Motorists and beer drinkers are among those set to benefit from Chancellor George Osborne’s new Budget which he says will support an ‘aspiration nation’ while continuing to cut the country’s deficit.
In his annual budget speech in the House of Commons, Mr Osborne reported that the UK’s deficit was down by a third when compared to GDP (Gross Domestic Product) and that 1.25 million extra jobs had been created since the 2010 General Election.
But he also painted a bleak picture for the economy, with official growth forecasts revealing that the economy would grow by just 0.6 per cent this year - down from the previous forecast of 1.2 per cent
Mr Osborne admitted the recovery was taking ‘longer than anyone hoped’.
He announced that fuel duty was being frozen for two years with September’s planned increase cancelled, costing the Government £6bn in revenues.
He told the Commons that petrol will be 13p a litre cheaper than if he had not frozen the duty over the last two years.
The annual beer duty escalator will be scrapped. A 3p rise in beer duty has been cancelled and beer duty will be cut by 1p on Sunday night.
Mr Osborne said the country had lost 10,000 pubs in UK in last decade and that he wanted to give them a helping hand.
The Chancellor unveiled a ‘dramatic’ new equity lending scheme to help people get onto the housing ladder, as well as to move up it.
He said £130bn of mortgages to be available from start of 2014 to help people move into 15,000 new affordable homes that they intend to build.
He brought forward a rise in the personal allowance to 2014, meaning no income tax is paid by anyone on the first £10,000 of their earnings.
He also announced a new employment allowance which will take the first £2,000 off employer National Insurance bills for every company in the country.
Public sector workers face a pay increase cap of one per cent for 2015/16.
“I know that is tough but it is fair,” he told the Commons, while exempting military personnel from the cap.
He announced tax free child care vouchers worth £1,200 per child and increased support for families with children on universal credit.
The flat rate pension worth £144 a week will be brought forward to 2016.
Mr Osborne also said Britain will have a 20 per cent rate of corporation tax - the lowest business tax of any major economy in the world.
Despite calls for international aid to be scrapped, Mr Osbone pledged that 0.7 per cent of national income would be spend on international aid, something he called a ‘historic achievement’.
Mr Osborne said it would not be fair to increase pay by more when few in the private sector are enjoying such a raise.
Mr Osborne said an annual £3billion increase in capital spending would be paid for by a ‘tighter squeeze’ on current spending.
“By using our extra savings from government departments, we will boost our infrastructure plans by £3bn a year from 2015-16,” he said.
“We make no excuses for rigorous financial management in Whitehall.”
“By investing in the economic arteries of this country we will get growth flowing to every part of it.”
He described the package as a ‘Budget for people who aspire to work hard and get on’. But he added: “Today, I’m going to level with people about the difficult economic circumstances we still face and the hard decisions required to deal with them.”
Labour leader Ed Miliband said: “This is the Chancellor’s fourth Budget but one thing unites them all - every Budget, he comes to this House and things are worse not better for this country.”