George Osborne took advantage of a recovering economy yesterday to unveil a Budget for “makers, doers and savers”.
The chancellor set out the most significant reforms to pensions since 1921 and moved to compensate savers for years of low interest rates.
Bingo and beer taxes were also cut as he sought to shore up support in Tory heartlands in the penultimate Budget before next year’s general election. With a major extension to tax-free Isas and a million new “pensioner bonds”, Mr Osborne was accused of courting older voters with a Budget for “blue rinses not blue collars”.
But his aides said the measures were more likely to help people in their 40s and 50s preparing for retirement.
Sweeteners for Scots were anticipated ahead of the independence referendum in September, and were delivered in a new North Sea tax review, aid for regional airports such as Inverness, and a freeze on whisky duty.
Millions of workers will benefit from a rise of £500, to £10,500, in the amount they can earn before being taxed next year. Businesses were offered cuts to their energy bills and new tax breaks for investment.
There were more positive economic signs, with growth forecasts for the year revised up from 2.4% to 2.7%, meaning Britain is the world’s fastest-growing advanced economy. The UK economy will also finally become larger than it was before the 2008 crash later this year, according to a report from the Office for Budget Responsibility.
Delivering the Budget, Mr Osborne said: “With the help of the British people we’re turning our country around. We’re building a resilient economy.
“This is a Budget for the makers, the doers and the savers, and I commend it.”
But there was little cheer for smokers, who continue to suffer inflation-busting price rises, or Tory MPs who unsuccessfully called for a rise in the starting point for the 40p tax rate.
There was no cut in fuel duty, and oil and gas leaders were left angry at the chancellor’s decision to press ahead with new taxes on chartering rigs.
Welfare recipients were targeted by Mr Osborne again, with a £119.5billion cap on overall welfare spending to be introduced, excluding the state pension and jobseeker’s allowance.
Labour leader Ed Mili- band attacked the plans, saying there had been 24 tax rises since Mr Osborne became chancellor.
“Today the chancellor simply reminded people of the gap between the chancellor’s rhetoric and the reality of people’s lives. Living standards falling for 44 out of 45 months under this prime minister. Unmatched since records began.”
SNP MP Stewart Hosie said: “George Osborne’s attempts to use the Budget statement as a vindication for four years of austerity crumbled today when the numbers he published proved he has failed on every single one of the tests which he set for himself.”
CBI director-general John Cridland said: “The Budget will put wind in the sails of business investment, especially for manufacturers. This was a make-or-break Budget, coming at a critical time in the recovery, and the chancellor has focused his firepower on areas that have the potential to lock in growth.” TUC general secretary Frances O’Grady said: “This was a pre-election Budget, with giveaways aimed at the better off, not lifting the living standards of the many.”
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