The Chancellor delivered the Budget to the House of Commons on Wednesday.
Watch his opening remarks:
Some of the key points:
- George Osborne reports the deficit has fallen by a third (from 11.2% in 2009-2010 to a forecasted 7.9% for this year)
- Borrowing is also down, says the chancellor. Mr Osborne said borrowing has decreased by £49bn since the Tory Government came to power, but forecasts for the percentage of public debt as a proportion of GDP have gone up (the number is not expected to fall until 2017-2018 instead of 20116-2017 as previously predicted)
- Growth is predicted to be 0.6% this year, half the Osborne's last economic growth forecast. But he denied there would be a triple-dip recession.
- The Bank of England will maintain its inflation target of 2%
- Mr Osborne announced the corporate tax rate will drop 1% to 20% in April 2015. The capital gains tax holiday will get an extension
- The chancellor also announced a new 'help to buy' scheme for home buyers trying to find mortgage deposits: buyers will have access to £3.5bn in shared equity and a government interest-free loan worth 20% of a newly-built home
- There will be an Employment Allowance of £2,000 a year towards employers' National Insurance contributions
- The public sector pay cap will stay at 1% for an extra year, until 2015-2016
- The personal tax allowance will rise to £10,000 from 2014
- The beer duty will be cut by 1p a pint and the planned September fuel duty increase will be scrapped
Ed Miliband hit back in his response by saying that things are "worse, not better." He pushed the chancellor to admit that it was time to change course.
The shadow chancellor, Ed Balls, acknowledged there were some "good things" in Mr Osborne's Budget, but also said that "the plan's not working" and that it is time for Mr Osborne to make a "U-turn" on the economy. He also specifically criticised the 'help to buy' scheme, characterising it as a "spare homes subsidy", which will be used to help high-earners buy second homes.
Watch Mr Balls give his take on the Budget to BBC Breakfast:
Meanwhile, Mr Osborne's Budget has also received criticism from the independent Institute for Fiscal Studies. IFS Director Paul Johnson argued that the political optics of this year's borrowing figures have prevented officials from delivering an "economically optimal" allocation of spending for the years to come.
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