Budget Summary

Here are the main points of the budget delivered yesterday by Alistair Darling

Housing & Mortgages

The temporary increase in the nil rate stamp duty threshold to £175,000 will be extended to the end of the year. This means around 60% of all house purchases will be exempt.

£500 million will be provided to enable stalled housing developments to be completed

£100 million will be given to local government to build energy efficient housing.

£50 million will be spent on updating military housing.

An extra £80 million will be available to fund the Governments Homebuy Direct affordable housing schemes.

Household Budget

Duty on fuel to rise by 2p per litre from September, and a further 1p per litre above indexation each April for 4 years

2% added to duty on alcohol from today

2% added to duty on tobacco from 6pm yesterday (equivalent to 7p for 20 cigarettes)

Increase in winter fuel allowance to continue this year

Child tax credit to rise by £20 by 2010

Child trust funds for disabled children to rise by £100 a year, £200 a year for severely disabled children ISA limit to rise to than £10,200 (£5,100 max for Cash ISA’s) for those over 50 this year and for everyone else next year

State pension to be increased by at least 2.5%, regardless of inflation

Jobs

Statutory redundancy pay to be increased to £380 per week, a rise of £30

Those under 25’s, out of work for at least a year will be guaranteed a job, or training. Those in training will receive a top up on their benefits.

Tax

Currently 25% of pension tax relief goes to the top 1.5% of earners. From April 2011 those earning over £150,000 pa will have their tax relief cut.

The top rate of income tax for people earning in excess of £150,000 will rise to 50% from April next year.

The current 15% rate of VAT will continue until December

Economy

National debt will equate to 59% of GDP this year rising to 79% in 2013/14, before falling back from 2015/16.

Public borrowing in 2009/10 will reach £175 billion (13% of GDP) and £173 billion in 2010/11

The economy is expected to shrink by 3.5% this year, but grow next year by 1.25% and 3.5% in 2011

Inflation is expected to be 1% by the end of 2009.

Cost cutting

The Government expects to make an extra £9 billion in efficiency savings by 2013/14

General

New regulation to be introduced for banks and other financial institutions such as hedge funds, which will include tighter controls on liquidity.

Funds will be made available to provide an extra 54,000 6th form and further education places.

Unemployment grew by 137,000 in February and 74,000 in March

From June, until March 2010, motorists will receive a £2,000 discount when buying a new car when they scrap their current car which must be at least 10 years old. The old car must have been theirs for at least 12 months.

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