George Osborne will deliver his first Budget today, with the toughest package of tax rises and spending cuts for a generation expected to be unveiled.
The Chancellor will justify the measures as necessary to tackle Britain's £155bn Budget deficit and will attempt to soften the blow by taking 900,000 low earners out of the tax system. Osborne is expected to raise the rate at which people start paying income tax by £1,000 to £7,475 and will announce a range of tax increases on high earners including a rise in capital gains tax and a levy on bank profits.
But Labour has warned that spending cuts and a possible rise in VAT will hit the poor hardest. A Labour Party spokesperson said: "The real test for the Budget is what it means for jobs and growth. Of course no-one's going to object to an increased personal allowance.
"But if it's paid for by a VAT rise the Tories said they wouldn't implement, and that the Liberals campaigned against, the public will rightly feel short changed."
Osborne will deliver his speech in the House of Commons at 12:30pm, fulfilling the Conservatives' pre-election pledge to hold a Budget within 50 days of coming to power.
