Budget 2016 Live: The major announcements as they happen

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Budget 2016
Budget 2016

As George Osborne makes his Budget 2016 speech, we bring you the headlines as they happen.

To help people invest and save, he mentioned the Help to Save plan announced by David Cameron this week.

There will be a new ISA limit of £20,000 a year for everyone from April next year.

On pensions, he said he doesn't want to change the pensions regime - instead he will introduce an alternative for young people.

For those under 40, there will be a completely new flexible way for young people to save - a lifetime ISA. They can put money in, get a bonus from the government, and save up to £4,000 a year. For every £4 they save, the government will give them £1 - every year until they are 50. They can spend it on a house or a pension. And they won't pay tax when they take the money out.

There will be consultation on whether people will be able to take the cash out and then put it back in while retaining the benefits of the savings vehicle - or borrow against the value of their savings - but at the moment, anyone spending their cash on anything other than a house or retirement will have to repay the government bonus, and a 5% early access penalty.

The tax-free personal allowance will be raised further, from April next year it will rise to £11,500 - a tax cut for 31 million people, and 1.3 million of the lowest paid will be taken out of tax altogether.

On higher rate tax, from April 2017 the threshold will rise to £45,000 - and lift over half a million people out of the band altogether.

He has scrapped Class 2 NICs for self-employed people. CGT will also be cut from 20% to 28% and for basic rate taxpayers from 18% to 10% - which will come into effect in three weeks.

Fuel duty. Given that petrol prices have fallen, Osborne had penciled in an inflation-linked rise to the fuel duty. However, to boost people's spending power he is freezing it.

Tobacco duty will continue to rise at 2% above inflation. He will also reform tobacco regime to introduce an effective floor in the price of cigarettes.

Beer and cider duty, whisky and spirits duty will be frozen - all other alcohol duty will rise as planned.

In what may be one of the biggest headlines of the Budget, Osborne says he is committed to the health of the next generation too. He wants to incentivise manufacturers to make soft drinks less sugary - and has introduced a new sugar levy on the soft drinks industry.

It will be levied on the companies - introduced in two year's time (2018). There will be two bands - for those with some sugar and those with more. Pure fruit drinks and smallest producers will be excluded. It will raise £520 million. That money will be used to double the funding of sport in Primary schools, and for secondary schools the government will offer money to lengthen the school day to include sports activities (as part of its education funding changes).

The Libor funds will be used specifically for children's hospital services.

He has also pledged £12 million from the tampon tax to charities.

On education he emphasised that he is investing in the next generation - and put forward the much-trailed Academy reforms. It means that by 2020 every school will be - or will be on the way to becoming - an Academy.

There will also be a focus on schools in the North, and he will look at teaching maths to the age of 18 for all.

He will also introduce a fair national funding formula - and committed half a billion pounds to speed its introduction.

He is announcing measures for new housing. He will use extra the stamp duty from second home owners to support community housing trusts.

He is announcing £150 million to support homeless people and reduce rough sleeping.

Osborne has spoken about the Northern transport infrastructure investment of £150 million before the Budget - including HS3 between Manchester and Leeds. He has also committed to CrossRail 2 linking North and South London.

He says he will increase insurance premium tax by 0.5%, and will commit that money to flood defences - including in Cumbria.

He is also supporting cultural infrastructure investment - including extending the support for Cathedrals, a new Shakespeare North Theatre, and a tax break for touring theatre productions.

Osborne announced more devolution of power, including an agreement with Scotland, and a city agreement with Edinburgh. In Wales he says he is committing to new powers to the regions, and from 2018 will halve the price of the tolls on the Severn crossings. In Northern Ireland he is working on devolution of taxes.

In England he is transferring new powers over the criminal justice system to Greater Manchester, and agreed new elected mayors in East Anglia and the West of England and Greater Lincolnshire.

By the end of this parliament, 100% of local government resources will come from local government - raised and spent in the area.

The Greater London Authority will move towards the retention of business rates it raises from next April.

Stamp duty changes have been welcomed and the IMF suggested he did the same for firms - which will help small firms. There will be a zero rate on properties worth up to £150,00, 2% on the next £100,000 and a 5% top rate. 90% of businesses will pay the same or less.

He will take steps to simplify climate charges on businesses.

