Budget 2010 revealed

Wednesday, 24 March 2010 20:29
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The Chancellor has finally unveiled his pre-election budget.  Here is The Sussex Newspaper breakdown of the key points.  Has the budget left you better off?  Read the facts then vote in our poll.  We'll send the results to your local MP.

Economy and public debt
• The Chancellor forecast the economy to grow by between 1% and 1.5% this year and between 3% and 3.5% in 2011. This is a reduction. His forecast for the following years is unchanged.

• Borrowing this year should be £11bn lower than forecast at £168bn. In 2010/11, borrowing will be £163bn, falling to £131bn in 2011/12, then £110bn in 2012/13.

• As a share of the economy, borrowing is forecast at 11.8% of GDP this year, 11.1% next year, then 8.5%. In 2012/13 it will be 6.8%, then 5.2%, falling to 4% in 2014/15.

• Public sector net debt will reach 54% of GDP this year. It will then increase to 75% by the end of the forecast period in 2014-15. Net debt, as a share of GDP, will begin to fall the year after that.

Banking

• The Treasury has already received over £8bn in fees and charges from banks and the one-off 50% tax on bankers' bonuses has already raised £2bn.

• Need for international systemic tax on banks, which he will urge on international finance ministers in Washington next month.

• A new guarantee will mean everyone can have a basic bank account, giving up to 1m more people access to bank accounts over the next five years.

• Agreement that RBS and Lloyds will provide a total of £94bn of new business loans.

Taxes

• Tax on bank bonuses raised £2bn in 2009-10, twice as much as forecast

• More systematic tax on banks is needed. It should be internationally co-ordinated

• Doubling of stamp duty allowance, from £125,000 to £250,000, funded by 5% stamp duty for properties worth more than £1m

• Inheritance tax threshold frozen for next four years

• Tax information agreements with Dominica, Grenada and Belize

• Business rates cut for one year from October, so 345,000 businesses will pay no rates at all

• No further announcements on VAT, national insurance and income tax

Jobs

• For older workers, an extension of tax credits

• Length of time over-65s have to work to receive work credits is reduced

• For next two years, no one under 24 will need to be unemployed for longer than six months before being offered work or training

• Total of 15,000 civil servants relocated, including 1,000 Ministry of Justice posts moved out of London

Drinks, cigarettes and fuel

• Duty on cider will increase by 10% above inflation from Sunday. Duty on beer, wine and spirits will increase as planned from midnight Sunday

• Tobacco duty will rise immediately by 1% above inflation this year, then 2%

• Increase in fuel duty to be staged. Fuel duty to rise by a penny in April followed by a further 1p rise in October and the remainder in January

Businesses

• RBS and Lloyds will provide £94bn in new business loans, nearly half to small and medium-sized businesses (SMEs), over next year

• A new credit adjudicator will fast-track complaints from smaller firms who say they have been unfairly denied credit

• Faster licensing process for new banks to boost competition

• Increase of 15% in the number of central government contracts going to SMEs

• A new national investment corporation, UK Finance For Growth, will streamline and improve government help to

SMEs

• New growth capital fund to provide capital for fast growing firms

• Investment allowance for small firms doubled to £100,000

Jobs

• A £2.5bn one-off growth package paid for by switching spending in some areas, with the extra proceeds from the tax on bank bonuses, announced last year

• Number of civil servants in London to be reduced by a third, with 15,000 posts relocated outside the capital within five years

• Public-pay settlements will be held at a maximum of 1% for the two years from 2011

Education

• A £35m university enterprise capital fund to support university innovation and spin-off companies

• A £270m fund to create 20,000 university places in subjects such as science, maths, engineering

Banking and savings

• Everyone to have a basic bank account, bringing an extra million people into the banking system over next five years

• From next month the annual Isa limit to rise from £7,200 to £10,200, and Isa limits to increase annually

Defence

• Over £4bn next year for operations in Afghanistan

Infrastructure and environment

• £100m set aside for repairs to local roads, £285m for improvements to motorways

• A £2bn green investment bank, using £1bn of public cash matched with private funds

• £60m to develop ports hosting manufacturers of offshore wind turbines

Tax credits and allowances

• Parents of one- and two-year-old children to get an increase of £4 a week in child tax credit from 2012

• The pensioners' higher winter fuel payment of £250 and £400 for the over-80s, guaranteed for another year

Savings

• From October next year, the most expensive properties will be excluded from the housing benefit calculation in each area, which will, added to anti-fraud measures, save £250m a year

• Departments will publish details about how to achieve £11bn of new savings.

 

Last Updated on Wednesday, 24 March 2010 21:04

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