Budget '11 Chancellor of the Exchequer George Osborne told the House of Commons that today's Budget was about reforming the UK economy and helping families deal with rising living costs.
He said it marked a move from rescue to recovery. He claimed the changes had already brought stability to the British economy.
Osborne said the credibility of his cuts programme was shown when UK interest rates are compared with those of other nations.
The Chancellor said the growth forecast for 2011 was down to 1.7 per cent thanks to a weak last quarter of 2010, as well as higher inflation and commodity prices. Osborne said he hopes to see inflation of between 4 and 5 per cent.
Sandwiched between Clegg and Cameron, the Chancellor said he was keeping an inflation target of 2 per cent based on the Consumer Price Index (CPI).
He said Britain's tax code needed reforming to make it simpler, shorter and easier. The Budget will abolish some 43 tax reliefs, a start to this simplification.
From April 2012, the CPI will be used to update tax codes.
Osborne said national insurance and income tax were an expensive burden on employers, and employees. The Treasury will therefore consult on bringing the two together. He expects the process to take several years.
On company tax, Osborne promised to reform complex rules for controlled foreign companies.
Corporation tax will go down in April by 2 per cent and will continue to go down by 1 per cent a year for three years – making it the lowest in G7, Osborne claimed.
But Osborne said he would adjust the bank levy rate in order to ensure that the bankers don't receive the benefit of that cut.
Lord Young's ideas for health and safety will be introduced.
All businesses with less than 10 employees will have the benefit of a three-year moratorium on new domestic employment laws.
Osborne will also act on planning, and increasing expenses for local authorities.
He said small businesses were innocent victims of the credit crunch, and has negotiated with banks for a 15 per cent increase in capital.
Income tax relief goes from 20 per cent to 30 per cent.
Entrepreneur relief is doubled to £10m. The 50p tax rate remains, although the Chancellor said it remained a temporary measure.
Non-doms will be expected to pay a £50,000 charge if they have been in the UK more than 12 years. But the charge will be removed if money is brought into the UK for investment.
The rate relief holiday for small businesses is extended until October 2012.
Osborne promised to consult on reforming intellectual property laws.
He said he'd listened to James Dyson and planned to support research and development in smaller firms.
From April, small firms' R&D budget will go up 200 per cent this year and next.
Osborne will also double the capital limit on assets.
He will fund 21 enterprise zones, which will be announced in the summer – and London mayor Boris Johnson gets to choose one for the capital.
You will soon be able to read the full speech here. ®