The chancellor claimed Britain was “walking tall again” after five years ofausterity while announcing the budget 2015 which has been dubbed as
budget for savers.He also cut 1p from beer duty, 2% from cider and whisky and froze fuel andwine duty. Cigarettes will go up by 16p a pack as earlier planned.However, Labour leader Ed Miliband said Mr Osborne had “failed working
families”.”This a Budget that people won’t believe from a government that is not on theirside,” Mr Miliband told MPs.The Lib Dems – who will set out their own tax and spending plans on Thursday
– claimed credit for coalition plans to raise the personal income tax allowanceto £10,800 next year, more than previously expected.In his final set-piece pitch to voters before May’s election, Mr Osborneannounced that if the Conservatives win power the first £1,000 of savingsinterest would be tax free – meaning 95% of savers would pay no tax.He also said savings put aside for a deposit by first-time buyers would betopped up by the government – to the tune of £50 for every £200 saved – in amove that will come into force this Autumn. The new Help to Buy ISAaccounts will be made available through banks and building societies.
Other measures include:
Relaxing pension rules from April 2016 to allow up to five million existing pensioners
to swap their fixed annual payments for cash
Annual tax returns to be scrapped and replaced with “digital tax accounts”
A fresh crackdown on tax avoidance and evasion, which he said would raise £3.1bn
Raising the rate of the bank levy to 0.21% to bring in an additional £900m a year
A further boost for regional growth, including extending enterprise and housing
zones – and plans for a tidal lagoon to generate green electricity in Swansea Bay.
Severn Crossing toll rates will be reduced from 2018
£1.3bn in tax cuts for North Sea oil exploration and continued production in older
The price of 20 cigarettes will go up by 16p as part of a the long-standing formula
that the price rises by 2% above inflation but there will be no change to that formula
Mr Osborne hailed slightly better than expected growth figures, which suggestthe economy will expand by 2.5% this year, rather than 2.4% and described his economic package as a “Budget for Britain – a comeback country”.
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He said the government had met its 2010 target to end this Parliament withBritain’s national debt falling as a share of GDP, meaning the “the hard work
and sacrifice of the British people has paid off”. Setting out his plans in the Commons, Mr Osborne said: “We took difficult
decisions in the teeth of opposition and it worked. Britain is walking tall again.”Five years ago, our economy had suffered a collapse greater than almost any
country. “Today, I can confirm: in the last year we have grown faster than any other
major advanced economy in the world.”He said he would use a boost in the public finances caused by lower inflation
and welfare payments to pay off some of the national debt and end the
squeeze on public spending a year earlier than planned.
In 2019/20 spending will grow in line with the growth of the economy – bringing
state spending as a share of national income to the same level as in 2000, the
chancellor told MPs. The BBC’s Robert Peston said this was a move aimed at neutralising Labour’s claim that the Conservatives would cut spending to 1930s levels.
But Shadow Chancellor Ed Balls said the Treasury’s own figures showed spending at the “lowest level since 1938” in 2018/19 and said he would
continue to use this line of attack. Mr Osborne insisted that deficit reduction remained his top priority but also
unveiled measures aimed at increasing the amount people can earn beforepaying tax to £10,800 next year and an above inflation rise to £43,300 by
2017 for the amount people can earn before having to pay the 40p tax rate.
Some of the plans in Mr Osborne’s statement are likely to depend on aConservative victory on 7 May. Whoever wins the election is likely to set out
another Budget later this year.
Labour leader Ed Miliband claimed the Conservatives had a “secret plan” to
cut the NHS because they would not be able to deliver their planned “colossal
cuts” to other areas of public spending and they would also be forced to
increase VAT. He said Labour would reverse the tax cuts for millionaires and introduce a
mansion tax to fund the NHS.
He also pledged to abolish the “vindictive and unfair” housing benefit changes he calls the “bedroom tax”. The SNP said Mr Osborne had “blown his last chance” to deliver for Scotland.
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SNP deputy leader and Treasury spokesman Stewart Hosie said: “Today George Osborne could have delivered a Budget focused on delivering
economic growth by tackling inequality.
“He has not – he has decided to continue with his utterly failed austerity
UKIP Leader Nigel Farage said: “Mr Osborne talks about a long-term economic plan, today he pushed all his targets back and created a long grass
economic plan.” Green Party leader Natalie Bennett said the chancellor’s “triumphalist tone”
would “leave a bad taste in the mouth” of people on zero hours contracts or
struggling to put food on the table.
Plaid Cymru Treasury spokesman Jonathan Edwards said: “This was a ‘jam tomorrow’ Budget from a chancellor who is busy sharpening the axe ready for
the next Parliament.” Mr Osborne’s sixth Budget statement came against a backdrop of a
strengthening economic recovery, a fresh fall in unemployment and a rosier picture expected as a result of falling oil prices dragging down inflation.
In was, in parts, an openly electioneering Budget, with Mr Osborne saying:
“The critical choice facing the country now is this: do we return to the chaos of
the past? Or do we say to the British people, let’s work through the plan that is
delivering for you?”
The Budget was largely welcomed by business leaders with CBI Director
General John Cridland saying it would provide the “stability and consistency”
needed to boost growth. The trade unions were less impressed, with the TUC General Secretary
Frances O’Grady saying: “He did not spell out where, if re-elected, he will
make the huge spending cuts he plans for the next Parliament, nor did he tell Britain’s low paid workers which of their benefits he will cut.”
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