• Top rate of tax cut to 45p from April next year
• Child benefit cut-off point rises to £50K
• Are personal allowances changes a ‘granny tax’?
Read Gary Gibbon’s blog: 50p tax – hero to zero?
13.47: Ed Miliband compares the government to Downton Abbey, a story of the “out of touch rich”. He said: “We all know it’s a costume drama, they think it’s a fly-on-the-wall documentary.” Miliband concludes: “An unfair budget built on economic failure, an unfair budget from the same old Tories.”
13.42: Miliband: We needed a plan for growth that would work… but on growth, on jobs, on how we pay our way in the world, this chancellor has failed.
13.38: Labour leader Ed Miliband responds to the budget statement, launching an attack on Osborne’s plan to reduce the 50p tax rate to 45p for the UK’s richest people. He brands it a “millionaire’s budget that squeezes the middle”.
Bob Rothenberg: The whole package seems a good conjuring trick. It will be interesting to see whether it really is as positive as presented. After all, he started by saying it was fiscally neutral. So overall, as there appear to be so many winners, the losers must be paying a lot. Time will tell.
13.30: Osborne ends his statement saying: “This country borrowed it’s way into trouble, now we’re going to earn our way out.”
13.27: Tax-free personal allowance to rise by £1,100 from April 2013 to £9,205, making 24 million people £220 a year better off.
Bob Rothenberg: Whilst the increase in personal allowance to £9,205 was expected, perhaps some of those who received age relief allowances as well will be disappointed that their extra allowances have been frozen in cash terms. Overall, however, it goes a long way to taking more people out of the tax net – which can only benefit not just them but the costs of running the system as well.
13.26: An additional 750,000 families will keep some or all of their child benefit – benefit will only be withdrawn when someone in the household has an income of £50,000 – and the withdrawal will be gradual. Only those earning £60,000 or more will lose all of it. “Proving eligibility, or a claim for child benefit, where earnings fluctuate above £50,000 will be a chore for many and may cost more to administer than it is worth,” Frank Nash, a senior tax partner at Blick Rothenberg, told Channel 4 News.
Bob Rothenberg: It will be interesting to see the detail of how the £5bn that is coming from the highest taxpayers has been calculated. The new provision of only allowing reliefs of 25 per cent of income must have some devil in the details.
13.22: George Osborne sets out the much-vaunted scrapping of the 50p tax rate. He says: “This tax rate is the highest in the G20… I’ve always said it was temporary… A 50p tax rate, with all the damage it does to Britain’s competitiveness, can only be justified if it raises significant sums of money.
“The 50p tax rate has caused massive distortions. From April next year the top rate of tax will be 45p. No chancellor can justify a tax rate that damages our economy and raises next to nothing. It is as simple as that.”
Bob Rothenberg: The stamp duty provisions for overseas-owned properties is even more aggressive than trailed. It will stop the use of overseas companies owning properties in London unless there are provisions in the details which make this acceptable.
13.18: Stamp duty on residential properties over £2m which are bought via a company will increase to 15 per cent, taking effect from today to close the loophole. Mr Osborne said: I am increasing the stamp duty land tax charged applied to residential properties over £2m… the charge will be 15 per cent and it will take effect today.”
13.15: Osborne: I regard tax evasion and tax avoidance as morally repugnant.
13.12: Osborne: This government has eased the burden on motorists by £4.5bn at a time when money is very short. I do not propose to make any further changes.
13.11: Duty on all tobacco products to rise by 5 per cent above inflation from 6pm tonight – the equivalent of 37p on a packet of cigarettes. No change to duty rates on alcohol.
13.10: Bob Rothenberg: The annual statement that each taxpayer is going to be sent, whilst perhaps being more open than expected, may well lead to individual taxpayers saying they don’t want to contribute to a particular expenditure. Is this really a good idea?
Budget 2012: Personal tax statement to be sent to 20 million people from 2014
Bob Rothenberg: The proposed reduction in corporation tax rate to 22 per cent by 2014 is really something to shout about. It will continue to attract foreign businesses to do business here.
13.09: Immediate 1 per cent cut in the headline rate of corporation tax, which will bring it to 24 per cent from April. Two further cuts in 2013 and 2014 will reduce corporation tax to 22 per cent.
13.07: Osborne reveals the much-previewed plans to send a personal tax statement to 20 million tax-payers, starting in 2014.
Political Editor Gary Gibbon: George Osborne just announced a “tax simplification” measure for pensioners’ tax allowances. Count your spoons time! Harmonising allowances for over 65s with everyone else’s allowances will mean the over 65s get less tax free over the years. We’ll find out how much in a moment when we get the Red Book. George Osborne says pensioners don’t lose out but that may be taking all government policy – the triple lock on pensions – into account.
13.05: Osborne on pensions: “People will know what they’re paying and what they’re paying it for – a tax system that is simple and transparent”. He says age-related allowances for pensioners will be simplified over time, starting in April 2013, creating a single personal allowance for all but ensuring no pensioner loses in cash terms.
13.02: The government is publishing independent review on local pay rates for public sector, with some departments given the option to move to local pay for civil servants whose freeze ends this year.
