13:28pm Osborne ends: “this is a Budget for the makers, the doers and the savers”. More coverage on The Staggers shortly.
13:26pm Osborne produces his Budget rabbit: he is abolishing the 10p tax rate for savings. He takes a swipe at Labour: “when I abolish a 10p rate I don’t secretly turn it into a 20p rate”.
13:24pm There will be a new guarantee that all those who retire on defined contribution schemes will be given face-to-face advice on how to maximise their savings – Osborne calls it “Right To Advice”.
13:22pm Osborne announces a new pensioner bond (paying 2.8% for one year and 4% for two years) – to support those who have paid the price for low interest rates.
The cap on premium bonds will be lifted from £30,000 to £40,000 this June and to £50,000 next year.
13:20pm Here comes the Budget rabbit – and it’s for savers.
Osborne announces that cash and stock ISAs will be merged to create a single new ISA, with the annual limit increased to £15,000.
13:18pm Osborne announces a rise in the personal allowance from £10,000 to £10,500 – lower than some expected.
13:17pm He announces a “penny off a pint for the second year running”. Presumably so the poor can drink away their sorrows.
13:15pm Osborne namechecks Robert Halfon, the MP for Harlow, as he announces that he will meet his demand for a cut in bingo duty – and halve it to 10 per cent.
13:14pm The fuel duty rise due in September has been cancelled. Petrol is 20p cheaper per litre than it would have been under Labour’s plans, Osborne adds.
13:13pm Osborne moves on to tax. He wants to help – guess who? – “hardworking families”.
13:09pm The annual investment allowance will be doubled to £500,000 and extended until the end of 2015. This means almost every business will pay no upfront tax on investment, Osborne says.
13:08pm He confirms that corporation tax will fall to 20% next year, from a starting level of 28% in 2010, but, unlike in previous Budgets, doesn’t go any further.
13:06pm Osborne announces that in honour of Alan Turing, the government will found the Alan Turing Institute to lead research into “big data and algorithms”.
13:04pm He adds that the measures announced today will lead to 200,000 new homes. That might sound impressive, but we need 1.2 million over five years just to meet demand.
13:03pm Osborne claims that the extension of the Help To Buy scheme until 2020 will result in the construction of 120,000 new homes.
13:00pm The amount of finance available to exporters will be doubled to £3bn – Osborne is trying to show his commitment to a sustainable and balanced recovery.
12:53pm Osborne boasts that income inequality is “at its lowest level for 28 years”. But it’s important to note that it’s forecast to soar as average earnings recover and benefits are slashed (see below).
Owing to the coalition’s welfare cuts, many of which only took effect last year, inequality is forecast to significantly increase between now and 2015-16. In particular, the coalition’s Osborne’s decision to cap benefit increases at 1 per cent for at least three years (an unprecedented real-terms cut) means the poorest will see a sharp fall in their incomes. The IFS expects inequality “to rise again from 2011–12, almost (but not quite) reaching its pre-recession level by 2015–16.”
While the Tories can take little credit for the fall in inequality (which is largely due the decline in real earnings), they will deserve the blame for the rise.
12:51pm The new cap on total welfare spending will be set at £119bn this year, Osborne announces, and a parliamentary vote will be held next week. It will rise in line with inflation from then on to £127bn in 2018-19.
12:49pm Osborne confirms that a vote will be held on his new Charter for Budget Responsibility (to enshrine his pledge to achieve a surplus by the end of the next parliament) this autumn – his attempt to lay a deficit trap for Labour.
12:46pm He might have made those borrowing forecasts sound impressive, but don’t forget that the deficit was originally forecast to be £60bn this year, £46bn lower than the figure announced by Osborne.
12:41pm Osborne announces the OBR’s new deficit forecasts: £106bn (6.6%) this year, £95bn (5.5%) in 2014-15, £75bn (4.2%) in 2015-16, £44bn (2.4%) in 2016-17, £17bn (0.8%) in 2017-18, with a surplus of £5bn (-0.2%) in 2018-19.
He adds that his original pledge to reduce the national debt as a proportion of GDP by 2015-16 will still be missed by a year.
12:40pm A big boast from Osborne: the net growth in jobs has been three times faster than in any previous recovery. But the problem is how many of those are part-time.
12:37pm Osborne announces the OBR’s new growth forecasts: 2.7% this year (“the biggest upwards revision between Budgets for 30 years,” he boasts), 2.3% in 2015, 2.6% in 2016. 2.6% in 2017 and 2.5% in 2018.
12:34pm In the coming year, the deficit will be halved, says Osborne. The Darling plan, in other words.
12:33pm Osborne is up. “The economy is continuing to recover and recovering faster than forecast,” he begins.
12:19pm PMQs will be finishing shortly and we’ll have live coverage of the Budget from then.
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