Budget 2014 summary of key points

The major announcements as Chancellor George Osborne presents the Government’s plans for spending and taxes to the House of Commons.

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Opening remarks

• Osborne says the economy is continuing to recover and recovering faster than forecast. “Together with the British people we held our nerve”

• However, the job is far from done, our country still borrows too much, we still don’t invest, save or export enough. This is a budget for delivering a resilient economy, for the “makers, doers and savers”.

• Osborne says “In this budget we make sure hardworking people keep more of what they earn and what they save. Support for savers is at the centre of this budget“.

Growth upgraded

• Growth estimates for 2014 have been upgraded from 1.8pc a year ago, and 2.4pc in December to 2.7pc. Biggest upward revision to growth between budgets for at least 30 years

• Office for Budget Responsibility predicts 2.3pc growth in 2015, 2.6pc in 2017 and 2018, and 2.5pc in 2018.

Public Finances

• 2014-15’s deficit forecasts cut from 6.8pc to 6.6pc of GDP.

• In the following years it will be 5.5pc, then 4.2pc, 2.4pc, and will reach 0.8pc in 2017-18. The OBR predicts a 0.2pc surplus in 2018-19.

• Lower borrowing will mean each household saving £2,000 in lower debt interest payments.

Bank of England

• Bank of England’s remit to keep inflation at 2pc renewed

• But the Bank has been asked to be “particularly vigilant” around the housing market.


• A vote on capping welfare spending at £119bn in 2015-16, rising in line with inflation, will be held next week. Excludes state pension and unemployment benefit.


• The personal allowance will be raised from £10,000 to £10,500

• 40p income tax threshold to rise from £41,450 to £41,865 in April, and another 1pc to £42,285.

• Those accused of using a tax avoidance scheme and appealing will have to pay tax up front while they appeal, rather than after. This will bring forward £4bn in receipts.

• Duty on bingo will be cut to 10pc, and the duty on fixed odds betting terminals will be raised to 25pc

• 2pc above inflation tax rise on tobacco will continue in next parliament.

• Alcohol duty will rise in line with inflation, apart from scotch whisky and ordinary cider, duty on which has been frozen.

• Beer duty will be cut by another 1p

Savers and pensions

• The tax-free limit for ISAs has been increased to £15,000, with stocks and shares allowances merged.

• Pensioners will not have to buy an annuity and will be able to draw down as little or as much, with tax restrictions on access to pension pots removed.

• 10p rate for savers abolished

Property and infrastructure

• From midnight tonight, properties bought for more than £500,000 through “corporate envelopes” will be liable for 15pc stamp duty.

• Help to Buy Scheme extended until 2020

• New garden city to be built at Ebbsfleet, the first for 100 years, building 15,000 homes

• £140m extra for flood defence repairs

For businesses

• Investment allowances for businesses doubled to £500,000 and extended to the end of 2015 at a £2bn cost.

• Export finance doubled to £3bn and interest rates on lending scheme cut by a third

• The Government will create an Alan Turing institute for research intoBig Data


• The carbon price floor will be capped as part of a £7bn package to save manufacturers from increasing energy costs


• A fuel duty rise due in September has been scrapped

• Air passenger duty reformed: All long haul flights will carry the same tax rate as current visits to the US

• A £200m pot for councils to repair pot holes


• Under-21s taken out of employers’ national insurance contributions

Source The Telegraph