LIVE: Budget 2015

Rolling coverage of the key measures in the first Conservative-only budget since 1996. 

George Osborne outside Number 11 this morning. (Photograph: Paul Hackett/Reuters)

 

  • “We should cut the deficit at the same pace as we did in the last Parliament, we shouldn’t go faster we shouldn’t go slower.”
  • Deficit reduction goal changed. The surplus will be delayed by one year to 19/20 but the Chancellor says national debt will be lower by that point. “A smoother path to the same destination.”
  • Change in goal due to stronger tax receipts than forecast, extra savings in this financial year, and banks like RBS being returned to the private sector faster.
  • Borrowing forecasts from the OBR:
  • £75.3bn last year;
  • £69.5bn this year;
  • £43.1bn next year;
  • £24.3bn in 17/18;
  • £6.4bn in 18/19;
  • Surplus of £10bn by 19/20

 

  • Government will be mandated to achieve a budget surplus unless the OBR (Office of Budget Responsibility) is judging that growth is less than 1%
  • Public sector pay will rise by 1% for the next 4 years.
  • Government will increase NHS funding by £10bn by end of decade.
  • Crackdown on tax avoidance/evasion to raise £7.2bn
  • Non-dom status subject to changes from 2017:
  • An end to inherited status
  • End to non-doms being allowed to shift residences in the UK offshore to avoid inheritance tax
  • A time limit on non-dom status for anyone resident in the UK for 15 of the last 20 years.
  • Bank levy rate will “gradually fall” over next 6 years. New 8% surcharge on bank profits.
  • Rise in Insurance Premium Tax to 9.5%
  • More money for Victoria Cross & George Cross recipients. Permanent memorial for victims of terrorism abroad & memorial for victims of Tunisia terrorist attack, more money for school cadet programmes, regeneration of the RAF Group Fighter Command Centre.
  • New Vehicle Excise Duty bands from 2017. New dedicated roads fund for investment in road network
  • Consult on plan to allow new cars to wait 4 years instead of 3 for first MOT, saving motorists £100m p.a.
  • Fuel duty to remain frozen this year.
  • New apprenticeship levy on “all large firms”
  • Student Maintenance Grants abolished from 2016/17, replaced with loans for new students which have to be paid back once they earn £21k p.a. Loan on offer will be higher than the grant at £8k.
  • Government will consult on freezing at £21k the threshold for loan repayments.
  • Chancellor has agreed “historic” devolution settlement with Greater Manchester. Negotiations continuing with Sheffield, Leeds, Liverpool
  • £30m for Transport for the North to co-ordinate northern transport infrastructure, develop an oyster-style system
  • Powers for new mayors to set Sunday trading hours. 
  • Restrict mortgage relief on rental property to the basic rate of income tax. 
  • Couples can pass on family homes tax-free as long as property is worth less than £1m.
  • Families can pass up to £1m to children without paying inheritance tax.
  • Consult on taxing pensions like ISAs: add taxed income, topped up by government on tax-free basis, then withdrawals tax free.
  • Rise in Annual Investment Allowance to £200k by end of parliament (tax relief on investment from companies)
  • Dividend tax to rise. Tax-free allowance of £5k.
  • Corporation tax to fall from 20% now to 19% in 2017 then 18% by 2020. 
  • £12bn of welfare savings
  • BBC to fund TV licenses for over-75s
  • Housing benefit ended for 18 to 21-year-olds except in exceptional circumstances.
  • Working parents will eligible for free childcare of up to 30 hours per week. 
  • Employment & Support Allowance cut to level of Jobseekers’ Allowance for those deemed fit to work. (Cut of £30 per week but for future claimants only).
  • Working-age benefits to be frozen for 4 years
  • Housing benefit reduced by 1% per year for next 4 years
  • Income threshold in tax credits reduced from £6,420 to £3,850.
  • Universal Credit work allowances similarly reduced – no longer awarded to non-disabled claimants without children.
  • Cut benefits cap to £23k p.a. in London and £20k elsewhere. 
  • Families on £30k will have to pay market rents if they want to live in social council houses.
  • No extra tax credit, Universal Credit or housing benefit support for a third child after 2017. Provisions for exceptional circumstances e.g. “multiple births.” Only applies to new claimants.
  • Tax credits changes reduce total amount spent to 2007/08 levels.
  • Rates of income tax unchanged. 
  • Tax-free personal allowance raised to £11,000 from £10,600 in 2016. Government will legislate to ensure personal allowance rises with inflation once the £12,500 goal is met. 
  • 40p tax threshold to rise to £43,000 from £42,385. Set to rise to £50k by 2020.
  • Commit to NATO target to spend 2% on defence every year until 2020.  A real increase in defence budget every year plus a £1.5bn “joint security fund.”
  • New national living wage will be COMPULSORY for working people 25 and over, £7.20 from next April and to reach £9 per hour by 2020. 
  • National Living Wage will be at least 60% of median earnings by 2020.
  • Employer National Insurance contributions to fall for small companies. Employment Allowance to rise to £3k, allowing small firms to employ 4 people on National Living Wage without paying NI.