He wants to help the oil and gas sector as the oil price falls. He is cutting the supplementary charge on the industry from 20% to 10%, and the petroleum revenue tax is effectively axed too - backdated to January.


He suggests fundamental reform of the business tax system to close loopholes. He is publishing a road map for a low tax regime to attract multinationals, but he has pledged to ensure they pay taxes here too. This will include restricting the historic losses that can be offset against profit for tax purposes.

He says all the money raised from larger firms will be used to help smaller businesses pay less tax. He will reduce rate of corporation tax again, by 2020 it will fall to 17% - down from proposals for 18%.

He is going to help micro entrepreneurs, so he will introduce two new tax allowances -one for people trading online and another for those renting their homes out online.

Small business rate relief is available at the moment with a threshold of £6,000. This will rise to £15,000 - and the threshold of the higher rate will be raised. It means a huge number of small businesses will pay no business rates.

Osborne says he is again cracking down on tax avoidance, including the wheeze of public sector employees being employed through a company. £12 billion will be raised in tackling tax avoidance and evasion.

He says the top 1% richest people in the country are paying 28% of income tax - more than under the last Labour government - and says this is a sign we are all in this together.

He predicts borrowing will fall to £72.2 billion this year, £55.5 billion next year, and £38.8 billion a year later. He says the deficit will fall next year to 2.9% of GDP and 1.9% the following year. He admits he missed his borrowing targets, but insists that in 2019/20 there will be a surplus - which will rise the following year.

Next, onto public spending. Osborne says he has rejected 'dangerous' calls for more spending, and reiterated his commitment to Britain 'living within its means'.

He wants to save £3.5 billion a year by 2019/20 through 'efficiency'.

On welfare, he claims the cuts to disability benefits announced before the Budget will help target the benefits better.

On International Aid, he will freeze it rather than increasing it.

For public sector pensions, the public sector employer contributions will increase - to keep them 'sustainable'.

He says we have created more jobs than the OBR forecast, and unemployment fell again. Employment is now at a record high - and 75% of jobs are full time. The OBR is forecasting a million more jobs over the course of the parliament.

The OBR forecasts lower inflation. Osborne is asking the Bank of England to keep a watchful eye on volatility.

Next we get Osborne's economic roundup. He claims to be on course for a Budget surplus. He blames slowing global growth for the OBR's prediction of lower productivity growth, and says Britain is among the best prepared for the challenges ahead.

GDP forecast has been revised down to 2% this year, then 2.2% in 2017, and 2.1% a year for the following three years - but he emphasises that it's growing faster this year than any other developed country. He also took the claim to say this growth depends on EU membership.

As expected, Osborne opens with warnings. "The outlook for the global economy is weak" and there is a 'dangerous cocktail of risks'. This, he says, is why we need to 'act now', and 'hold to the course we set out'.

The Budget is running a bit late. Meanwhile, the BBC's Robert Peston has tweeted that there's a surprise in the Budget that Osborne expects will generate headlines.

As tension mounts ahead of Osborne's eighth Budget speech, and the debate intensifies, it's worth looking briefly at the announcements so far:

£4 billion of cuts. Osborne says he needs to cut 0.5% of all government spending to make ends meet.
Disability benefit cost. Personal Independence Payments could be cut by up to £150 a week.
Every school will become an academy by 2020 - changing the way schools are funded and forcing the vast majority of primary schools to change the way they are run. He will pledge £1.5 billion for this project.
Help to Save - a new savings scheme for people on low incomes. For every £1 they save, the government will add another 50p - up to £300 a year.
Infrastructure for the North - £300 million on transport projects for the North.
Tax crackdown - including public sector workers being paid through companies in order to avoid tax.
Higher minimum wage - a 50p boost in October to bring those in their early 20s closer to the Living Wage that those aged 25 and over are entitled to.
Higher tax threshold. The personal allowance will increase, and so will the higher rate tax threshold.
The Money Advice Service will be broken up - in favour of a smaller, cheaper, organisation

There have also been a number of rumours. Notably:

Pension annual and lifetime limits may be reduced
There may also be higher fuel duty and another rise in insurance premium tax.
Tobacco tax could rise.
Salary sacrifice schemes may be outlawed - or NI relief on employer pension contributions axed in order to make these schemes less worthwhile for employers to run.
There may be a new housing project announced

Budget 2016 Preview
Budget 2016 Preview

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