Yesterday the news world was filled with the all the live action. Today, we take a look at the key announcements made by George Osborne in the 2014 Budget speech.
The UK economy is forecast to grow by 2.7% in 2014. This is a change from the forecast made by George Osborne in his 2013 autumn statement, which was 2.4%.
For 2015, the forecast is 2.3%. The economy is then forecast to grow by 2.6% in 2016 and 2017; and by 2.5% in 2018.
Government borrowing and debt
Borrowing is expected to be £108bn this year – £12 billion less than forecast a year ago.
The government is forecast to borrow £95bn in 2014-15, £75bn in 2015-16 and £44bn in 2016-17.
A surplus of £5bn is predicted for 2018-19.
The national debt is forecast to be 74.5% of GDP this year, then 77.3% next year, reaching a peak of 78.7% in 2015/16 and falling to 78.3%, 76.5% and 74.2% in following years.
Benefits and pensions
A “welfare cap” on the amount the government spends on benefits will be set at £119bn for 2015/16, rising to £127bn by 2018/19, with only the state pension and cyclical unemployment benefits excluded.
Taxes and allowances
The personal income tax allowance will rise to £10,500 from April 2015.
A married couples and civil partners tax break, which is set to cost about £700m a year, is proposed to start in April 2015, enabling people to transfer £1,000 of their income tax allowance to their partners.
The higher rate threshold for the 40p income tax rate will rise from £41,450 to £41,865 next month and then by a further 1% to £42,285 next year.
Cash and stocks ISA’s are to be merged into a single new ISA, with annual tax-free savings limit of £15,000 from 1 July. The limit for a Junior ISA will be raised to £4,000.
Jobs and training
The Office for Budget Responsibility forecasts 1.5m more jobs to be created over the next five years, and for earnings to grow faster than inflation this year and in every year of the forecast.
There will be no increase on fuel duty
The 2% increase in company car tax will be extended to 2017 and 2018, with increased discount for ultra-low emission vehicles.
George Osborne has already announced that the Help to Buy scheme is to be extended until 2020.
A total of £270m will be guaranteed for the Mersey Gateway bridge.
Legislation will give the Welsh government tax and borrowing powers to fund infrastructure needs, including improvements to M4 motorway.
An additional £140m will be made available for repairs and maintenance to flood defences, and an additional £200m will be made available for repairing potholes.
Air passenger duty will be reformed so all long haul flights carry the same tax rate as currently charged for flights to US.
The duty on fixed odds betting terminals will be increased to 25%, while the horse racing betting levy will be extended to offshore bookmakers and bingo duty halved to 10%.
Tobacco duty will continue to rise by 2% above inflation.
The alcohol duty escalator will be scrapped, meaning taxes will rise in line with inflation except for on whisky and other spirits, where it is frozen. The duty on ordinary cider is frozen, while beer duty is cut by 1p a pint.