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Budget 2016: not exactly a cocktail of risks

18 March 2016

Alexandra Cardenas outlines the topline figures from the Budget announcement and provides an update on the Investigatory Powers Bill.


On Wednesday 16 March, George Osborne MP presented his 2016 Budget. 

Many had predicted the Budget would not be a particularly enthralling affair with the chancellor, and prime minister, not wanting to upset either their own backbenches or the public with unpopular or controversial policies. The rather gloomy economic figures that Osborne had started the speech with also meant he didn't have the luxury for big spend announcements like the Autumn Statement. 

The chancellor of the exchequer was clear that he was staying on course with his long term economic plan, arguing that it had allowed the UK to be one of the most prepared countries for any future global economic slowdown. He regularly repeated that there is a "cocktail of risks" facing the economy and that he plans to "act now so we don't pay later." 

Osborne seemed to focus on "putting the next generation first" with the phrase repeated six times within his speech. This translated into policy announcements on providing a gold standard of education, a "sugar tax" to tackle obesity and support for under-40s to begin saving. The much mooted "sugar tax" gave the papers a natural headline, but since the Budget has come under more scrutiny with Labour and charities arguing against his corporate tax cuts while significant cuts to disability benefits were announced. 

Controversially, particularly with his own backbenchers, the chancellor used the Budget to reiterate his view on the EU Referendum, arguing that Britain is "stronger, safer and better off inside a reformed European Union." He leaned on the Office of Budget Responsibility (OBR) perspective who have concluded that a vote to leave would be "potentially disruptive" while the precise details of the UK's new relationship with the EU is negotiated. 

Watch the full speech

Read the accompanying documents 

Monday 14 March

Nothing to report.

Tuesday 15 March

House of Commons

Investigatory Powers Bill - second reading

The second reading of the Investigatory Powers Bill took place in the House - legal professional privilege was a key component discussed by MPs. The home secretary faced calls from senior Conservatives and the Opposition to improve the Bill to allay concerns about privacy.

During the debate, former home secretary Ken Clarke MP (Con) and former attorney general Dominic Grieve QC (Con), suggested there could be improvements to the new laws that overhaul the state's surveillance powers.

The Bill passed easily with 281 for and just 15 against, mostly comprising Liberal Democrats, while Labour and the SNP abstained. They abstained as they remain unconvinced about whether privacy is adequately protected, while the Liberal Democrats are going one step further and voting against the Bill. 

As it stands, the Bill will hand law enforcement agencies more access to people's internet connection records but also make sure judges oversee the granting of warrants for interception. The home secretary said privacy was "hard-wired" into new controversial surveillance powers and they would not give security services generalised access to people's web browsing histories.

But shadow home secretary Andy Burnham (Lab) said he wanted to see a general presumption in favour of privacy along with at least six other improvements before the party could be persuaded to back the Bill.

Mr Burnham stated that he did not believe that the government had gone far enough in the protection of the role of sensitive professions, and referencing the Law Society, said that although he was pleased to see that the government have acknowledged legal professional privilege, more adequate protection is needed, and believes that that should be in the Bill, not just the codes that go with it.

The home secretary countered this by stating that in terms of an adequately senior level of authorisation, the deliberate interception of legally privileged communications can be authorised only in exceptional and compelling circumstances, such as where it is necessary to prevent the loss of life. 

Former home secretary David Davis MP (Con) waded in with reference to RIPA's erosion of legal privilege at the expense of increased surveillance, and his concerns on the lack of clarity regarding the previously clear mandate on whether private correspondence between an individual and their lawyer. 

The Bill is now moving to committee stage, to be considered by a Public Bill Committee, which is expected to hold oral evidence sessions on Thursday 24 March.

Read the full transcript 

Policing and Crime Bill - Committee Stage

Following the second reading of the Policing and Crime Bill in the House of Commons on 7 March, in which the Law Society briefed a number of Parliamentarians, the Bill moved to a Public Bill Committee. 

Chaired by George Howarth (Labour) and David Nuttall (Conservative), witnesses including chair of the Police Federation and president of the Police Superintendents Association of England and Wales. 

The issue of pre-charge bail was raised by Conservative MP James Berry, who questioned the limitation on the length of time someone can be held on such a bail period, specifically what else would the police would do to respond to that limitation on their powers in cases where at the moment they are taking longer to investigate. 

