Below is a summary of George Osborne’s latest budget, billed by the chancellor as “a budget for people who aspire to work hard and get on”. He describes it as a budget for people who realise there are no easy answers and says we have cut the deficit by a third, not a quarter.
September’s 3p rise in fuel duty has been cancelled.
The Government is maintaining the planned rise for all alcohol duty, with the exception of beer and beer duty is being cut by 1p. “We’re taking a penny off the pint,” said Osborne.
Personal allowance is to be raised to £10,000 by next year – one year earlier than planned.
Meaning almost 3m of the lowest paid will pay no income tax at all.
Corporation Tax rate cut to 20% from April 2015. Abolishing different rates. This will be offset by increasing the bank levy to 0.142pc from next year.
The Government is abolishing stamp duties on shares traded on growth markets such as AIM. In Europe, they’re introducing a financial transaction tax, said Osborne, but here, “we’re getting rid of one”.
New Employment Allowance to take the first £2,000 off the employer National Insurance bill of every company from next April.
Help for employees includes more generous shareholder status, Capital Gains Tax relief for sales of business to workers and a doubling to £10,000 for tax-free loans for commuters’ season tickets.
Support for families
Tax free child care worth £1,200 per child and increased support for families with children on universal credit.
The flat rate pension worth £144 a week is to be brought forward to 2016.
A cap on social care costs is to come in during 2017 and protect savings above £72,000.
Support for Equitable Life policy holders is extended to those who bought with-profits annuities before 1992, with payments of £5,000 and an extra £5,000 for those on lowest incomes.
Help for home buyers
Under the Help to Buy scheme, the Government will commit £3.5bn of capital spending over next three years to shared equity loans.
It will offer equity loans worth up to 20pc on a new build home for anybody looking to move up housing ladder.
New Help-to-Buy scheme for those struggling to find mortgage deposits will include a Government interest-free loan worth 20% of the value of a new build house. New mortgage guarantee sufficient to support £130bn worth of loans.
Office for Budgetary Responsibility forecasts show GDP growth of 0.6pc this year and 1.8pc growth next year, with 2.3pc growth in 2015.
That compares with 1.2pc, 2pc and 2.3pc in the Autumn Statement.
The OBR predicts that the deficit will stand at 7.4pc in 2012/13. It will fall to 5.4pc in 2014-15.
Net debt as a share of GDP will peak in 2016/17, the OBR forecasts. That is a year later than forecast in the Autumn Statement.
The OBR predicts that there will be 600,000 more jobs created this year and 60,000 fewer people claiming jobless benefits.
Bank of England
Osborne said the Bank of England may need to use unconventional monetary policy instruments.
The Bank will still target inflation at, or around 2pc.
However, it will be asked to explain in greater detail the trade-offs it has made when taking decisions to ensure better communication between the Bank and Treasury.
If the inflation target is missed, the Bank’s governor will still write a letter to the Chancellor, but not until the day when the minutes of that month’s interest rate meeting are published.
Currently, the letter is written on the day of the decision.
Spending and saving
The Government will seek to make £11.5bn of savings in the next spending round, previously the target was £10bn.
Total managed government expenditure for 2015/16 will be set at £754bn.
School and health budgets will be protected.
Public sector pay rises will be limited to 1pc a year in 2015/16.
The armed forces will get a pay rise of 0.5pc from May 1 and more money from fines relating to the Libor scandal will go to military causes.
Infrastructure and industry
Whitehall cuts will be used to boost infrastructure spending by £3bn a year from 2015/16.
Support will be provided for energy intensive industries.
Introduction of a “generous” new tax regime to promote early investment in shale gas.
Package of measures is being introduced to reverse decline in asset management industry.
Tax avoidance and evasion
The Government is to introduce a large new package of measures on tax avoidance and evasion to bring in £3bn in unpaid taxes.