Budget 2011: Chancellor George Osborne cuts fuel tax by 1p
BRITAIN’S motorists were given a small crumb of comfort today as George Osborne cut fuel tax by 1p a litre instead of putting it up 5p from next week.
That was the stand-out announcement in the budget as Mr Osborne announced that the fuel “escalator” which would have seen duty on petrol and diesel would be replaced by a “stabiliser” to try to keep it at a more constant level.
He also confirmed plans to raise the personal tax allowance by a further �630, to �8,105, a real increase of �48 extra per year, or �126 in cash terms.
And he claimed that together with this year’s rise, it would mean a total of �326 extra money each year for “those working hard to pay for their family’s needs.”
But he announced a cut in growth forecasts amid continuing bad economic news.
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Mr Osborne’s second budget was greeted by cheers on the coalition benches but was damned by Labour leader Ed Miliband,
He said: “It is the same old Tories. It is hurting but it isn’t working.”
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Mr Osborne admitted that the recovery would be more sluggish than expected and the deficit take longer than previously planned to pay off.
The Office for Budget Responsibility slashed its growth forecast for this year from 2.1% to just 1.7%, although Mr Osborne said that it would pick up in future years.
At the same time borrowing over the next five years will be a total of �47 billion higher than previously predicted.
The OBR is now expecting a deficit of �122 billion next year, compared to the �117 billion previously forecast, while by 2015-16 it will still be �29 billion as against the �18 billion it had been thought.
BUDGET AT A GLANCE
Chancellor George Osborne delivered his 2011 Budget statement today. Here are its major points:
Annual growth forecast revised down from 2.1% to 1.7% in 2012.
Inflation expected to remain at 4-5% this year, 2.5% next year and 2% the following year.
Libya military action to be financed entirely by Treasury and Treasury reserve.
Borrowing forecast to fall from �146 billion this year to �29 billion in 2015/16.
- �250 million shared equity scheme for first-time home buyers.
- �100 million to help repair potholes on the roads.
ENTERPRISE AND SCIENCE
- 21 new enterprise zones to be created.
- �100 million extra to be invested in new science centres.
- Green Deal to reduce energy bills from next year.
- The UK to become the first country in the world to introduce a carbon price floor for the power sector.
- New “green investment bank” to have access to �3 billion of funds.
EDUCATION AND JOBS
- 24 university technical colleges to be founded.
- Extra 40,000 apprenticeships for jobless young people in England.
- Hutton recommendations on public sector pensions accepted.
- Single-tier flat-rate state pension to be created, expected to be about �140-a-week.
- Gift aid administration to be simplified, especially for small donations.
TAX AND DUTY
-Direct tax to be indexed by CPI from April 2012.
- Consultation on merging National Insurance and income tax.
- From April, corporation tax will be reduced by 2%, and by 1% in each of the following three years, to bring it to 23%.
- Bank levy rate to be adjusted to offset the cut in corporation tax.
- �350 million worth of regulation on businesses to be removed.
- Relief for entrepreneur tax doubled to �10 million.
- A �50,000 charge for non-doms who have lived in the UK for 12 years.
- The 50p tax rate should be a temporary measure - tax receipts to be reviewed.
- Taxation of high value property needs reform.
- Rate relief holiday for small businesses extended to October 2012.
- Inheritance tax discount for charitable donations.
- Tax avoidance loopholes to be closed, raising �1 billion.
- Personal tax allowance to rise from �7,475 to more than �8,105 in April 2012.
- Plans to switch air passenger duty from passengers to planes have been dropped.
- Air passenger duty rise postponed for one year. The Government will seek to impose the tax on private jets.
- No new changes to rates of alcohol duty.
- Tobacco duty changes announced earlier take effect from 6pm today.
- Business mileage allowance increased from 40p to 45p.
- Fair Fuel Stabiliser introduced, funded by increasing the supplementary charge on North Sea oil and gas production from 20% to 32% from tomorrow.
- Petrol price escalator cancelled when oil price is high.
- Fuel duty cut by 1p per litre from 6pm today.