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Pre-election Budget 'to support recovery and tackle the deficit'
In his final Budget before a much-anticipated General Election, and with the UK emerging from the 'deepest global recession for over 60 years', Chancellor Alistair Darling has outlined a series of measures aimed at tackling the economic deficit while supporting the recovery.
As widely predicted, the Chancellor revised his borrowing forecast for 2009/10 down from £178bn to £167bn, but also downgraded the economic growth forecast for 2011 to 3-3.5%.
Among the key measures announced was new support for first time buyers, in the form of a freeze in stamp duty land tax relief on residential properties costing less than £250,000. This will be offset by the introduction of a new 5% rate for properties worth over £1 million. Meanwhile, the inheritance tax threshold has been frozen for a further four years.
A £2.5 billion small business package aimed at boosting skills and innovation was unveiled, including a temporary increase in small business rate relief to take effect from October, in addition to a doubling of the Annual Investment Allowance and the Entrepreneurs' Relief lifetime limit.
Revealing that the one-off tax on bank bonuses has raised £2 billion, Darling pledged support for a global tax on bank transactions and announced that a million UK citizens will be guaranteed the right to a basic bank account.
The 3 pence rise in fuel duty scheduled for April will now be phased in, between April and January 2011. Duty on wine, beer and spirits will rise by 2% a year until 2013, while duty on cider will increase by 10% and tobacco duty will rise by 1%.
Other measures include a new £2bn investment bank to back low-carbon industries, funding for 20,000 new university places, further measures to clamp down on tax avoidance, and an extension of the winter fuel allowance for a further year.