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The Budget 2013 as it happened

The Chancellor delivered his hotly anticipated budget at 12.30GMT on 20th March, covering a variety issues related to the UK economy. We bring to you the main points from that were raised, and explain how these are likely to affect you.

12.30pm: Budget 2013 begins:

Prime Minister, David Cameron hands over to the Chancellor of the Exchequer, George Osborne, and the Budget begins.

12.33pm: Budget 2013 introduction:

The Chancellor introduces the Budget and sets the scene for things to come. Among the shouts of ‘order’ from the Speaker, we make out Osborne explaining how economic recovery is “taking longer than anyone hoped” and how he is about to deliver a “Budget for our aspiration nation”. The Budget starts in farcical circumstances, with constant shouting and groans from both sides of the House, forcing the Speaker to interrupt Osborne twice.

12.38pm: Cyprus:

Osborne refers to the much publicised financial issues currently facing Cyprus, commenting: “The problems in Cyprus show the economic crisis is far from over”.

12.39pm: Britain to avoid recession:

Office for Budget Responsibility (OBR): “Britain will avoid second quarter of negative growth”. The OBR also expects 600,000 more jobs to created in 2013.

12.40pm: Growth forecast:

Growth forecast for the next five years is released:

2013 – 0.6%
2014 – 1.8%
2015 – 2.3%
2016 – 2.7%
2017 – 2.8%

The 0.6% growth forecast over the next year is half of what was predicted in the autumn Statement.

12.41pm: Borrowing forecast:

Borrowing forecasts are announced:

2012-2013 - £114bn
2013-2014 - £108bn
2014-2015 - £97bn
2015-2016 - £87bn
2016-2017 - £61bn
2017-2018 - £42bn

12.54pm: Public sector pay:

Osborne: “Public sector pay freezes and cuts are fair”. Those paid by the tax payer can expect stagnant wages as well as pay cuts over the next year after it is deemed that this notion is ‘fair’.

13.02pm: Low emission vehicles:

New tax incentives are offered to those buying ultra-low emission vehicles. Companies which buy these as company cars for employees will benefit from the 100% first year tax allowance. There will also be new company car tax rates for the lowest emission cars.

13.07pm: Corporation tax:

Corporation tax is reduced to 20% from April 2015. Osborne explains how this will make corporation tax in the UK the lowest of any major economy in the world, in a move that shows the UK is “open for business”.

13.10pm: Childcare:

Tax free childcare is offered by the Chancellor. Working families will receive up to £1200 per annum, per child in benefits.

13.14pm: Social care:

Social care costs for the elderly to be capped at £72,000 from 2016.

13.15pm: Help to Buy:

Osborne announces ‘Help to Buy’, a new scheme aimed giving the housing industry a boost.

There are two parts to the Help to Buy scheme:

1. Equity loans will be available to would be buyers, which will be worth up to 20% of the value of the home. These loans will be interest free for the first five years, and can be acquired for homes worth up to £600,000. Essentially this means that buyers will be able to take out a mortgage for just 75% of the worth of the property, provided they are able to stump up a deposit of 5%. An example of this is below.

House Price - £300,000
Deposit Amount – 5% (£15,000)
Help to Buy – 20% (£60,000)
Mortgage – 75% (£225,000)

2. The second part of the Help to Buy scheme has been called the ‘mortgage guarantee’. The idea behind this is to help those with low deposit mortgages obtain a home loan. The Government will guarantee £12bn to lenders, which it said will in turn will be enough to support £130bn of high loan-to-value mortgages.

13.19pm: Fuel duty:

The Chancellor announces that the fuel duty increase planned for September will be abolished. This freeze in duty coupled with that of the last two years, has made petrol 13p a litre cheaper than if caps had not been imposed, and this equates to a saving of £7 per tank for those filling up a Ford Focus or Vauxhall Astra, according to the Chancellor.

13.20pm: Alcohol duty:

The planned duty increase on alcohol will go ahead, apart from on Beer, which will be cheaper by 1p per pint. The government has long been battling the price of cheap booze, while on the other hand has a responsibility to keep as many of Britain’s pubs open as possible.

13.23pm: Income tax:

Income tax personal allowance has been increased to £10,000, and will come into effect in April 2014. This will mean those earning wages below £10,000 will not pay income tax.

13.26pm: Employment allowance:

A new employment allowance is announced, cutting National Insurance contributions paid by firms. This is aimed at small and medium enterprises (SME’s), and it is hoped that the move will encourage them to hire new staff and expand their workforce.

13.31pm: The Budget 2013 ends

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