclical unemployment benefits are excluded. It will rise, but only in line with forecast inflation, to £127 billion in 2018-19. Future governments will have to be honest about the costs, need approval of Parliament, and be held to account by this permanent cap. |
Excerpt 4
In just two weeks corporation tax will be down to 21pc, high street stores will get £1,000 off their rates, and every business in the country will get the Employment Allowance – a £2,000 cash-back on jobs.
Next year, corporation tax will reach 20pc and we take under 21s out of the jobs tax altogether. Businesses keeping more of their money to create jobs and invest in the future. Today I want to go further.
Many of the enterprise zones we created are now flourishing – so the business rates discounts and enhanced capital allowances will be extended for another three years.
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Possible answer: With many created enterprise zones now flourishing the business rates discounts and enhanced capital allowances will be extended, and corporation tax will be down to 21 percent. Every business will get the £2,000 cash-back on jobs Employment Allowance, and high street stores will get £1,000 off their rates. Businesses should keep more of their money to create jobs and invest in the future, so next year corporation tax will reach 20 percent and we will take under 21s out of the jobs tax altogether. |
Excerpt 5
Two years ago, I launched the Seed Enterprise Investment Scheme to help finance start-ups. It’s been a great success and I’m making it permanent. We’re backing investment into social enterprises with a Social Investment Tax Relief at a rate of 30pc.
And we’re supporting our creative industries too. The European Commission has today approved the extension of our film tax credit – and I will apply the same successful approach to theatre, especially regional theatre.
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Possible answer: The Seed Enterprise Investment Scheme to help finance start-ups launched two years ago will be made permanent, and a 30 percent Social Investment Tax Relief will be given to back social enterprises. Our creative industries will be supported with our film tax credit having today been approved by The European Commission. This successful approach will be applied to theatre, especially regional theatre. |
Excerpt 6
Personal allowance
It is a central part of our long term economic plan that people keep more of the money they have earned. When we came to office, the personal tax allowance was just £6,500. In less than three weeks’ time, it will reach £10,000. That’s an income tax cut for 25 million people.
Today, because we are working through our plan, we can afford to go further. Next year there will be no income tax at all on the first £10,500 of your salary. Ten and a half thousand pounds tax free. £800 less in tax every year for the typical taxpayer.
Our increases in the personal allowance will have lifted over 3 million of the lowest paid out of income tax altogether. And I am incredibly proud we have achieved that.
I can also confirm today that the higher rate threshold will rise for the first time this Parliament, from £41,450 to £41,865 next month, and then by a further 1pc to £42,285 next year.
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Possible answer: 25 million people will get an income tax cut through our having increased personal allowances from £6,500 to £10,000. This is a part of our plan that people keep more of the money they have earned. Today, we can afford to go further and say that next year there will be no income tax on the first £10,500 of salaries. These personal allowance increases will lift over 3 million of the lowest paid out of income tax altogether. I can also confirm that the higher rate threshold will rise from £41,450 to £41,865, and then by a further 1 percent next year. |
Excerpts
(Source: http://www.telegraph.co.uk/finance/budget/10707864/Budget-2014-The-Chancellors-speech.html retrieved 28/5/2014)