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Budget 2010: everything you need to know

Live: all the measures as they are announced.

Fiscal mandate

The checks and balances will be forward-looking rather than backward-looking, and the new Office of Budget Responsibility will regulate rules about saving surplus, rather than the Chancellor.

A new fixed target for debt: it must be falling as a percentage of GDP by 2015/16. Osborne reports that so far we are on track to meet this a year early.

Spending cuts

On deficit reduction: new rule of thumb to be 80 per cent through lower spending and 20 per cent through tax rises. In actual fact, Osborne sets it at 77 per cent of spending cuts, with 23 per cent of tax rises.

The Euro

The UK will not be joining the Euro this Parliament. The Euro Preparations Unit abolished.

Sale of assets

High speed 1, Student loans book and the National Air Traffic Services (NATS) will be sold into private ownership.

Civil List

The Civil List, which supports the Queen, will remain the same, and will be subject to the same auditing procedure as other public accounts.

Departmental budgets

£17bn in decreases for unprotected departmental budgets - an average cut of 25 per cent. Foreign aid and the NHS will be protected. Final details will be settled by the Autumn Spending Review, to be presented on Wednesday 20 October.

Public Sector pay

A two year pay freeze for public sector workers, with protection for the 1.7m workers who earn less than £21,000 a year.


John Hutton will investigate public sector pensions, to report in September. Evidence for an increase in the retirement age to 66 and the abolishment of compulsory retirement will be sought.

The welfare bill

Benefits, tax credits and pensions will be uprated with consumer prices, saving £6bn a year by the end of the Parliament.

Tax credits will be target on lower-income families. Families earning over £40,000 will have tax credits cut.

Health and pregnancy grant abolished.

Sure Start grant restricted only to first child.

Child benefit

Will be frozen for the next three years.

Disablity benefit

Medical reviews will be implemented, rather than self-assement forms.

Housing benefit

Local housing allowances will be reset and restricted, and maximum limits on weekly benefit will be implemented. This reduces housing benefit costs by £1.7bn by the end of the Parliament.

Discretionary payments will be increased.

A grant for an additional room for disabled people will be available so as to accommodate a carer.

Business taxation

Corporation tax cut by 1% each year for four years to 24p in the pound - the lowest rate this country has ever had.

Small companies tax rate will be cut to 20%.

No tax relief for video games industry.

Investment allowance reduced to £25,000 a year to encourage small businesses.

Banking tax

From Jan 2011, there will be a bank levy for UK banks and UK bank operations abroad. The levy is expected to generate £2bn a year.

Regional economies

There will be a White Paper on regional employment disparity

There will be a spending commitment to regional infrastructure projects such as the Tyne and Wear metro and the redevelopment of Birmingham New Street station

Regional Growth Fund for regional projects

New tax scheme for regions with weak private sector

Deficit reduction

Main rate of VAT rises from 17.5% to 20% from January 4th of 2011, providing £13 billion extra revenue.


No rises in taxes on alcohol, tobacco or fuel

Reverse 10% increase on cider duty

Council Tax

Help to local authorities to freeze council tax, making average family £35 better off

Capital Gains

Low and middle income rate payers continue to pay 18%

Higher rate payers will pay 28% as of midnight tonight.

The 10% rate for entrepeneurs will be extended from first £2 million to first £5 million of lifetime gains

Income Tax

There will be an increase in tax-free allowance from £6475 to £7475. 880,000 of those on the lowest incomes will be taken out of income tax altogether. The higher rate threshold will be frozen until 2013/14.


The link between state pensions and earnings will be restored from April of next year.

There will also be a new 'triple lock' guarantee to see a rise in the basic state pensions for the next three years in lines with prices.

Child tax credit

£150 increase in child element of child tax credit. A £2 billion commitment to the poorest families.