August 1 2015 Latest news:
Ben Woods, Business writer
Wednesday, March 19, 2014
George Osborne promised “a Budget for a resilient economy” as he prepared to make a pitch to ordinary working people.
The Chancellor is expected to unveil a further rise in the personal allowance above the £10,000 level promised by the coalition, and confirm heavily-trailed childcare subsidies among other measures to help those on lower and middle-incomes.
Aides stressed that despite the economic revival the package would be “steady as she goes”, and make little overall impact on the Government’s books.
But there were also hints that Mr Osborne could be preparing to produce a rabbit from his red box.
Potential surprise items include pushing up the level at which National Insurance contributions start being paid, or bowing to Tory demands for the 40% tax rate threshold to be raised.
Labour leader Ed Miliband said voters should expect “a Tory budget that claims our economy is fixed while families are £1,600 a year worse off”.
The Treasury has been given more room to manoeuvre by the stronger performance of UK plc over recent months, and some believe the Chancellor will be able to announce further upgrades to growth forecasts.
But Mr Osborne has insisted that he will not ease the Government’s long-running austerity programme in order to fund major giveaways - and he will also want to leave scope for a generous pre-election offering next year.
Some have been calling for him to encourage employment by extending the £2,000 NI allowance for firms who take on staff.
Another dramatic suggestion is to increase the NI threshold to match the personal tax allowance - which would chime with Mr Osborne’ s longer-term aspiration of merging the two systems.
There have been growing calls from the political right for the higher rate threshold to be hiked, after decades of below-inflation rises dragged millions more into paying 40%.
However, any significant action would be seized on by Labour as evidence that the Conservatives are the party of the better-off.
Mr Osborne is widely expected to maintain the freeze on fuel duty, and has also been under pressure to avoid increasing tax on wine and spirits - after scrapping the duty escalator on beer last year.
There will be an eye-catching move to replace the existing pound coin with a thruppeny bit style design to tackle a rise in the numbers of fakes of the present version in circulation - estimated to be 45 million.
“Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin,” Mr Osborne posted on Twitter along with a picture of the new design.
The Sun reported that tax on bingo halls will be cut from 20% to 15% in a bid to woo the game’s legions of female fans.
Labour is unveiling a Budget poster in London and Birmingham today that will claim “hard-working people are £1,600 worse off with the Tories”.
An image of the poster - featuring a nurse holding a red shopping bag with the slogan “We’ve all got budgets George” - was posted on Twitter by Mr Miliband.
“Today is going to see a contrast between a Conservative budget that claims our economy is fixed and family budgets that are £1,600 a year worse off since the general election,” he said.
“That’s why the top priority for the Budget today has to be to tackle the cost of living crisis that so many millions of families are facing.
“I hope we don’t see complacency from the Chancellor today because so many families across the country are incredibly hard pressed, they’re seeing their wages falling, they face 24 Tory tax rises since 2010.
“What I hope we see from the Chancellor is understanding of the difficulties families are facing and a response to make life easier and better for them.”
Paul Johnson, director of the Institute for Fiscal Studies, told BBC Radio 4’s Today programme: “The economy is getting a lot better now but it has been pretty bad for the last several years with the result that the Chancellor wanted the deficit essentially sorted by next year but actually it is not going to be until 2018.
“He’s set himself the task of getting down to zero borrowing by 2018 but we are still at over one hundred billion pounds so that’s a long way still to go.”
He added: “If the Chancellor does have any tax cuts, and he may well do, he’s going to be taking that back with his other hand, tax increases elsewhere or even deeper spending cuts.”
Stay on the site for live coverage of the budget.