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Main announcements of Emergency budget (live blog)

Screen shot 2010-06-22 at 12.36.18 Highlights, not verbatim, from George Osborne's statement:

FINAL WORDS: This is a budget where the rich pay the most and the poor are most protected.

Final announcement is £2bn extra tax credit for low income families with children. Clegg nods vigorously.

State pension will be linked to average earnings again or 2.5% increase or prices - whatever is larger - by next April.

Income tax personal allowance to increase by £1,000 to £7,000 this year and eventually to £10,000.

From midnight higher earners will pay 28% CGT. No tapering as suggested by Tory rebels.

Council tax will be frozen for one year from April.

No increased duties on 'sins', eg petrol, smoking, alcohol. Cider duty hike planned by Labour is scrapped. This will help us "celebrate" England's progress to Quarter Finals or to "drown our sorrows".

VAT up to 20% from January 2010, Osborne says unavoidable. Labour jeers eventually silenced by Deputy Speaker.

Sound public finances must come before the lower taxes I believe in.

Regional growth fund will be established to boost infrastructure across UK.

£2bn bank levy is at upper end of estimates.

Corporation Tax will be cut by 1% each year for the next four years so that it is at its lowest rate in this country's history by 2014 (24%). Corporation tax will be even lower for small firms. Investment allowances will be kept until 2012 so that their abolition won't hurt recovery.

Total welfare savings - including reforms to cap housing benefits - will save £11bn by 2014.

Screen shot 2010-06-22 at 13.14.25 Child benefit will stay but will be frozen for three years.

Lone parents will be expected to look for work when their youngest child starts at school.

Tax credits will be reduced to households earning over £40,000.

£6bn will be saved by end of Parliament by linking benefit upratings to Consumer PI, rather than Retail PI.

Public sector pay freeze will be for two years (not one as previously suggested), exempting those earning £21,000 or less. These will receive flat £250 increases.

Ouch! Non-protected departments will see their real budgets cut by 25% over four years. Cuts will be allocated during the Autumn Statement on 20th October.

The student loan book, air traffic control and High Speed 1 rail link will be sold.

No further reductions on capital spending. The autumn spending statement will detail how this spending will be used to maximise economic growth.

Borrowing down to £20bn by 2015.

Danny Alexander looks nervously at Nick Clegg when Osborne announces the abolition of the Treasury's Euro Preparation Unit. We won't be joining the Euro in this Parliament.

"Country has over-spent, it has not been over-taxed" and that is why 77% of the budget adjustment will come from spending cuts and 23% from tax increases.

CPI will remain inflation target.

OBR growth forecasts: 1.2%, 2.3% next year then 2.8%, 2.9% and then 2.8%.

The independent Office of Budget Responsibility says that on the basis of this Budget's measures debt will be falling by the end of the Parliament.

"This is the unavoidable Budget"; "There will be no burying of hard announcements in the small print. The British people will hear things straight from me."; "Britain will go from an economy built on debt to a balanced economy."; "Everyone will share in the pain now but as the economy recovers everyone will share in the benefits."

Cameron cannot be seen in TV framing of the Budget:

Screen shot 2010-06-22 at 12.36.11 Tim Montgomerie

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