Budget 2012: the key points in summary - The Guardian

A simple run-down of this week's Budget announcement from the Guardian. 

Katie Allen

General remarks

• "This country borrowed its way into trouble. Now we're going to earn our way out."

• "This budget reaffirms our unwavering commitment to deal with Britain's record debts."

• A tax system where "millions of the lowest paid are lifted out of tax altogether and the tax revenues we get from the wealthiest increase".

Economy

• Impact of the sovereign debt crisis has been "significant".

• Office for Budget Responsibility (OBR) says UK will avoid technical recession with positive growth in first quarter of 2012.

• OBR says economy has "carried a little more momentum into the new year than previously anticipated" and revises up growth forecast for this year to 0.8% from 0.7% previously. Forecast for cut to 2.0% from 2.1%.

Public finances

• Fiscal forecasts have "improved a little" from November. Borrowing this year to come in at £126bn, down from November forecast of £127bn.

• "In total borrowing is £11bn less than I forecast in the autumn and this will be used to pay down debt."

• OBR says government is on course to eliminate structural current deficit by 2016/17.

Personal taxes

• Personal tax allowance – the threshold at which workers start paying income tax – will rise to £9,205 in April 2013, up £1,100 from £8,105 n April 2012.

• Top 50p tax rate will be cut to 45p from April 2013. "No chancellor can justify a tax rate that damages our economy and raises next to nothing."

• Clampdown on tax avoidance and evasion, which "I view as morally repugnant".

• From midnight a new 7% stamp duty tax on properties over £2m.

Business taxes

• Corporation tax will be cut to 24% in April, having already been cut to 26% from 28%.

• Corporation tax will be 22% by 2014. This is the "biggest sustained reduction in business tax rates for a generation".

• Above-the-line R&D tax credit from next year, as demanded by business groups.

Child benefit

• Child benefit to be partly removed from households where at least one person earns over £50,000 – softened from previous plans.

Pensions

• Plans to save £5bn by freezing age-related allowances for half Britain's pensioners

• State pension age to be automatically reviewed to ensure it keeps up with growing longevity.

• Simplification of tax system for pensioners.

• Single-tier state pension to be introduced – estimated to be £140.

Government bonds

• Government's debt management office is consulting on issuing longer-dated gilts beyond 50 years and on the case for perpetual gilts.

Business

• Enterprise finance guarantee to be expanded.

• Wants to double UK exports to £1 trillion this decade.

• Michael Heseltine to conduct review on how government can work better with private sector economic development

Media and technology

• Plans to turn Britain into Europe's technology centre.

• Help for video games and premium TV shows, with tax break that will attract companies such as Disney and HBO to make programmes in UK.

• "It is the determination of this government that we keep Wallace and Gromit exactly where they are."

Infrastructure

• Network Rail will upgrade lines in the north of England.

• Need to address lack of airport capacity in south-east: "[We] cannot cut ourselves off."

• Plan to "look at the opportunities for increasing the role of private investment in the road network, learning lessons from the water industry".

• Ten cities named as beneficiaries of £100m of government money to help develop ultra-fast broadband and Wi-Fi.

Cigarettes, alcohol and gambling

• New gaming machines duty with standard rate of 20% to be introduced.

• Plan to tax online gambling based on location of the gambler, not the company.

• Duty on all tobacco products will rise by 5% above inflation, with 37p on a packet of cigarettes from 6pm.

• No changes to duty rates set out by previous government. That means beer duty rises by 2% plus inflation, adding around 10p to the cost of a pint.

Fuel and vehicles

• No changes to fuel duty plans already set out.

• Vehicle excise duty to rise by inflation, but frozen for road hauliers.

Energy

• Package of tax changes to be introduced to ensure make the most from oil and gas extraction.

• £3bn new oil and gas field tax allowance targeted at west of Shetland.

• Savings to be sought in the administrative cost of carbon reduction commitment to business.

Public sector

• Looking at making public sector pay "more responsive" to local pay rates..

Armed forces

• Government spending in Afghanistan will be £2.4bn lower than planned over remainder of parliament.

• Extra £100m of improvements in the accommodation of armed forces and their families.

• Doubling of the families welfare grant used to support families left behind when personnel deploy.

Friday, 23rd March 2012

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