UK chancellor George Osborne is presenting the 2013 Budget to parliament at 12:30 GMT (8:30 a.m. ET).
Osborne, who joined Twitter this morning, is widely expected to stick to his plans and deliver more austerity even as the country has been stripped of its AAA rating and teeters close to a triple dip recession.
Osborne already asked most departments to cut their budgets by an additional 1 percent in 2013 and 2014, thereby freeing up £2.5 billion for capital spending. In December, he announced cuts of 1 percent in 2013-2014, and 2 percent in 2014-2015, to the budgets of various departments.
We will have the highlights here.
George Osborne has begun speaking at Parliament. He began by saying, "This is a budget for people who aspire to work hard and get on." Osborne sees a budget for people who want to own homes. Osborne is being booed by members of parliament.
The Office of Budget Responsibility (OBR) now expects 600,000 more jobs and 60,000 fewer claiming unemployment benefits.
It sees a budget deficit at 7.4 percent of GDP. Public debt is expected to reach 79.5 percent of GDP in 2013.
GDP is expected to rise 0.6 percent in 2013, compared with 1.2 percent in the autumn statement, and 1.8 percent in 2014, from 2 percent in the AS.
Bank of England's Remit
Osborne as expected revealed a review of the remit. This would recognize use of unconventional tools and the MPC could issue explicit forward guidance and has asked the Bank of England to assess the benefit of forward guidance. He said Mervyn King and incoming BoE governor Mark Carney have seen the remit and agreed to it.
Yesterday, we saw activists campaigning to ensure that Osborne stuck to his promise to contribute to international aid. Osborne just confirmed that the UK will spend 0.7 percent of GDP on international aid.
Osborne said there will be tax relief for shale gas. Interestingly, he said the ceramic industry would be exempt from climate change taxes on energy costs.
Osborne says main corporate tax will be lowered to 20 percent in 2015. He says, "Britain is open for business."
Beer duty escalator scrapped. Osborne said he was cutting beer duty by one pence, "a penny off the pint". But there will be increases in on all other types of alcohol.
Osborne said he wants to support jobs. He said the final tax cut is the biggest in the Budget. The new employment allowance will cut national insurance bills by £2,000 per employee. That means 450,000 small businesses will pay no jobs tax.
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- Politics & Government
- Budget, Tax & Economy
- George Osborne