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The key announcements made by George Osborne in the 2014 Budget speech.

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.

Economic growth

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.

Transport

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.

Housing

George Osborne has already announced that the Help to Buy scheme is to be extended until 2020.

Infrastructure

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.

Duties

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.

March Budget – Looking back at the Autumn Statement

As we fast approach Budget day on March 19, will we be in a stronger financial position than we were in 2013?

Let’s take a look into Chancellor George Osborne’s Autumn statement . The Key Points are outlined below.

 

March budget – Looking back at the Autumn Statement

 

PENSIONS

People in their 40s get state pension at – 68
People in 30s at –
69

GROWTH

2013: 1.4%(up from 0.6%)
2014:
2.4%

CUTS

Extra £1bn from government departments each year until 2017

BORROWING

2014-15: £96bn, 2015-16: £79bn, 2018-19: £2bn surplus

 

Economic Growth – BORROWING

Growth forecast for this year increased from 0.6% to 1.4%

 

Benefits & Pensions –

The state pension age is to increase to 68 in the mid-2030s and to 69 in the late 2040s. In April 2014, the state pension will rise by £2.95 a week.

 

Overall welfare spending is to be capped.

 

Anyone aged 18 to 21 claiming benefits without basic English or Maths will be required to undertake training from day one or lose their entitlement. People unemployed for more than six months to be forced to start a traineeship, take work experience or do a community work placement or lose benefits.

 

Taxes & Allowances –  

From April 2015, capital gains tax will be imposed on future gains made by non-residents who sell residential property in the UK.

From 1 January 2014, the rate of the bank levy will rise to 0.156%, and is estimated to raise £2.7bn in 2014-15 and £2.9bn each year from 2015-16.

Employer National Insurance contributions are to be scrapped on 1.5 million jobs for young people.

Stamp duty on shares purchased in exchange traded funds is to be abolished.

The personal income tax allowance will rise to £10,000 from April 2014, and then increase from 2015-16 by the Consumer Prices Index (CPI) measure of inflation.

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.

Business rates in England to be capped at 2% rather than linked to RPI inflation, with some retail premises in England to get a discount. Businesses moving into vacant high-street properties will have their rates cut by 50%.

From April, a new tax relief is to be introduced for investment in social enterprises and new social impact bonds.

 

Jobs & Training –  

The number of people claiming unemployment benefits is down 200,000, with unemployment now forecast to fall from 7.6% this year to 7% in 2015. Unemployment is then expected to fall further to 5.6% by 2018.

Total number of jobs to rise by 400,000 this year and 3.1 million jobs predicted to be created by 2019.

A boost in the government’s start-up loans scheme will aim to help 50,000 more people start their own businesses.

Export finance capacity available to support British businesses will be doubled to £50bn.

 

Transport –  

Petrol taxes stay frozen – a planned rise of 2p per litre for next year is to be scrapped.

Regulated train fares will rise in line with inflation, not at 1% above RPI as planned.

The tax disc to show motorists have paid vehicle excise duty is to be replaced with an electronic system.

 

Education & Families –  

An extra 30,000 places at English universities will be created in 2014-15. The following year, the current cap on student numbers will be abolished entirely.

Science, technology and engineering courses will receive increased funding, and a new science centre in Edinburgh University is to be named after Prof Peter Higgs, the discoverer of the Higgs boson particle.

The proportion of young people from disadvantaged backgrounds applying to university is up.

An additional 20,000 apprenticeships are to be funded over the next two years.

All pupils at state schools in England in Reception, Year 1 and Year 2 are to get free school lunches from next September, at an estimated cost of £600m a year.

 

Housing – 

The government hopes £1bn in loans will boost housing developments in Manchester and Leeds, among other sites.

The housing revenue account’s borrowing limit is to rise by £300m.

Councils are to sell off the most expensive social housing and rundown urban housing estates to be regenerated, and workers who live in council houses are to be given priority on housing lists if they need to move home to find a job.

 

 

Infrastructure – 

Tax allowances aiming to encourage investment in shale gas to cut tax on early profits by 50%.

More investment in “quantum technology”, which involves attempting to apply the strange behaviour of materials on a tiny scale to practical purposes, is promised.

 

Overseas Aid – 

The government’s pledge to spend 0.7% of gross national income on international development is to be met without an increase to the current aid budget.