Today marks the first Conservative budget in more than 19 years, with all eyes on how Tory election promises and pledges to cut benefits will pan out over this Parliament.
Chancellor George Osborne told the Cabinet this morning that this Budget would “put our country firmly on the path from a high tax, high welfare society to a lower tax, lower welfare society”.
In today’s speech, he will tell MPs: “Our long-term economic plan is working. But the greatest mistake this country could make would be to think all our problems are solved.”
Cuts to welfare of £8 billion had been promised over the next two years, with a view to making total welfare savings of £12 billion by 2017-18, but speculation this morning has suggested slowing this process down.
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- Introduction of new National Living Wage, aiming for £9 an hour by 2020. Cost to business will amount to just 1% of corporate profits, offset by reductions to national insurance contributions. From next April, the National Living Wage will be £7.20, an 11% rise on the current minimum wage rate of £6.50.
- Confirmation personal tax allowance will increase to £11,000, with goal of reaching £12,500 by 2020. Higher rate income tax threshold rises to £43,000 next year, from £42,000.
- Osborne claims UK working age benefit system should be more sustainable: working-age benefits to be frozen for four years. Statutory payments like maternity pay will be excluded from the freeze.
- All working parents of three and four-year-olds will receive childcare credits.
- Young people will face the choice of “earn or learn”, with automatic entitlement to housing benefit to be abolished for 18 to 21-year-olds.
- Corporation tax to be cut to 19% in 2017 and 18% in 2020.
- Confirms local councils will gain power to control Sunday trading hours, relaxing current laws.
- Government will introduce an “apprenticeship levy” on large employers, meaning that those who offer apprenticeships “will get back more than they put in”. Money for training will be directly controlled by employers. Osborne says “too many large companies have been leaving the training to others and taking a free ride on the system”.
- “Plan for productivity” to be set out this Friday, led by consortium of British businesses.
- Public-sector pay awards will continue to be 1% per year for the next four years.
- Osborne claims the gender pay gap is at all-time low; a record number of women in are in work.
- Plans to “make work pay” through the creation of an additional two million jobs. “Jobs are not created by accident, but when businesses have confidence,” he adds.
- “We have a job to do, this will be a budget for working people,” says Osborne.Â
