October 26 2014 Latest news:
Chancellor George Osbourne delivers his budget to the House of Commons in Westminster, London. PRESS ASSOCIATION Photo. Picture date: Wednesday March 20, 2013. See PA story BUDGET Speech. Photo credit should read: PA Wire
Thursday, March 21, 2013
Chancellor George Osborne rose to deliver his 2013 Budget Statement to the House of Commons at 12.32pm.
- The GDP growth in 2014 is forecast to be 1.8%, then 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017, according to the Office for Budget Responsibility (OBR). In the short-term it predicts the UK will avoid a second quarter of negative growth and a triple-dip recession.
- The deficit has been cut by a third from 11.2% of GDP in 2009/10 to a predicted 7.4% this year. It is expected to fall to 6.8% next year, 5.9% in 2014/15, then 5%, 3.4% and 2.2% by 2017/18.
- The OBR forecasts higher employment, with 600,000 more jobs expected in 2013 than this time last year.
- Borrowing predicted to fall from £108 billion next year to £97 billion in 2014/15, then £87 billion, £61 billion and £42 billion in following years. Meanwhile, the proportion of national income spent by the state has fallen from 47.4% three years ago to 43.6% today and is on course to reach 40.5% by the end of the period.
- Public sector net debt to be 75.9% of GDP this year then 79.2%, 82.6%, 85.1%, 85.6% in following years before falling to 84.8% in 2017/18.
- The Bank of England’s Monetary Policy Committee keeps 2% inflation target.
- Whitehall department budgets to be cut by 1% after £11 billion underspend this year, while Mr Osborne will seek £11.5 billion savings in the spending review for 2015/16, up from the previously announced £10 billion. But spending on schools and health will be protected.
- The public sector pay cap of 1% is to be extended by one year in 2015/16. Mr Osborne said “substantial savings” had to be found in annual progression pay rises in parts of the public sector.
- But the military will receive the full recommended increase in “X-Factor” payment in May and will be exempted from changes to progression pay.
- There will be a new limit on “annually managed expenditure”, which includes welfare budget, debt interest and payments to EU. The European budget deal secured by David Cameron saved the UK £3.5 billion, according to the OBR.
- Infrastructure plans to be boosted by £3 billion a year from 2015/16, a total of £15 billion over the next decade.
- The Government intends to take forward two major carbon capture and storage projects.
:: There will be a “generous” new tax regime to promote early investment in shale gas, while there will be tax incentives for the manufacture of ultra low emission vehicles.
Taxes and welfare
- Mr Osborne said corporation tax will be reduced by a further 1% to 20% in April 2015, while small company and main rates of corporation tax will be merged at 20p. Reductions in corporate tax will be paid for by increasing the bank levy rate to 0.142% next year.
- 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.
- There will be a large new package of measures on tax avoidance and evasion to bring in £3 billion in unpaid taxes.
- New Employment Allowance will take the first £2,000 off the employer National Insurance bill of every company in the country. Around 450,000 small businesses - one third of all employers - will pay no employer National Insurance at all after the introduction of Employment Allowance in April next year.
- Rise in personal allowance brought forward to 2014. This will mean no income tax will be paid on the first £10,000 of earnings.
- The Capital Gains Tax holiday is to be extended.
- Tax-free child care vouchers worth £1,200 per child and increased support for families with children on universal credit.
Pensions and social care
- The flat rate pension worth £144 a week will be brought forward to 2016.
- The cap on social care costs will be introduced in 2017 and protect savings above £72,000, while the threshold for means-tested help is to be raised from £23,000 to £118,000.
- There will be help for Equitable Life policy holders extended to those who bought with-profits annuities before 1992, with payments of £5,000 and extra £5,000 for those on lowest incomes.
- A new Help-to-Buy scheme for those struggling to find mortgage deposits will include £3.5 billion for shared equity loans, and a Government interest-free loan worth 20% of the value of a new build house.
- The new mortgage guarantee, sufficient to support £130 billion worth of loans, will be introduced to help people who cannot afford a big deposit.
Fuel and beer duty
- This September’s planned rise in fuel duty rise has been scrapped.
- The planned 3p rise in beer duty tax has also been scrapped and replaced by a 1p cut in duty on a pint of beer.
- The beer duty escalator is axed but planned rises for all other alcohol duties will be maintained.
The Chancellor sat down at 1.36pm.