Osborne’s budget has been and gone.

I often find myself saying “…yes, but what does it all mean?!” And today, I’m afraid, is no exception… except for the fact I’ve got it all worked out already. Here, I intend to tell you in plain English what some key bits of George’s budget 2016 actually mean. In a nutshell, it’s about saving the world. By ‘world,’ I do of course mean ‘UK.’

What does it mean to have a new sugar tax?

The aim of George’s sugar tax, and I won’t bother with puns as they’re so yesterday, is threefold. First, it aims to make unhealthily sugary soft drinks more expensive to make. It’s up to the makers to decide whether they pass this extra cost on to the consumer or reduce the amount of sugar in the drinks. Second, it’s made Jamie Oliver go away. Third, it’s going to get all the kids drinking cider instead.

Passed on to the consumer, the increased cost would make healthier drinks like fruit juice and water (and cider) more competitive. This is of course to do with trying to make the next generation – the one now likely to be tasked with dragging us all out of the quagmire – healthier and toothier for years to come. Healthier people use less of the NHS. And the money raised from the sugar tax will be used to fund additional school activities like sport, art and whatever else can be done to keep the kids amused while the parents are doing overtime at work. Why are they doing overtime at work? Why, to try to cobble together the  deposit they need to get on that fabled property ladder of course! And they’ll definitely vote for George when he vies to become prime minister.

I feel that after-school tuition in Science, Technology, Engineering and Mathematics (STEM) might be better, given how badly the UK needs this skillset, but I can live with art for now.

What does it mean for Capital Gains Tax to be cut from 28% to 20%?

This bit of budget 2016 is due to affect the several people in the UK who pay tax.

Capital Gains Tax is paid when you sell something that’s gone up in value. Decreasing this might be a way to get cash moving around the economy again. If CGT is 28%, you might wait longer for your asset to increase in value such that you bank a decent profit after tax. If it goes down to 20%, you wouldn’t have to wait as long to bank the same relative amount of profit.

If you’ve been sitting on an asset for years, this move might just convince you to cash out and get spending. In particular, if you’ve got a second home then you might be convinced to sell that which would help address supply and demand in the property market – a key sector here in the UK. Those who benefit from this will almost surely vote for George in 3 years’ time.

What is the new ‘lifetime’ ISA for the under-40s?

This new hybrid product is designed to bridge a gap between what can be very inflexible pensions and the flexibility of an ISA. While called an ISA, however, funds are only accessible from the age of 60 unless you’re a first time-buyer requiring early access to get yourself on that fabled ladder. And that’s assuming enough people are willing to sell given the reduction in CGT that prices are anywhere near affordable for the average first-time buyer by the time they’ve saved enough for the deposit.

Nonetheless, the idea really does look more designed to help get young people on the property ladder than to help them save for retirement. The limited bonus element may mean that those nearer the age of 40 are better off with existing products with tax relief. Nonetheless, votes aplenty await George from all those millions of people who are able to save £4,000 a year for their babies. Go budget 2016!

What does it mean for business rates to be scrapped for 600,000 businesses?

George wants to make things simpler. How much simpler can you get than saying “ok, don’t pay business rates”?

What this also does is remove the perceived barrier a lot of people see in the costs associated with starting and running businesses – both financial and faff-related. Small businesses sometimes grow into large businesses. What’s more, they employ people. That brings down unemployment and gets inflation up and running. The world is then saved.

Oh, and it gets votes for George from all the people who work hard running their small businesses – that’s one helluva lot of people.

What does it mean for Class 2 NICS to be scrapped for sole traders?

The scrapping of national insurance payments for the self-employed could be seen as a bit of a two-wayer. Yes, it’s a saving, but national insurance goes towards your state pension. George knows this doesn’t matter, however, because by the time today’s 30 somethings reach retirement age it will have increased to beyond the average life expectancy.

So there you have it. A few choice bites from Budget 2016 that will assist you at your next dinner party. I could go on, but I’ll probably be penalised by my SEO robot administrator.

Augustin Eden, Research Analyst