Budget 2014: As it happened

George Osborne has been urged to reject 'continued cuts and austerity'. Picture: Getty

PRESS CTRL+F5 to get the very latest from Chancellor George Osborne’s Budget speech

• 2:04pm: We’ve taken a look at the specific implications for Scotland of the 2014 Budget - click the link for more analysis.

• 1:50pm: In need of a rundown of the key points from today’s Budget? Check out our at-a-glance guide to how it will affect your pay packet, pension, and more.

• 1:40pm: Ed Miliband says today’s budget shows the “same old Tories”, with the Lib Dems backing Tory measures “all the way”.

• 1:38pm: Labour leader Ed Miliband says that in his hour-long statement, the Chancellor “did not mention one central fact - the working people of Britain are worse off under the Tories, living standards down month after month, year after year”.

• 1:35pm: Analysis from our political editor Tom Peterkin: ‘George Osborne was in defiant mood presenting his “makers, doers and savers” budget. It’s clear that he feels signs of recovery have justified austerity. There was little on Scotland, apart from a warning on falling oil revenues and what he sees as consequent dangers of independence, and a widely-trailled scrapping of whisky duty escalator. Looks as if Ed Miliband will focus on the cost of living crisis in his response.”

• 1:33pm: Andrew Whitaker writes that the Chancellor is pursuing a “tax cutting” agenda that the Tories clearly view as potentially election-winning. Osborne called himself a “tax cutting Conservative” ahead of the budget and to an extent he has fired the starting gun on next year’s election campaign. Labour will almost certainly respond by seeking to move the debate onto the territory of ‘fair tax’ versus ‘unfair tax’ by criticising the Tories for slashing the top rate of tax, at the same time as it pursues policies such as the Bedroom Tax.

• 1:32pm: The abolition of 10p starting rate of tax on income from savings is Osborne’s final announcement, as the Chancellor takes his seat to await Ed Miliband’s response.

• 1:30pm: Osborne concludes with more on pensions - All tax restrictions on pensioners’ access to their pension pots will be removed, ending the requirement to buy an annuity. There will be a £20 million fund to develop new free right to advice for those retiring on defined contribution pensions, and the tax rate on cash taken out of pension pots on retirement to be reduced from 55% to 20%.

• 1:29pm: A new Pensioner Bond will be introduced, paying market leading rates. It will be available from January to all over 65s, with possible rates of 2.8% for a one-year bond and 4% for a three-year bond.

• 1:28pm: The Chancellor is pursuing a budget for “savers” voters with saved income and nest eggs, writes Andrew Whitaker. It is part of a strategy aimed at winning over what the Tories see as thrifty and “hard working” families at the next election.

• 1:27pm: The cash and stocks ISAs to be merged into single New ISA with annual tax-free savings limit of £15,000 from July 1. The limit for the Junior ISA will be raised to £4,000.

• 1:25pm: More on changes to income tax - the higher rate threshold for 40p income tax will rise from £41,450 to £41,865 next month, and then by a further 1% to £42,285 next year. Transferable tax allowance for married couples is set to rise to £1,050.

• 1:25pm: On apprenticeships, George Osborne has set out plans to extend grants for small businesses to support 100,000 more apprenticeships. As this power is devolved to the Scottish Parliament, Andrew Whitaker writes, Holyrood will receive consequential funding from this announcement. The SNP government has heavily promoted similar schemes, such as the small business bonus scheme.

• 1:23pm: The personal tax allowance is to be raised to £10,500 next year. This will result in an £800 income tax reduction for the typical taxpayer, says Osborne.

• 1:18pm: More from Andrew Whitaker on the North Sea oil announcements. Osborne says: “These further downgrades in the tax receipts would leave independent Scots with a shortfall of £1,000 per person.” In this last budget before the Scottish independence referendum it was inevitable Mr Osborne would make reference to the economic case against independence. We have yet to hear any reference to a currency union, which the Chancellor ruled out during a speech in Edinburgh last month.

• 1:17pm: Tobacco duty will continue to rise at 2% above inflation, but Scotch Whisky duty will be frozen. Duty on beer is down by 1p a pint. Our Andrew Whitaker says the appeal to win the support of the nation’s drinkers will be welcomed by industry bosses and pubgoers, but whether it ever makes any significant difference at an election remains to be seen.

