Jobs
- Government pledges £1.7 billion to support Jobcentre Plus and the New Deal
to help protect 500,000 jobs.
- From January, all people
aged 25 years or younger will be given a job or training if they have
been unemployed for 12 months or more. This is forecast to help 250,000 into
employment.
This move was widely expected in what Alistair Darling had hoped would be
known as his "Budget for jobs". The initiative to encourage more
young people into work could not be more timely - this morning new
figures revealed that unemployment hit 2.1 million in the three
months to February, which is the highest level since Labour came to power in
1997.
- People in this scheme, placed in a job, will receive a wage. Participants on
a training scheme will be given additional money on top of income support.
- £260 million will be provided to train young people for skills needed for
emerging industries
- £250 million will go towards creating new sixth-form places, and a further
£400 million in 2010-11
- Homeowners who lose their jobs will be given an additional six months of
mortgage payments to cover costs while they seek employment.
- Statutory redundancy pay will increase from £350 to £380 a week.
This will be a disappointment for many. The TUC had hope the Government
would increase the ceiling to £500. With the number of people claiming
benefits rising by 73,700 to 1.46 million in March, clearly more Britons
would benefit from a bigger increase.
Housing
- Stamp
duty holiday on properties worth £175,000 or less will be extended until
the end of the year
- Pledge to begin a scheme to guarantee securities backed by mortgages to help
increase flow of money in housing market
- Government will make a further £80 million available for HomeBuy Direct -
its shared
equity mortgage scheme
- Darling announces £500
million pledge to kick-start housing
- A further £100 million will be made available for local authorities to build
energy efficient houses
- Government will bring forward investment of £50 million for the
modernisation of homes for the armed forces
Taxes
- VAT will return from 15% to 17.5% by December
- Fuel
duty will rise by 2p a litre from September and a further 1p above
inflation each April for the next four years
- Alcohol
duty will rise by 2% from midnight tonight
- Tobacco duty will rise by 2% from midnight tonight
- From April 2011, pension
tax relief for people earning over £150,000 will be restricted to ensure
it is tapered to the same 20% the majority of other people receive
- Tax rate for people
earning over £150,000 a year will rise from 40% to 50%. It will be
introduced by next April
- Fuel, alcohol
and tobacco duty increases will raise £6 billion by 2012
- Government will close loopholes and schemes which will generate £1 billion
over three years
Family finances and pensions
- Child tax credit will increase by £20
- Children with disabilities will get an extra £100 in their Child Trust Fund
and children with severe disabilities will receive an extra £200
- Pensions will rise by 2.5%, even if the RPI
measure of inflation continues to fall to below zero, as expected by
September.
The Retail Price Index measure of inflation, which is used as a benchmark
for both wages and pensions, has already slumped into negative territory -
the first time since 1960 - falling by to -0.4%. Today's pledge will be a
huge relief for pensioners but those workers seeking a pay rise won't be
feeling too optimistic.
- Pensioners of working age who look after grandchildren will gain in their
basic state pension
- Winter Fuel Allowance for pensioners will be extended for another year and
increased to £250 for the over 60s and £400 for the over 80s
- Capital exemption on pension credit has been increased, raising the ceiling
from £6,000 to £10,000 from November this year
- Annual limit on ISAs will be increased £10,200, of which £5,100 can be saved
in cash
Business
- Motor industry to introduce a scheme to award £2,000 to owners of cars older
than 10 years to scrap their vehicles. The scrappage
scheme will be introduced from next month until March 2010.
No surprises here though apparently the introduction of the scheme was a
bone of contention between Mr Darling and Lord Mandelson, the Business
Secretary, due to a question mark over who was going to pick up the cost.
The scheme, though, is a welcome move. Germany, where the Government has
been offering drivers a €2,000 allowance, actually managed to increase
annual new car registrations by 40% in March - in the UK, that number
declined by 30%.For the car industry, this is a major shot in the arm,
though is only a drop in the ocean in terms of having a knock-on effect on
those American basketcases, General Motors and Chrysler.
- Loss-making companies can reclaim taxes made on profits in last three years.
This will be available until November 2010 and lead to average repayments of
£4,000.
- Will introduce a top-up trade credit insurance scheme for businesses who see
insurers reducing their cover
- A new Strategic Investment Fund containing £750 million worth of new
investment will be set up to help fast-growing and innovative industries
- Business capital allowance rate will increase to 40% to encourage comapanies
to bring forward investment. Businesses currently have an investment
allowance of £50,000
- Further investment to be made available for digital investment to extend the
British broadband network
Green Energy and Oil
- £1 billion pledge to combat climate change
- Commits to cutting carbon emissions by 34% by 2020
- £435 million pledged to support energy efficiency measures for homes,
businesses and public buildings
- Commits £525 million over 2 years into building off-shore wind farms
- Combined heat and power technology projects will be exempted from the
Climate Change Levy from 2013 and will benefit from £2.5 billion of
investment
- £405 million of new funding will be invested in low carbon energy and
advanced green manufacturing
- WIll bring forward incentives to encourage smaller oil fields in the North
Sea to be brought into production which could lead to an extra two billion
barrels of oil and gas
Economy
- UK economy is expected to shrink by 3.5% in 2009
A 3.5% fall in GDP is the worst slump since just after the Second World War
in 1946 when the economy shrunk by 4.3%. However, the International Monetary
Fund (IMF) believes this forecasts is too optimistic and that GDP will
contract by 4.1% over 2009.
- GDP will grow by 1.2% in 2010, 3.5% in 2011 and 2.75% thereafter
Mr Darling's prediction that GDP will grow by 1.25% - just in time for a
general election - is disputed by the IMF which expects the economy to
decline by 0.4% in 2010.
- CPI
measure of inflation is expected to fall to 1% by the end of the year.
- The Bank of England's target for inflation will remain at 2%.
- RPI
measure of inflation is expected to fall to -3% by September before
moving back to zero by the end of the year.
Government Finances
- Borrowing will reach £175 billion, equal to 12.4% of GDP, this year.
The Chancellor was expected to reveal that public borrowing had soared to
this level. The crisis in the financial sector, which was responsible for
27% of UK corporate tax revenues, has severely dented public coffers and
tax, as a share of GDP, is currently 1.2 percentage points lower than it was
lst year.
- Public borrowing will fall to £173 billion, 11.9% of GDP in 2010. In
subsequent years it will decline to £140 billion, 9.1% of GDP, £118 billion,
7.2% of GDP and £97 billion, 5.5% of GDP
- National
debt as a share of GDP will rise from 59% this year, to 68% in 2010-11,
to 74% in 2011-12 and 79% in 2013-14
- UK net
debt will "stabilise and begin to fall" in 2015-16
- The current budget deficit will come back into balance in two years
- Public
service spending will be cut to 0.7% a year from 2011-12 onwards. It had
been forecast at 1.1%
Spending
on the public services was forecast to be cut, but today's figure is
brutal. Savings at the back office level of government are expected to hit
£5 billion this year and rise to £15 billion annually by 2012-14. Moves to
achieve cost-cutting could include cutting office space by 30%, halving the
size of the Land Registry and preparing the Royal Mint for whole or partial
sale.
- Efficiency savings from reducing public sector back-office functions to claw
in £9 billion by 2011-12
- Capital spending will continue at 1.12% of GDP as the country heads towards
the 2012 Olympics
- Government will raise £16 billion through selling property and other assets
in the three years from 2011-12
