British coalition goverment budget
British coalition goverment budget plan has just been released by Chancellor George Osborne, which lasted just under an hour. By now I am sure you are all aware that the main focus has been the 1p drop in fuel prices, this took effect as from 6pm on the 23th March 2011.
Mr Osborne’s comments included “put fuel into the tank of the British economy” and “the cost of filling up a family car such a Ford Focus has increased by £10 and he want to ease the burden on hard-pressed families”. Although there has been a cut at the pump, this has been paid for by a £2bn tax on the oil companies. The further 4p fuel duty rise that was due in April has been postponed.
There was a jump of up to 50p per pack for cigarette smokers, which was in line with Labour’s previous plans to raise the duty by 2% above inflation. Although there was increase to alcohol as previously planned it added 4p to a pint of beer, 15p to a bottle of wine and 54p to sprits.
Mr Osborne set out measures to boost enterprise, this included doubling the number of planned enterprise zones, and this is to bring discounts to business rates to deprived areas of the UK and a further cut to corporation tax which is going down by 2% instead of 1% in April.
He continued with a tax threshold change, by increasing the amount of earns before paying tax; this was an increase of about £600 from 2012.
He also pledged £250m to help 10,000 first time buyers to purchase new build properties within England. It is proposed that the buys will cover 5% of the cost, while the government and builder would both put in 10%; this is also aimed to boost the construction industry.
A scheme that was introduced by the previous government to help out of work homeowners with mortgage arrears will also be extended. The chancellor’s hands were tied by his post-election budget and last year’s spending review now leaving the UK locked into spending cuts to tackle the record budget deficit.
He has had to balance giveaways with tax raises. He also revealed that the expected UK’s economy growth is slow than expected. The forecast was showing a 2.1% growth at the begin of the year which has now dropped to 1.7%.
Other key points included:
- Lower forecasted borrowing.
- No personal tax increases.
- Long term plans to merge income tax and national insurance.
- Council tax to be frozen or reduced this year.
- Rise in air passenger duty to be frozen this year.
- 10% inheritance tax discount for those leaving 10% of estate to charity.
- Funding for more university technical colleges.
- 40,000 apprenticeships for young people out of work.
- 100,000 new work experience placements.
