This week, the Chancellor of the Exchequer, Jeremy Hunt, announced the November budget. From a property perspective, one of the promises made by the Chancellor is to reform the planning system. He argued that it takes too long to approve infrastructure projects and business planning applications. As such, from next year councils will be able to recover the full cost of major planning applications as an incentive to make planning decisions in a shorter period. If they fail, the companies will be refunded automatically.
According to Institute of Civil Engineers (ICE), major planning applications such as those for infrastructure can take up to five months longer than it took ten years ago. However, although the reforms may have been proposed with good intentions, the concern is that in order to stick to deadlines, due diligence will be overlooked. This could result in environmental concerns or perhaps approval of planning applications where sub-standard materials are used to the detriment of purchasers. Therefore, in order for the reform to work, it would be necessary to have a due diligence system that will be capable of being supervised and enforced.
Many were disappointed that the Chancellor did not make any reforms regarding inheritance tax or Stamp Duty Land Tax. The reforms to business investments by way of a business tax relief may or may not be practical in reality. For every £1 that a business invests in IT, machinery and equipment, they can claim 25 pence in corporation tax. Businesses or companies can do this at once as opposed to having to offset the cost against corporation tax. Are some of these statements with political intent? As commented by Chris Mason on the BBC website, “I spot a bit of a marginal seat bingo going on at the moment”. He further states that: “The chancellor is mentioning various MPs who have been lobbying him and who he is listening to, and plenty are in seats the Conservatives hope to hold on to come the general election”.
Overall, a big question mark as to whether the reforms can be implemented properly but good news for pensioners whose pensions will increase by 8.5% from April 2024 to £221.20. Also good new regarding the living wage increase to £11.44. However, according to the Office for Budget Responsibility, inflation is expected to remain higher for longer with the return of the 2% target not expected until the second quarter of 2025. They further state that the tax burden - the percentage of the nation's income going to the taxman - is still set to rise to a post-war high. For instance, the National Insurance cut will leave more in workers’ pay packets, but the ongoing freeze in income tax thresholds drags many into paying more tax. Thus, that tax cut is being funded by raiding our paycheques.
The announcement therefore went some way to easing voters woes but there is still some way to go.