Budget 2011

George Osborne springs fuel price surprise

 

George Osborne today announced plans to cut petrol duty by 1p per litre from six pm tonight and introduce a ‘fair fuel stabiliser’ to keep prices down over the longer term as part of a Budget he claimed would “reform Britain’s economy”.

Mr Osborne also announced plans to:

* Increase the amount people can earn without paying tax to £8,105 next year - representing a tax cut of £326 a year.

* Leave alcohol duties unchanged while increasing taxes on tobacco by 2 per cent above inflation.

* Freeze air passenger duty but impose it at a higher level for private jets.

* Spend £250 million on a new shared equity scheme which will help 10,000 first-time buyers purchase a newly built property, but who cannot afford the deposits.

* Allow people to leave 10 per cent of their income to charity when they die instead of paying it in tax.

* Find an extra £100 million for the repair of winter potholes in roads.

* Introduce new tax avoidance measures to save £1 billion a year.

* The total cost of Libyan operations will paid for out of Treasury reserves.

Much of Mr Osborne’s hour long speech was dedicated to outlining a range of tax and business reforms which he said would help business grow and encourage new investment in Britain.

These included cutting corporation tax by 2 per cent and eventually reducing it to 23 per cent – the lowest in the G7 as well as a proposal to merge income tax and national insurance contributions.

At the same time Mr Osborne painted a gloomier picture of the UK's economy than he had done previously and admitted the recovery would move at a slower pace than he had thought.

Based on figures from the Office for Budget Responsibility – the body the Tories created to provide independent economic forecasts - Mr Osborne said GDP growth estimates for 2011 had been cut from 2.1 per cent to 1.7 per cent, while 2012 was revised down to 2.5 per cent from 2.6 per cent.

However, he said in the longer term the outlook was more optimisitc as estimates for 2013 were held and forecasts for 2014 and 2015 were revised upwards to 2.9 per cent from 2.8 per cent and 2.8 per cent from 2.7 per cent respectively.

The Chancellor also revealed the rate of inflation, currently at 4.4 per cent, is not expected to drop back to the Government's two per cent target until 2013 - contrary to the Bank of England's belief it will fall back by 2012.

But the most surprising announcement was on fuel duty.

A new Fair Fuel Stabiliser to be introduced, funded by increasing the supplementary charge on North Sea oil and gas production from 20 per cent to 32 per cent from tomorrow.

The Stabiliser means the inflation rise in duty planned for next week will be delayed until next year while the April 2012 inflation rise will also be put back until the following summer.

The fuel duty escalator which adds an extra 1p on top of inflation every year will also be axed for the rest of the parliament.

However experts said the amount raised by the Treasury from the new tax would be greater than the amount passed on to motorists.

Mr Osborne also announced a raft of measures he said would make the UK the best place in Europe to start, finance and grow a business.

He confirmed a shake-up in planning regulations which will make all bodies involved in planning give priority to growth and jobs.

There will also be 21 new Enterprise Zones created where firm will be liable to tax relief and other benefits.

He confirmed the creation of a Green Investment Bank and pledged another £2 billion of funding, on top of the £1 billion already committed. However it will not be properly functioning as a bank for another few years as it will not be allowed to borrow on the money markets. Instead it will have to rely on central Government for funds.

On education he announced a doubling of the number of planned new University Technical Colleges from 12 to 24.

There will be a new squeeze on non-doms who have been accused of avoiding their fair share of tax using their special tax status.

The last government introduced a £30,000 charge for those who had lived here for seven years.

Mr Osborne said he was increasing the charge to £50,000 for non-doms who have been in the country for 12 years, a move he said would raise over £200 million in the coming years.

Mr Osborne's second budget was greeted by cheers on the coalition benches but was damned by Labour leader Ed Miliband,

He said: “It is the same old Tories. It is hurting but it isn't working”

www.twitter.com/oliver_wright

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
News
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Sport
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
News
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
News
people

Watch the spoof Thanksgiving segment filmed for Live!
Sport
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
books
Sport
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
News
i100 Charity collates series of videos that show acts of kindness to animals
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Opilio Recruitment: QA Automation Engineer

£30k - 38k per year + Benefits: Opilio Recruitment: An award-winning consume...

Opilio Recruitment: UX & Design Specialist

£40k - 45k per year + Benefits: Opilio Recruitment: A fantastic opportunity ...

Opilio Recruitment: Publishing Application Support Analyst

£30k - 35k per year + Benefits: Opilio Recruitment: We’re currently re...

Opilio Recruitment: Digital Marketing Manager

£35k - 45k per year + benefits: Opilio Recruitment: A fantastic opportunity ...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game