13.00: Osborne tells the Commons that Sunday trading laws to be relaxed for eight weeks around Olympics, starting on 22 July.
12.55: Osborne wants to “keep Wallace & Gromit where they are” with pledges to boost the UK’s TV and film industry. He announces a tax credit is to be introduced for video games, animation and high end TV industries. Osborne also announces funding for ultra-fast broadband and wi-fi in ten of the UK largest cities.
More from Channel 4 News: Game over for high street computer store?
Bob Rothenberg: Osborne announces the national infrastructure plan, funded by anyone willing to contribute, funded by sovereign wealth funds, UK and overseas pension funds and, indeed, Uk wealthy individuals. How this will work out in practice remains to be seen.
12.52: Osborne sets out a raft of plans for Uk transport investment. Network Rail is to extend the electrification of Trans-Pennine route. And he says the UK must “confront” the lack of airport capacity in the south east, with an announcement due later this summer.
12.50: Our analyst Bob Rothenberg: Despite the jibes about the gold holdings having been reduced by Gordon Brown, the plan to look at financing government debt over a period of more than 50 years is a real testament to the success of the deficit reduction programme and the confidence the rest of the world have in it.
12.47: Osborne announces an extra £100m of improvements to armed forces accommodation, funded by £2.4bn savings from ending combat operations in Afghanistan.
12.40: Osborne said the OBR expects UK plc “to avoid a technical recession with positive growth in the first quarter” of this year. He said the OBR had reported that the economy has “carried a little more momentum into the new year than previously anticipated”.
12.36: Osborne states that the Office for Budget Responsibility forecast for UK growth is 0.8 per cent in 2012, 2 per cent in 2013, 2.7 per cent in 2014 and 3 per cent in both 2015 and 2016.
12.33: Osborne: We will support working families and those looking for work and “unashamedly back business”. He promises a “simpler tax system” that is competitive for business, lifts millions of low paid out of tax and increases revenue from the wealthiest.
12.30: George Osborne steps up to deliver this year’s budget, saying it will “reaffirm his commitment to deal with Britain’s debt”.
12.28: Bob Rothenberg: With the expected increase in the personal allowance is the expectation of a reduction at the level at which the higher rate band of 40 per cent would start. This 40 per cent rate is now moving ever closer to the average household income and is likely to be no more than 25 per cent over this. This appears to squeeze the middle even more.
12.25: Budget predictions from Blick Rothenberg:
• Personal tax-free allowance increased to £9,150 but possibly deferred until April 2013
• Possible further increased announced to £10,000 from April 2014
• Higher rate tax relief on pension contributions to be abolished and replaced with flat-rate pension tax credit of 30 per cent for all.
• Top rate of income tax cut from 50 per cent to 45 per cent (possibly deferred until April 2013)
Rowena Crawford, a research economist at the IFS: “A month ago official figures suggested that tax revenues were growing less quickly than had been forecast by the OBR for the year as a whole but this was more than offset by lower-than-forecast growth in spending. However, today’s figures show that in February there was a fall in receipts of taxes on incomes, and a sharp rise in spending on welfare benefits and central government spending on the administration and delivery of public services, relative to the same month last year. This has weakened the picture for the year but leaves borrowing over the first eleven months of 2011−12 running in line with the OBR’s November forecast for the year as a whole of £127 billion, rather than below as it appeared to be a month ago.”
12.20: The 50p tax debate looks set to dominate the budget, read Jon Snow‘s blog here: A child’s eye view of the 50p tax
12.10: Green Party leader Caroline Lucas has joined UK Uncut’s noisy “dole queue” protest against unemployment outside Downing Street.
12.00: Prime Minister’s Questions gets under way/ George Osborne looks nervous.
How can George Osborne’s budget help generate jobs? Three of our C4 Jobs Ambassadors put forward their ideas.
Mark Hamilton, G4S: “I would like to see the chancellor be bold in his attempts to encourage business to reinvest more by cutting the Employers National Insurance contribution and provide more incentives that will particularly get young people into work such as providing funding for apprenticeships and training. Mr Osborne should avoid anything that directly impacts on improving domestic job creation rather than introducing initiatives that result in increased imports that do little for real growth here in the UK.”
Justin King, Sainsbury’s: “We are looking for consistency and evidence of long term investment from the budget. We are hoping for no surprises or anything that would add any complexity to our ability to run our business.”
Dan Crow, Songkick: “Defer employers’ National Insurance contributions for the first three years of a company’s life. This encourages new companies to take on more employees during the critical early years. Successful companies pay their fair share of NI once they are established, and because they are bigger this should cover any shortfall in NI contributions from the companies that don’t make it. This encourages new companies to form and grow while protecting revenues.”
Welcome to the #c4news budget live blog. Here is Chancellor George Osborne’s statement as it happened, plus tweets and analysis from Economics Editor Faisal Islam and Business Correspondent Sarah Smith. We were joined on the live blog by Bob Rothenberg senior partner at chartered accountants Blick Rothenberg. Follow us on Twitter @Channel4News, @C4Politics, @FactCheck, @faisalislam & @sarahsmithC4. You can also join the conversation at Facebook.com/Channel4News