This Budget rewards those who aspire to work hard and get on. It is for those who want to own a home, get their first job, start a business, or save for their retirement. It is a Budget for people who realise there are no easy answers. Our economic plan combines fiscal responsibility with monetary activism and supply side reform. It is taking longer than anyone hoped but we are on the right track.
- £10,000 personal allowance. This is a tax cut for 24 million people. Next April the personal allowance will reach £10,000. As a result families will pay £700 less in income tax than they did in 2010. And 2.7 million will have been take out of tax altogether.
- New £2000 Employment Allowance. We will cut the jobs tax of every business, charity and community amateur sports club by £2,000 from 2014. Businesses will be able to hire one extra person on £22,400 pa, or four people working full time on the minimum wage, without paying any National Insurance. And it means 450,000 small businesses, one third of all employers, will pay no jobs tax at all.
- Fuel duty frozen. We are cancelling the fuel duty rise planned for September. Pump prices will now be 13 pence per litre lower than under Labour’s plans. For a Vauxhall Astra or a Ford Focus that is £7 less every time you fill the tank. Fuel duty will have been frozen for nearly three and half years.
- Beer duty cut. Under Labour’s plans beer duty would have risen by 3p a pint this year. Instead after Sunday night we are not only cancelling the 3p rise, but also introducing a further 1 penny cut – saving drinkers 4 pence a pint compared to Labour’s plans.
- Help to Buy. We are allocating over £3.5 billion to support those who want to get on, or move up, the housing ladder. The Government will provide up to 20 per cent of the equity to help anyone who wants to buy a new built home. And for three years from January 2014 we will also provide a new guarantee to help lenders offer more people 80 to 95 per cent loan to value mortgages.
- 20p rate of Corporation Tax. We will cut corporation tax even further: to 20 per cent in April 2015. Under Labour corporate taxes were 28 per cent. Now we have the lowest rate in the G7, and next month it will fall further to 23 per cent. When it reaches 20 per cent in April 2015 we will have the lowest rate in the G20.
- Tax free childcare. From autumn 2015, the government will offer tax free childcare, meeting 20% of childcare costs for working families with children under 12. Once fully implemented it will be worth £1,200 per child, and so will save a typical working family with two children under 12 up to £2,400 a year. 2.5 million families will benefit.
- 1.25 million new private sector jobs. In the last year we’ve seen the fastest rate of private sector job creation since 2000. For every one job lost in the public sector last year, six jobs were created in the private sector.
- Deficit cut by a third. The deficit is falling this year, and every year of the forecast. It is falling more slowly than we had hoped, but thanks to the tough decisions this Government takes it is still coming down. We have now cut the deficit by a third. Borrowing is falling. Labour borrowed £159 billion in their last year in office. This year the government is forecast to borrow £114 billion and will borrow less in every future year of the forecast.
- Debt target met in 2017-18. The OBR have forecast that public sector net debt as a percentage of GDP will begin to fall in 2017-18, two years later than we had hoped. However we will stick to our plans for deficit reduction – as the IMF, OECD and Governor of the Bank of England all advise. We will ignore those who say we should borrow more to borrow less.
- Departmental spending cuts. We will cut current spending by £11.5 billion in 2015-16. Departmental spending plans will be published in June; however health, schools and aid will continue to be protected. We will use some of the extra savings from departments to boost capital spending on infrastructure by £3 billion pa from 2015-16.