LONDON, March 19 (Reuters) - British finance minister George Osborne presented his annual budget statement to parliament on Wednesday.
Following are highlights from his speech:
“We are going to have a 7 billion pounds package to cut energy bills for British manufacturers - with benefits for families and other businesses too.”
”Next year there will be no income tax at all on the first 10,500 pounds of your salary.
“Ten and a half thousand pounds tax free. 800 pounds less in tax every year for the typical taxpayer. Our increases in the personal allowance will have lifted over 3 million of the lowest paid out of income tax altogether.”
”There is a 10 pence starting rate for income from savings. It is complex to levy and it penalises low-income savers. Today I am abolishing the 10 pence rate for savers altogether.
”And we will almost double this zero-pence band to cover 5,000 pounds of saving income. One and a half million low- income savers of all ages will benefit.
“Two thirds of a million pensioners will be helped. ”
”I am announcing today that we will legislate to remove all remaining tax restrictions on how pensioners have access to their pension pots.
”Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want. No caps. No drawdown limits.
“Let me be clear. No one will have to buy an annuity.”
TAX RELIEF ON ISAs
“We will make ISAs simpler by merging the cash and stocks ISAs to create a single New ISA.”
“We are going to make the new ISA more generous by increasing the annual limit to £15,000.”
“£15,000 of savings a year tax free - available from the first of July.”
”I can also confirm today that the higher rate threshold will rise for the first time this Parliament, from 41,450 pounds to 41,865 pounds next month, and then by a further 1 percent to 42,285 pounds next year.
“And because I am also passing the full benefit of today’s personal allowance increase on to higher rate taxpayers - people earning 42,000, 43, 50, 60, all the way up to 100,000 pounds will be paying less income tax because of this Budget.”
”Scottish Whisky is a huge British success story. To support that industry, instead of raising duties on whisky and other spirits, I am today going to freeze them.
”And with some cider makers in the West Country hit hard by the recent weather, I am going to help them by freezing the duty on ordinary cider too.
“And then there’s beer. I know the industry, led so ably by my Honourable Friend for Burton, have been campaigning for a freeze. But beer duty next week will not be frozen. It will be cut again by 1 pence.”
”Turning to gambling duties.
”Fixed odds betting terminals have proliferated since gambling laws were liberalised almost a decade ago.
”These machines are highly lucrative, and therefore it’s right we now raise the duty on them to 25 percent. We will also extend the horserace betting levy to bookmakers who are based offshore.
“And we’ll look at wider levy reform and at introducing a ‘racing right’ to support the sport.”
”In 2012 I increased the Annual Investment Allowance ten-fold to 250,000 pounds. This generous allowance was due to expire at the end of this year - and all the business groups have urged me to extend it.
“So we will. But we’ll do more. We’re going to double the Investment Allowance to 500,000 pounds, extend it to the end of 2015, and start it next month.”
“We will expand the tax on residential properties worth over 2 million pounds to those worth more than 500,000 pounds.”
(Homes exceeding 500,000 pounds will now be subject to higher 15 pct stamp duty IF they are bought by a company)
”We will introduce now a new allowance for ultra high pressure, high temperature fields to support billions of pounds of investment, thousands of jobs and a significant proportion of our energy needs.
”Even with these measures, the North Sea is a mature basin - and the OBR have today revised down the forecast tax receipts by a further 3 billion pounds over the period.
”The Scottish economy is doing well and jobs are being created.
”But this is a reminder of how precarious the budget of an independent Scotland would be. These further downgrades in the tax receipts would leave independent Scots with a shortfall of 1,000 pounds per person.
“Britain is better together.”
“From next year, all long-haul flights will carry the same, lower, band B tax rate that you now pay to fly to the United States.”
”Our exports have grown each year and the OBR today forecast rising export growth in the future. But we’re starting from a low base and we’ve got many lost years to catch up.
”For decades the British government has been the last port of call, when we should be backing British businesses wanting to sell abroad.
“Today we fundamentally change that. And we’re going to start with the finance we provide our exporters. We will double the amount of lending available to 3 billion pounds.”
“While the vast majority of wealthy people pay their taxes, there is still a small minority who do not. We will now require those who have signed up to disclosed tax avoidance schemes to pay their taxes, like everyone else, up front.”
“While for now the OBR do not expect the situation in Ukraine to have a large impact on us, they do warn that an escalation risks higher commodity prices, higher inflation and lower growth.”
”We must bring our national debt substantially down.“ ”Analysis published today shows just running a balanced current budget does not secure that. Instead, Britain needs to run an absolute surplus in good years.
”So I can confirm that in addition to the cuts this year and next, there will be cuts in the next Parliament too.
“To lock in our country’s commitment to this path of deficit reduction we will seek the support of Parliament in a vote. And I will bring forward a new Charter for Budget Responsibility this autumn.”
”We are entering a critical phase and we must learn from the past. Every time a post-war government has embarked on public spending cuts, real spending has risen back to its previous heights within three years.
”And sure enough there are those today who say: ease up, spend more, borrow more. That would mean debt rising towards 100 percent of GDP - undermining growth.
”It would be a huge mistake and we are not going to let that happen. Many Chancellors, faced with a recovering economy and improved borrowing forecasts before an election, would be tempted to squander the gains.
“I will not do that today. These gains were hard won by the British people - and we’re not going to jeopardise their economic security.”
”I today re-confirm my remit for the Monetary Policy Committee, including the target of 2 percent CPI inflation - which the OBR expect will be met this year, next year and in the years ahead.
“Although the OBR forecast that house prices will remain below their real-terms peak until at least 2018, I have asked the Committee to be particularly vigilant against the emergence of potential risks in the housing market.”
”Britain was borrowing 157 billion pounds a year before we came to office. This year we expect to borrow 108 billion pounds. That’s 12 billion pounds less than forecast a year ago.
”In 2014-15 the (OBR) say it will fall to 95 billion pounds. Then it falls again to 75 billion pounds in 2015-16, then 44 billion pounds, then down to 17 billion pounds.
”In 2018-19 we won’t be borrowing at all. We will have a small surplus of almost 5 billion pounds.
“Taken together, these new figures mean Britain will be borrowing 24 billion pounds less than was forecast.”
”I can tell the House that the Office for Budget Responsibility have revised down the underlying deficit in every year of their forecast. Before we came to office the deficit was 11 percent.
”This year they say it will be 6.6 percent - lower than forecast and down a third.
”Next year, 5.5 percent - down a half.
“Then it will fall to 4.2 percent, 2.4 percent and reach 0.8 percent in 2017-18. In 2018-19, they are forecasting no deficit at all - instead, at plus 0.2 percent, a small surplus.”
”Today the OBR forecast growth in 2014 of 2.7 percent. That’s the biggest upward revision to growth between Budgets for at least 30 years.
“Growth next year is also revised up to 2.3 percent. Then it’s 2.6 percent in 2016 and 2017. And with the output gap closed around a year earlier than previously predicted, growth returns to around its long-term trend, at 2.5 percent in 2018.”
“The deficit is down by a third. Now in the coming year it will be down by a half. But it is still one of the highest in the world - so today we take further action to bring it down.”
”I can report today that the economy is continuing to recover - and recovering faster than forecast.
“But the job is far from done. Our country still borrows too much.” (UK economics team)