Financial Statement and Budget Report

Budget 2013 announces further detail on the Government's deficit reduction plans, new steps to ensure monetary policy continues to support the economy (including a new remit for the Monetary Policy Committee), and further measures to ease the long-term pressure on the public finances. Central government departmental expenditure limits will be reduced by GBP1.1 billion in 2013-14 and GBP1.2 billion in 2014-15, with the funds used to support housing. Schools and health budgets remain unchanged. Public sector pay awards will be limited to an average of 1 per cent. Budget 2013 is fiscally neutral. Action to promote growth includes: a reduction in corporation tax by 1 per cent in April 2015; from April 2014 giving businesses and charities an entitlement to a GBP2000 employment allowance per year towards their employer National Insurance contributions, designed particularly to help small businesses; capital spending increase by GBP3 billion a year; providing GBP1.6 funding to support strategies in 11 key sectors; creation of a Single Local Growth Fund; introduce a new housing scheme, Help to Buy comprising an extension of the First Buy scheme and mortgage guarantee for lenders who offer mortgages to people with a deposit of between 5 and 20 per cent on homes with a value up to GBP600,000; reducing the qualifying period for Right to Buy; doubling the existing affordable homes guarantee programme, to support a further 15,000 affordable homes in England by 2015.Other measures include: first GBP10,000 of income to be tax free in 2014-15; cancellation of planned fuel duty increases; a new tax-free Childcare Scheme and increased child support in Universal Credit; implement the GBP72,000 cap on reasonable social care costs; reduce beer duty by 2 per cent; crackdown on tax avoidance, with the Isle of Man, Guernsey and Jersey entering into tax information exchange agreements.