• 1:16pm: Some of the tax announcements so far: Loss-making small businesses will see their research and development tax credits go up from 11% to 14.5%. Social investment tax relief is fixed at 30%. From September, there will be a 20% tax relief for theatre productions, and 25% for regional touring. Collection of class 2 national insurance contributions is to be moved to self-assessment, removing red-tape for 5 million people.

• 1:15pm: The 2% increase in company car tax is to be extended to 2017 and 2018, with increased discount for ultra-low emission vehicles.

• 1:13pm: On transport, Osborne seems to be hinting at the HS2 high-speed rail link heading as far as Crewe in its first phase, writes our David Maddox. Follow him on Twitter for more analysis.

• 1:10pm: George Osborne says he will extend the help-to-buy scheme to thel end of the decade as part of a drive to expand home ownership, writes Andrew Whitaker.

The Chancellor will be hoping the move plays well with aspiring homeowners struggling to get onto the property ladder. It appears to be an early election pitch in this penultimate budget before the 2015 general election.

• 1:09pm: The government is to take forward all recommendations of Wood Report into North Sea oil and gas, confirms the Chancellor. He adds that the government will review the sector’s tax regime, and reveals that the OBR have revised down their forecast for tax receipts from the North Sea by £3 billion.

• 1:07pm: Air Passenger Duty is to be cut to UK-to-USA levels on all long-haul flights, with flights by private planes brought into the tax system for the first time.

• 1:05pm: The Scottish independence debate rears its head in the budget, as Osborne says oil and gas revenues going down is “reminder of how precarious the economy of an independent Scotland would be”.

• 1:04pm: The government is to fund the Survivors For Peace charity set up by IRA victim Tim Parry’s parents to support scholarships for people of Lockerbie to study in the USA.

• 1:02pm: Fines issued to banks involved in fixing the LIBOR interbank lending rates will be used to support search and rescue and lifeboats and provide £10 million to scouts, guides, cadets and St John’s Ambulance.

• 1:01pm: Osborne touts measures against tax avoidance, including an increase in HMRC’s budget to tackle non-compliance, block on transfers of profits within groups, and increased tax credit debt recovery rates.

• 1:00pm: Individuals signed-up to disclosed tax avoidance schemes will be required to pay their taxes upfront, and there will be 15% stamp duty on those buying houses worth over £500,000 through a corporate envelope.

• 12:58pm: The UK Government’s welfare cap is to be set at £119 billion for 2015/16, rising to £127 billion by 2018/19, with only the state pension and cyclical unemployment benefits excluded. Osborne has also pledged a £1 billion reduction in departmental overspends.

• 12:55pm: More on those cuts - the coalition is to hold a Parliamentary vote for a deficit reduction path which would mean cuts this year and next, continuing past the general election.

• 12:52pm: The 2% inflation target remains, says the Chancellor, with The Bank of England’s financial policy committee asked to be “particularly vigilant against the emergence of potential risks in the housing market”.

• 12:51pm: More detail on the national debt forecast - it’s been revised down to 74.5% of GDP this year, then 77.3% next year, reaching a peak of 78.7% in 2015/16 and falling to 78.3%, 76.5% and 74.2% in following years.

• 12:49pm: Osborne says Government “will fix the roof while the sun is shining”. Cuts and austerity measures will continue.

• 12:46pm: The UK is set to save £42 billion in debt interest - around £2,000 per family, says Osborne. OBR predict borrowing will fall to £95 billion in 2014/15, then £75 billion, £44 billion and £17 billion in subsequent years with a surplus of almost £5 billion in 2018/19.

• 12:45pm: Osborne says the OBR are forecasting 1.5 million more jobs over the next five years, with earnings to grow faster than inflation this year and in every year of their forecast.

• 12:43pm: To put that earlier revision of the growth forecast in context, it means that the UK economy will be £16 billion larger than the OBR predicted it would be four months ago.

• 12:41pm: Osborne says the coalition’s economic plan is delivering jobs - he cites a record number of women in work, and an unemployment rate that is now lower than in the USA.

• 12:38pm: The Office of Budget Responsibility have revised their growth forecast, predicting 2.7% growth for the UK economy next year, says Osborne - the biggest upward revision for “at least 30 years”. The UK’s budget deficit will be down “by a half” in the coming year, says the Chancellor, but it remains “one of the highest in the world”.

• 12:35pm: George Osborne gets his Budget speech underway, saying that plans will back savers, manufacturers, and “all regions of our country”.