Read the full transcript

House of Lords

Trade Union Bill - Lords Report Stage 

The Law Society was referenced in the report stage of the House of Lords' review of the Trade Union Bill. Lord Kerslake (Crossbench) cited how the Law Society, among other such organisations (included the Institute of Chartered Accountants and Nationwide Building Society) used electronic balloting as part of their broader governance structures.

Civil Proceedings, Family Proceedings and Upper Tribunal Fees (Amendment) Order 2016

Minister of state for justice Lord Faulks moved a motion on the draft order to introduce enhanced fees for certain types of civil and family proceedings. Specifically, the order will increase the fee to issue a possession claim in the county court to £355 from £280 and there will be a 10 per cent fee discount for possession claims made online. 

It will also increase the fees for a general application made in civil proceedings to £100 for an application made by consent or without notice and to £255 for a contested application. These changes will also apply to general applications made in judicial review proceedings heard in the Immigration and Asylum Chamber of the Upper Tribunal.

The Law Society briefed Lord Beecham, Labour shadow spokesperson for justice and housing, who referenced the Law Society on a number of issues, including the fact that it is only a year since the last increase, and highlighting the difficulties in immigration cases, where there are already problems with costs, an application for indefinite leave to stay having gone up from £1,093 to £1,500, and where there is an additional NHS charge of £500. He went on to state our concern that there is a worry about the burden of such fees in a sensitive area involving human rights and a risk that some potential applicants will resort to overstaying illegally because they will be unable to raise the necessary money to proceed with an application. 

Lord Beecham finished by withdrawing the amendment while continuing to express regret about "what many in the profession, and many who support people endeavoring to seek justice, maintain is a thoroughly bad decision by the government and a thoroughly bad order."

Read the legislation

Wednesday 16 March

Financial Statement

Budget announcement

The chancellor of the exchequer gave his eagerly anticipated Budget speech to the nation, laying out the next year's financial and monetary policies and ambitions of HM Treasury. 

Topline points include:   

• A further £3.5bn of public spending cut in 2019-2020

• £12bn to be raised by tackling tax avoidance and tax evasion in this Parliament and the publication of a corporate tax roadmap. 

This will include:

– Restrict interest deductibility for the largest companies at 30 per cent of UK earnings but with the caveat of group ratio rule for those with justified higher borrowing

– New hybrid mismatch rules to stop the complex structures that allow some multinationals to avoid paying any tax anywhere

– Strengthening withholding tax on the royalty payments that allow some firms to shift money to tax havens

– Restrict the maximum amount of profits that can be offset using past losses to 50 per cent to those making profits over £5m

• Changes to commercial stamp duty rates went live at midnight on 17 March. The new rates are:

– Zero rate band on purchases up to £150,000

– Two per cent on the next £100,000

– The top rate of five per cent will apply to above 250,000

• A new two per cent rate for those high value leases with a net present value above £5 million

• Stamp duty rates on additional properties will apply to large investors

• An agreement with Ministry of Justice to transfer new powers over the criminal justice system to Greater Manchester 

• Insurance Premium Tax to be raised by 0.5 per cent which will be spent on flooding defences

• Small business rate relief will raise from £6,000 to a maximum threshold of £15,000. The higher rate will also raise from £18,000 to £51,000

• Corporation tax will lower from 18 per cent to 17 per cent in April 2020

• Greater London Authority to retain of business rates from April 2017

• Capital Gains Tax is lowered from 28 per cent to 20 per cent with the basic rate from 18 per cent to 10 per cent

• The ISA allowance will rise from £15, 240 to £20,000 in April 2017

• A lifetime ISA for under 40s where you can save £4,000 a year and be given £1,000 by the government

• Consult on introducing a single clear definition of financial advice

• An increase on tax free personal allowance to £11,500 in April 2017 (on track to achieve his target of £12,500 by 2020) 

• An increased threshold for higher rate tax to £45,000

Thursday 17 March

Nothing to report.

Friday 18 March

Nothing to report.

Tags: Investigatory Powers Bill | Westminster weekly update | Budget

About the author

Alexandra Cardenas is Head of Public Affairs and Campaigns at the Law Society. Public Affairs manages the relationships with parliament and government. She is a dual qualified solicitor in England and Wales (2014), and Colombia (2002). Prior to the Society, she practised as a human rights lawyer and worked at Macmillan Cancer Support and Animal Defenders International.

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