The key points of Budget 2010Posted on: 25 March 2010 by Mark O'haire
Chancellor Alistair Darling has delivered the last Budget ahead of the coming general election. We run through the key measures announced.
Chancellor Alistair Darling insisted in his address to Parliament that "the right calls were made" in the handling of the global financial crisis but warned of "tough choices" ahead. Darling also reiterated his plan to halve the deficit within four years in a Budget that was high on rhetoric but low on concrete proposals.
Darling confirmed a growth forecast of 1-1.5% for 2010 and growth of 3-3.5% in 2011. The national debt was forecast to fall from 56% to 54% of GDP in 2009/10.
Borrowing was lower than the £178 billion forecast in the last Budget at £167 billion for 2009/10. Darling also predicts the national deficit will fall to £163 billion in 2010/11, £131 billion in 2011/12, £89 billion 2013/14 and £74 billion in 2014/15.
The one-off bank bonus tax announced last year has raised £2 billion for the Treasury's coffers - more than predicted. Darling also repeated his call for an internationally co-ordinated bank tax to enhance global regulation and reform of banking.
Public sector cuts of £5 billion were announced for the coming financial year and £11 billion of further efficiency savings, with 15,000 civil servants to be relocated out of London within the next five years. Public sector pay rises will be held at maximum of 1% until 2013.
No new hikes in VAT, income tax, capital gains tax or national insurance. The inheritance tax threshold is frozen at £325,000 for a further four years.
Darling moved to combat financial exclusion with the guarantee that everyone will have a basic bank account under new legislation to be announced.
The child tax credit to increase by £4 a week for one and two-year-olds from 2012.
There will be a guarantee of job or training for all 16 to 24-year-olds extended to March 2012.
The tax-free ISA limits will increase annually in line with inflation.
Tax relief on pensions will be restricted for those on £130,000 or more a year.
Alcohol and tobacco
Duty on cider will rise at 10% above inflation from midnight Sunday in measure designed to tackle binge drinking.
Duty on beer, wine and spirits to rise 2% from Sunday.
Tobacco duty will rise at 1% above inflation from midnight Wednesday.
Homes and property
Help for first-time buyers - and the faltering housing market - through the doubling of the stamp duty threshold to £250,000 for two years but for first-time buyers only. The measure will be paid for through an increase in stamp duty to 5% for homes priced at £1 million and above, effective midnight Wednesday.
The 3p fuel duty increase previously announced will now be phased in by 1p a month from April, another 1p in October and a final 1p in January 2011.
The chancellor also allocated £285 million to improve motorway network and £100 million for motorway and road maintenance.
Pensions and pensioners
Higher winter fuel payment for pensioners will be renewed for another year - worth £250 or £400 a year for over-80s.
The chancellor announced a £2.5 billion one-off growth package to help small businesses and invest in key skills. New measures to force Lloyds and RBS to issue £94 billion of new business loans were also announced. A new growth fund of £200 billion for small businesses unveiled for coming financial year. Annual investment tax allowance for small businesses doubled to £100,000 and entrepreneur tax relief threshold increased to £2 million.
Tax avoidance clampdown: three new tax information exchange agreements announced with three new counties, including Belize. The chancellor estimates the new measures will raise £500 million in previously lost tax.
Darling also vowed to sell shares in state-owned banks in a way that "gets all taxpayers money back" - but offered no concrete measures.
A further £4 billion allocated to fund military operations in Afghanistan.
New green investment bank announced in a £2 billion measure.
Advisors to be hired to sell-off the student loans book.
New university enterprise capital fund announced, in a £35 million measure aimed at helping the creative industries.
New one-off growth fund for universities unveiled in a £270 million measure.
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