BUDGET 2011

Economic outlook
GDP Growth for 2011 has been revised downwards to 1.7 per cent.  The Office for Budget Responsibility (OBR)
attributed this to a weaker final quarter last year and higher than expected inflation levels.

Borrowing for 2010/11 will come in at £146 billion for 2010/11, reducing to £122 billion for 2011/12 and then as follows:

£101 billion (2012/13)
£70 billion (2013/14)
£36 billion (2014/15)
£29 billion (2015/16)

Tax
Office of Tax Simplification's (OTS) recommendation to abolish Community Investment Tax Relief has been ignored.

Consultation to begin on merger of National Insurance and Income Tax.

From April, Corporation Tax will reduce by 2 per cent (higher than the 1 per cent previously announced).  It will then fall by 1 per cent in each of the following three years until it reaches 23 per cent.  Bank Levy rate to be adjusted to offset the effect.

Property: Work to begin on assessing tax affairs of owners of high value property. Osborne said, 'Owners of high value property cannot avoid paying their fair share.'

Tax avoidance and evasion: Osborne said, 'Not enough has been done in recent years to tackle this injustice. We are doing more today to clamp down on avoidance than in any budget in recent years.'

Council tax to be frozen this coming year.

All workers in the armed forces or civil servants will receive a pay uplift of £250.  National Insurance rate rise will have to go ahead, but the threshold has been increased, so it is cheaper to employ people earning less than £21,000.  

Those earning less than £35,000 will be better off due to the personal allowance threshold revision, claims Osborne. From April next year, personal tax allowance to increase to £8,085.

Air passenger duty rise to be delayed until next year.

Alcohol: Strongest beer duties to be increased. No further changes to be announced.
Tobacco: Rates to increase by 2 per cent above inflation from 6pm this evening.

Fuel duty
Osborne said, 'A responsible government is able to listen and respond. The price of petrol has become a huge burden on families.

'The previous cabinet put in place a new fuel duty escalator that included 7 fuel duty increases. The third step on the escalator would add another 5p on a litre of petrol from next week.

'Fuel duty escalator will be cancelled, not just for this year or next year, but for the rest of this parliament.'

Osborne said the North Sea Oil tax regime was most recently changed in 2006.  Oil companies are making unexpected profits from oil prices and other countries have a regime that regulates returns while the UK does not.

He explained, 'We can introduce a fair fuel stabiliser.  From tomorrow, the supplementary charge will increase from 20 per cent to 32 per cent.  This will raise an additional £2 billion of revenue. We will delay the inflationary rise in duty until next year.'

Fuel duty will also be reduced by 1p per litre from 6pm tonight.
  
Regulation

Planning: Osborne said, 'Councils are spending 13 per cent more on permissions than 5 years ago, despite the fact that applications have fallen by a third.'  All bodies will now have to prioritise growth and jobs.  Controls on greenbelt to be maintained, but changes made to legislation relating to previously developed land.

Small businesses
Enterprise Investment Schemes (EIS): Relief to rise from 20 per cent to 30 per cent.
The limit on the amount that can be invested to rise by 400 per cent.

Rate relief - At a cost of £370m, I am extending the rate holiday for another year until October 2012.
Real Estate Investment Trusts (REITs) to be simplified to encourage home building.

Property ownership
£250 million put aside for a new First Buy scheme. First Buy will be available to buyers who want to buy a property but cannot afford the deposit.  

Science & technology
From bank levy, an additional £100m for new research and development centres at four key locations.
From April 2011, small companies research tax credit will rise to 200 per cent and then to 225 per cent from next year.

Transport
Additional investment in regional railways.
Swindon to Kemble redoubling scheme to go ahead, for electrification of the Great Western Railway Mainline.

£100m to help council road repairs.

Enterprise
21 new enterprise zones to be funded. New enterprise zone locations to include: Birmingham, Solihull, Leeds, Bristol, Sheffield, Derbyshire, Nottinghamshire and London.

Green taxes
The creation of the Green Investment Bank. Osborne said, 'We have already committed £1 billion, today I commit £2 billion more to start operation one year earlier than planned in 2012. From 2015/16, we will allow the Green Investment Bank to borrow to invest.'

New capital allowances for manufacturing.

Climate change agreements extended until 2023.  

Education
The government is committed to funding university technical colleges. The curriculum is being developed between universities and local employers.  The government will fund 12 new university technical colleges and subsequently double that number to at least 24.

40,000 apprenticeships to be funded.  A total of 250,000 will be funded over the next four years.

Pensions
New single tier pension recommended, based on contributions and a flat rate.  The new pension would be worth £140 per week at the moment.  It will not apply to current pensioners.  

Culture
Reforms to support charity giving. Gift Aid administration to be simplified.  By 2013, a new online system to be implemented. Osborne said, 'Wealthy people in society, to be encouraged to give more.'