1348, PH: And Ed Miliband comes to a close, still sounding the same note: that the growth downgrades prove the coalition is bad for the nation’s health. We’ll come to a close there, too. Thanks for tuning in. More Budget coverage on Coffee House all afternoon, starting with these graphs.
1244, PH: Ed Miliband is suggesting that Labour were tougher on the banks because their bonus tax raised £3.5 billion. Problem is, it’s esimated that, after other tax effects, the actual amount that ended up in Treasury coffers was more like £2 billion — if that.
1342, PH: Oh, Miliband’s back on growth again: “The OBR has factored in every single policy announced today, and still downgraded its growth forecasts.”
1341, PH: Miliband’s loudest swipe at Osborne: “He’s Norman Lamont with an iPod.” Bit opaque, that one, if you ask me.
1338, PH: Miliband really is dwelling on the macro indicators — growth, inflation, etc — rather than the policy specifics. Understandable, but perhaps a tacit admission that Osborne has taken action on the rising cost of living.
1335, PH: Ed Miliband is a few minutes into his response. And, so far, it’s all growth, growth, growth — or, rather, the downgraded growth figures. “It’s not the wrong type of snow,” he quips, “but the wrong type of Chancellor.” It’s vociferous stuff from the Labour leader, so far, if a little one-note.
1330, PH: Osborne winds up with a triumphant — if abstract — blast about the country being “carried aloft by the march of the makers.” This is a Budget to help businesses and families, he says. And then sits down to cheers and groans, depending on what side of the House you are listening to.
1338, PH: And another rabbit — perhaps the big one. Fuel duty will be cut by 1p as of midnight tonight.
1337, PH: Here we go: the rise in fuel duty for 2012 will be scrapped, and — going further — the fuel duty escalator will be cancelled for this Parliament. This will be funded by a tax sting on oil companies. The escalator will be relaxed, and the taxes on oil companies relaxed, should oil prices fall significantly. Osborne describes this process as the government’s “stabiliser”.
1336, PH: Laughter as Osborne points out that Ed Balls’ plan to cut VAT on fuel would be “illegal”.
1324, PH: Osborne is setting the stage for a measure on fuel duty. “The British government cannot control of global oil prices,” he starts — a fact that sometimes appeared to evade Gordon Brown.
1321, PH: Osborne is reannouncing the £1000 increase in the personal allowance that was made in the last Budget. But he adds, as expected, that the personal allowance will be increased by a further £600 next April — and no-one will be taken into the higher rate as a result. “As a result … this government has taken 1 million people out of tax altogether,” he says. A victory for the Lib Dems.
1319, PH: What sounds like one of Osborne’s big fundraisers: a clampdown on tax evasion that will raise £1 billion a year — in theory.
1317, PH: Another one for those of you who are playing Budget bingo: Osborne describes a bundle of gift aid changes as “a big help for the Big Society”. The first mention for Cameron’s grand projet.
1315, PH: There will be a “single tier pension” worth £140 per week.
1312, PH: Low-level muttering from the Labour benches, as Osborne mentions John Hutton’s psneions review. The coalition benches respond with some cheers for the former Labour minister.
1310, PH: A belated triumph for Lord Baker, education secretary in Thatcher’s second term: 24 of his “technical colleges” — effectively academies that concentrate
on vocational skills — will be funded by the government. This is part of Osborne’s programme to deal with high youth unemployment. The other part is an extension of a “work
experience” scheme. A start, but not nearly enough to deal with one of the most perturbing aspects of the labour market statistics, you suspect.
1306, PH: “Our determination to be a greenest government in history…” — yep, Osborne’s into the green stuff. The headline announcement is porbably that the green
investment bank — for funding low-carbon energy, and the like — will start operating next year.
1303, PH: Obsorne tops the pre-Budget speculation on Enterprise Zones: the government will not fund ten of them, he says, but 21. The government will soon announce some of the
locations for these dergulated patches of land.
1259, PH: The rate relief for small business will be extended for another year. Osborne really is dwelling on business here.
1257, PH: The Chancellor confirms, unsurprisingly, that the 50p tax rate is temporary — but that now is not the “right time” to remove it. He suggests an argument against it, though, by announcing that the Treasury will take a closer look at how much it actually raises.
1256, PH: Jeers from the Labour benches at the first appearance of “we’re all in this together”.
1254, PH: Osborne is rattling thought a range of deregulatory measures. One that stands out is an “agreement” with the banks to increase
credit to small businesses by 15 per cent. Whether this will work in practice — as all lending targets so far haven’t — is another matter altogether.
1252, PH: Ah, but how will the corporation tax cut be funded? Osborne follows up by announcing that the bank levy will be “adjusted” to offset
the cut. The Chancellor clearly wants this Budget to look kind on business, but not on bankers. Question is: aren’t they all part of a growth agenda?
1250, PH: A major rabbit from the hat: corporation tax will not be cut by 1p in April, but by 2p — and then 1p in the following few years. Osborne’s
speech swaggers as he announces this: “Let the world hear … that Britain is open for business.”
1247, PH: And there it is: Osborne’s plan to merge income tax and national insurance. The government will “consult” on how this can be done,
across a number of years. He stresses that this does not mean that NI will be extended to pensioners, one of the political dangers with this approach.
1245, PH: Osborne’s into the growth passage now. A namecheck for Nigel Lawson, as a Chancellor who used the tax system to promote growth. Don’t forget Lawson reduced the higher rate from 60p to 40p in 1988 — and revenues soared as a result.
1242, PH: Borrowing, aka the deficit, for 2010/11 is set to be £145 billion — £2 billion less than the OBR’s previous forecast. That’s some money for Osborne to
“play with,” should he choose to take it. Borrowing will simmer down to 29 billion by 2014/15.
1240, FN: Osborne says inflation 2.5pc next year and 2.0pc in 2013 — so we wont be back to our supposed inflation target for another two years! Cumulative impact of that will be
horrid.
1238, JF: Osborne emphasising the monetary stimulus of low interest rates.
1237: Osborne confirms that the OBR’s growth forecast for 2011 has been downgraded from 2.1 per cent to 1.7 per cent (0.1 per cent under the independent average). He says that this “will create scope” for stronger growth in supsequent years: 2.5 per cent in 2012, and 2.9 per cent in 2013.
1237, PH: Before he gets to the actual policies, Osborne is building the framework. That means a lot of emphasis on th support for deficit reduction from bodies such as the IFS and OECD. He quips that this Budget is for “making things, not making things up.”
1236, FN: Osborne talking about “stability” — one of the many words undermined by inflation at a 20-year high. Things don’t feel stable out there on the high street.
1235, JF: Osborne flanked by Alexander and Cameron; Miliband by Balls and Harman.
1234, PH: Although he does go out of his way to dampen expectations. The Budget is not a tax-raising one, he says, but neither is there much room for “giveaways”. The
overall package will be “fiscally neutral”. The key thing to look out for is how he does pay for the giveaways that are included.
1233, PH: Right from the off, Osborne suggests that this is a Budget to tackle the rising cost of living.
1225: Stay tuned for live coverage of the Chancellor’s statement.
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