Budget: Britain will ‘pay its way in the world’, declares Osborne
CHANCELLOR George Osborne today delivered a Budget for “businesses and working families” as he insisted that Britain would “earn its way in the world”.
The headline rate of Corporation Tax, which the coalition has already cut from 28% to 26% and was due to fall further to 25% next month, will instead fall to 24% from April, with further annual cuts taking the rate to 22% by 2014.
Mr Osborne described the rate as “dramatically” lower that in competitor nations and as “an advertisement for investment and jobs in Britain.”
Despite the ongoing threat of weakness in the eurozone economy and a new spike in oil prices, the Office for Budget Responsibility predicts the British economy will avoid a technical recession by achieved growth in the first quarter of this year.
And the OBR has also revised its forecast for growth in GDP this year to 0.8%, slightly higher than predicted at the time of the Chancellor’s Autumn Statement although well short of the 2.5% forecast a year ago.
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Growth in the UK is forecast to rise to 2.0% next year, 2.7% in 2014 and 3.0% in each of the two following years while inflation is expected to fall to 2.8% this year and 1.9% in 2013.
As expected, the Chancellor also set out an objective of increasing private investment in road infrastructure, as well as increased investment in the rail system, the energy sector and superfast broadband, and also acknowledge the need for increased airport capacity in the South East.
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Mr Osborne also confirmed that the top 50p in the pound rate of Income Tax for high earners will but cut next year, but to 45p rather than to the 40p higher rate as many had expected.
The Chancellor said new analysis indicated that the 50p rate had only raised around the third of the sum expected when it was introduced by the previous government, and it was possible that it was raising nothing at all compared with the 45p rate which Labour had initially considered, as a result of avoidance measures.
However, Mr Osborne also announced new capping arrangements for pension contributions and higher levels of Stamp Duty Land Tax on homes valued at more than �2million. Overall, new taxes on the wealthy would yield five times more than the 50p rate, he claimed.
There were no fresh concessions on fuel duties but the rate of Vehicle Excise Duty for road hauliers will be frozen.