Budget: 2013 Growth Forecast Is Cut In Half
George Osborne has unveiled tax breaks for beer drinkers, drivers and first time buyers as he admitted the economy is still struggling.
The Chancellor's Budget contained a string of moves designed to ease the cost-of-living, including a 1p cut in the price of beer and the cancellation of a planned fuel duty hike.
A £130bn mortgage guarantee scheme will help people without big deposits buy homes, with interest-free loans worth 20% of the value of a new build property also available.
And in what he called a Budget for "the aspiration nation", Mr Osborne said the income tax threshold will rise to £10,000 in 2014, a year earlier than planned.
The Chancellor also gave small businesses a boost by unveiling a new employment allowance which will save employers £2,000 on their National Insurance bills.
But he was forced to admit that the recovery was taking far longer than expected as he confirmed growth forecasts for this year have been cut in half to just 0.6%.
The independent Office for Budget Responsibility does expect Britain to avoid a triple-dip recession but public borrowing will be higher because of the floundering recovery.
It is now forecast to hit £114bn this year instead of £108bn before eventually falling to £42bn in 2017/18.
Driving home the problems facing Britain, figures released hours before the Budget showed the first rise in unemployment for a year - up 7,000 to 2.52m.
But despite growing calls to change course from his austerity regime, Mr Osborne insisted there could be no turning back.
"It is taking longer than anyone hoped but we must hold to the right track," he said.
Labour leader Ed Miliband claimed: "All he offers is more of the same - higher borrowing and lower growth - a more of the same Budget from a downgraded Chancellor.
"He is the wrong man in the wrong place at the worst possible time for the country."
But Mr Osborne declared: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation. It is a Budget for a Britain that wants to be prosperous, solvent and free."
He fleshed out plans for a further £2.5bn in Whitehall cuts over the next two years to fund capital spending projects.
And he confirmed plans to help working parents with tax-free childcare support and to introduce a flat rate pension by 2016.
The Capital Gains Tax holiday will also be extended and corporation tax cut further by 1% to 20% in April 2015.
But there will be anger at the extension of the 1% public sector pay cap to 2015/16, which came as civil servants staged a 24-hour strike.
There will also be further cuts in the spending review for 2015/16, up from £10bn to £11.5bn.
And the Chancellor announced that the Bank of England's remit was being overhauled but that it will keep its inflation target of 2%.
The House of Commons was extremely rowdy as Mr Osborne delivered one of the most important speeches of his career.
Shadow chancellor Ed Balls was singled out by the deputy speaker for barracking from Labour's front bench.
The Office for Budget Responsibility (OBR) now predicts growth of 2.3% for 2015, 2.7% in 2016 and 2.8% in 2017.
This means the Chancellor is now set to borrow £55.7bn more over the next five years than he was planning as little ago as in December.
Figures do show that the deficit has fallen from 11.2% of GDP in 2009/10 to 7.4% this year and is set to continue dropping until it reaches 2.2% in 2017/18.
But the OBR confirms Mr Osborne will miss his target for total public sector debt to start falling as a percentage of national income by 2015/16.
It now forecasts this will rise to a peak of 85.6% of GDP or a staggering £1.58tn in 2016/17 - an increase of 6.4% on its previous figures.
There was consternation as the speech began when the London Evening Standard newspaper posted its front page, complete with full details of the Budget, on Twitter.
The paper suspended the person behind the tweet and launched an investigation as it issued a fulsome apology for breaking the embargo.
Editor Sarah Sands said: "We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."
John Longworth, director general of the British Chambers of Commerce, criticised Mr Osborne for not going far enough to support business and boost growth.
"We are at an unprecedented moment in economic history, and the Government should be doing everything in its power to get the economy moving", he said.
But Simon Walker, director general of the Institute of Directors, said: "We applaud this Budget. The Chancellor has stuck to his guns and held his nerve - which is exactly what we wanted to see.
"Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it."
what do you think?
Yep, your austerity plans are right. Even if you bankrupt the nation proving your point.
Austerity? I think he means poverty.
Most of the suff Osbourne is bragging about wil never happen because he has scneduled it for 2015 when the Coalition will not even be in power! This is another Budget like the last one - a non-Budget. It will not turn this country around and is a total failure.
They keep promising everything for 2015 hoping that we'll be daft enough to let them back in
Agreed its all talk no action, we need help and growth now not in 2015 no wonder there plan is failing
Having just watched Balls, blustering, lying and failing to answer a single question and then hearing Milliband talking complete b****cks and haved failed to indicate a single Labour policy since he became head of party, I think we are in far safer hands with this shower.
Are you mad??? None of them are fit to run the country! And none of them have a clue how to
For pity sake - can no one come up with an original idea instead?
