Chancellor George Osborne was on his feet for more than an hour in the Houses of Parliament presenting his post-election Summer Budget.
Table of contents
In the first Tory Budget in 18 years and unfettered by coalition partners, Osborne outlined the government’s economic and tax plans for the country for the next five years.
Here is a summary of the key points:
- GDP is expected grow in 2015 by 2.5%up on the 2.4% predicted in December and 2.1% predicted a year ago.
- The economy will continue to expand during the next three years by 2.3%
- Inflation will fall to 0.2% this year
The deficit and spending
- Debt as a percentage of GDP will decrease this year for the first time since 2001 to 80.4% in 2014-15 and 80.2% in 15-16. By 2019-20 it will have fallen to 71.6%.
- Public borrowing will fall from £91.3 billion to £90.2 billion in the current year, while the fall is expected to be from £75.9 billion to £73.5 billion.
- In 2019-20, the economy will show a surplus of £5.2 billion and £7 billion in 2019-20
- Spending cuts of £30 billion by 2017-18 come from £13 billion saved in Whitehall, £12 billion of welfare savings and £5 billion from raising extra cash from cracking down on tax avoidance
Savings and Pensions
- The pension lifetime allowance will be shaved from £1.25 million to £1 million, but will impact only 4% of retirement savers
- Basic rate taxpayers won’t pay any tax on the first £1,000 of savings interest, or £500 for higher rate taxpayers
- Personal tax free allowance rises to from £10,800 to £11,000 next year and £11,200 the year after.
- 40p rate starts at £43,300 in 2016-18 and goes up to £43,600 in 2017-18
- Corporation tax cut to 20% from next year and is scheduled to fall to 18% by 2020
- Extra investment of £750 million will go to HM Revenue & Customs (HMRC) to tackle tax avoidance
- Annual tax return abolished, with details uploaded automatically online
Duties on fuel, alcohol, tobacco and gaming
- Fuel duty planned increase cancelled
- Penny cut off the price of a pint, cider duty down 2%, whisky and spirits by 2%, wine duty frozen
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