• 12:20pm: David Cameron is answering Prime Minister’s Questions in the Commons - the Budget statement is due to begin in around ten minutes’ time.

• 12:00pm: George Osborne has arrived at the House of Commons to a rousing reception from Tory backbenchers, according to David Maddox. He’s gone for a sombre grey tie, as opposed to the green of last year.

• Follow @TheScotsman on Twitter, search for #scotsmanbudget for the very latest, and follow our politics writers David Maddox and Andrew Whitaker for more analysis from Westminster and Holyrood

Earlier

Finance Secretary John Swinney made his plea to the UK Government before the Chancellor delivered his Budget statement today.

With voters in Scotland due to decide if the country should stay in the UK or not in September, the Finance Secretary also claimed a No vote in the referendum could lead to cuts in spending north of the border.

But he said a vote in favour of independence would allow the Scottish Government to “end Westminster’s austerity agenda, tackle the economic challenges Scotland faces and build a fairer more prosperous country”.

Mr Swinney said: “This is Westminster’s last chance to seriously tackle inequality and turn away from a budget of continued cuts and austerity before Scotland votes in the referendum.

“Scotland is a wealthy country and we can more than afford to be independent. In each of the last 33 years Scotland has paid more in tax per head than the UK and in the last five years Scotland would be £1600 per head better off than the UK - money that could have been invested in the economy, in public services and reducing debts.

“Instead under Westminster we have seen capital spending cut by almost 27 per cent and our overall discretionary spending power cut by 11% in real terms over the five years to 2015-16.

“We know that we are not even halfway through the cuts planned by Westminster, and that the Chancellor plans a further £12 billion of cuts to welfare after the next election.”

‘Budget for a resilient economy’

The Chancellor took to Twitter ahead of the Budget, writing: “Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin.”

Mr Osborne is expected to unveil a further rise in the personal allowance above the £10,000 level promised by the coalition, and confirm heavily-trailed childcare subsidies among other measures to help those on lower and middle-incomes.

Aides stressed that despite the economic revival the package would be “steady as she goes”, and make little overall impact on the Government’s books.

But there were also hints that Mr Osborne could be preparing to produce a rabbit from his red box.

Potential surprise items include pushing up the level at which National Insurance contributions start being paid, or bowing to Tory demands for the 40% tax rate threshold to be raised.

Labour leader Ed Miliband said voters should expect “a Tory budget that claims our economy is fixed while families are £1,600 a year worse off”.

The Treasury has been given more room to manoeuvre by the stronger performance of UK plc over recent months, and some believe the Chancellor will be able to announce further upgrades to growth forecasts.

But Mr Osborne has insisted that he will not ease the Government’s long-running austerity programme in order to fund major giveaways - and he will also want to leave scope for a generous pre-election offering next year.

There will be an eye-catching move to replace the existing pound coin with a thruppeny bit style design to tackle a rise in the numbers of fakes of the present version in circulation - estimated to be 45 million.

“Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin,” Mr Osborne posted on Twitter along with a picture of the new design.

The Sun reported that tax on bingo halls will be cut from 20% to 15% in a bid to woo the game’s legions of female fans.

Labour is unveiling a Budget poster in London and Birmingham today that will claim “hard-working people are £1,600 worse off with the Tories”.

An image of the poster - featuring a nurse holding a red shopping bag with the slogan “We’ve all got budgets George” - was posted on Twitter by Mr Miliband. “Today is going to see a contrast between a Conservative budget that claims our economy is fixed and family budgets that are £1,600 a year worse off since the general election,” he said.

“That’s why the top priority for the Budget today has to be to tackle the cost of living crisis that so many millions of families are facing.

“I hope we don’t see complacency from the Chancellor today because so many families across the country are incredibly hard pressed, they’re seeing their wages falling, they face 24 Tory tax rises since 2010.

“What I hope we see from the Chancellor is understanding of the difficulties families are facing and a response to make life easier and better for them.”

Paul Johnson, director of the Institute for Fiscal Studies, told BBC Radio 4’s Today programme: “The economy is getting a lot better now but it has been pretty bad for the last several years with the result that the Chancellor wanted the deficit essentially sorted by next year but actually it is not going to be until 2018.

“He’s set himself the task of getting down to zero borrowing by 2018 but we are still at over one hundred billion pounds so that’s a long way still to go.”

He added: “If the Chancellor does have any tax cuts, and he may well do, he’s going to be taking that back with his other hand, tax increases elsewhere or even deeper spending cuts.”