Nice one Sunshine, haven't had a good laugh for a while. You're talking complete BS of course.
well despite the gloom and doom I think this is a sensible budget. Help for small business and working famillies. Yes of course we have to pay off our debts and times will be tough,but this shows we are on the right track. Well done George!
Our debts? Did you put us in this mess? No, and neither did I. But we are the ones who have to suffer to pay for the foolishness and stupidity of our politicians and bankers. How are we supposed to breath life into a dying economy while our leaders have their hands round our throats and are throttling us to death? We can't and that is why we are not getting out of this depression anytime soon.
It doesn't offer nothing! A penny off a pint of beer? WOW that will help with everything else thats on the rise in price. Everything else is after there term, we need actions now not 3 years down the line
Triple dip recession, with ZERO sign of improvement. Every target has been missed, and all growth targets get cut to lower levels. You call that success?
Completely agree with you Brian, i was born in the mid 70's so was growing up during this supposed spending spree we are all now paying for and am sick of scrapeing every month to pay the bills, let alone buy food for my family.
Whatever thumbs-down left-wing response you got for this Geoffrey, you are absolutely correct. Brian Holmes's dismissal and ridicule of 'our debts' sums up the blinkered socialist views that are so prevalent on here.
I agree with you Geoff, this goverment took over a near bankrupt country from one of the most incompetent bunch of a**holes ever to blunder in Whitehall. This goverment cannot please every one, those who have been weened on benifits will not like the goverments planned path, but anyone with an ounch of common sense can surely see there are little alternative options.
Hasnt this government borrowed nearly as much as labour has? And what have we got as a country to show from it?? There as incompetent as each other!
Time to vote another party in then, labour, libs and tories can take a run and jump, can't trust any of them but I bet 75% of the people on here will still vote the same old s**t in again and 6 months later they'll still be moaning, its time for a change people and give another party a go.
Well said Derek, a voice of reason for a change.
Mark J Smith
What a load of absolute rubbish, this Eton school boy who has not worked a day in his life is one of the most incompetent chancellors in the history of this country! This fool has had 3 years of trying to fix things and all's he does with not one of his targets have Been met is blame the last government!!
Labour tax and spend. The Conservatives tax and cut. Oh what wonderful messes we vote ourselves into.
Limited ideas = limited growth
This is the Budget Osbourne was saving for the Budget just before the next Election Why has he done it early pure and simple" PANICK" He as put this country in a right mess ( blaming everybody but himself) with no sign of recovery This Budget will make the matters worse were his Osbourne going to get the money for this rise in personal allowance or the drop in beer prices or the the loss of income from fuel duty. Unemployment as started to rise again so as inflation. Osbourne ( if still in the job) will come back next year and the country will be in a worse state. Then who will he blame
Blame the people who's fault it all is....Labour. Unless you forget(or choose not to remember),they spent all of our money....ALL OF IT... and even left a nice "cheeky" little note to boast about it ,knowing what a mess they had left for the Coalition to try and clear up. If you want somebody to blame for the mess we are in then their are your culprits Alf.
??????WAIT HOLD THE BUS I HAVE HAD A VISION.....how to save billions...stop letting people into the country and giving them free money....tell them to go jump...TO EASY FOR THE GOVERMENT...
Season ticket tax free loan increased to £10,000-that tells us that the government are in bed with the rail companies. Come Jan 2014 wait til we all see the fare hike again.
They say 2.52m people are out of work but how many of them are from the uk. Labour made me laugh when they were in power they said British jobs for British workers when I got made redundant in 2009 I went to work at TNT for 11 months and 60 to 70% of the workers there wasn't from the uk. 14 years ago I first went aboard and thought it was nice hearing different people talking different language now I just have to walk round the corner.
These guys don't know what they are doing. THAT much has been made abundantly clear. Get them out.!
They need to shut the boarders and let no one else in till we are out of debt and stop paying aid to foreign countries, especially those who really don't need it (ie) lndia - if they can afford nucular weapons then their government can afford to help their people. They've already told us in a past news story they don't need or want the millions we send them, but we still send it ( till 2014/2015 when we've agreed to stop ) Seems like common sense to me, stop spending what we as a country don't have.
Will we all be rich when we send back all the immigrants . GROW UP.
A totally fair point Eastonandrea, i am not anti immigration(i am a product of it myself) but the fact is that we are full up. Our whole infrastructure cannot cope with the people that are already here and every single problem that we have is due to overpopulation. The borders should be shut for the foreseeable future apart from taking in people that have skills that we genuinely need,not low and unskilled workers that are doing the jobs the people already here and out of work should be doing rather than claiming benefit.
Misery for the poor /working people/pensioners/young families/.Happy time for the BANKERS /TOP EARNERS/ SECOND HOME BUYERS /George Osborne .We are all fools and they are laughing at us because we do nothing.