LONDON, March 23 (Reuters) - British finance minister George Osborne delivered his budget for the 2011/12 fiscal year to parliament on Wednesday.
Following are highlights from his statement.
“From tomorrow the supplementary charge levied on oil and gas production will increase from 20 percent to 32 percent.”
“I am today cutting fuel duty by 1 penny per litre. This will take effect in petrol stations from 6pm tonight.”
“The fuel duty escalator that adds an extra penny on top of inflation every year will be cancelled — not just for this year, or next year — but for the rest of this Parliament. But I don’t want important investment in the North Sea lost. So if the oil price sustains a fall below $75, and we will consult on the precise figure, we will reintroduce the escalator and reduce the new oil tax in proportion.”
“We can introduce a Fair Fuel Stabiliser. From tomorrow the supplementary charge levied on oil and gas production will increase from 20 percent to 32 percent.
“We will delay the inflation rise in duty planned for next week until next year — and also delay the April 2012 inflation rise until the following summer.”
“I have no further changes to announce to the rates of alcohol duty put in place by the previous government.”
“We think it would be fair to delay this April’s Air Passenger Duty rise to next year.”
“We currently estimate this new single-tier state pension would be worth around 140 pounds per week. It will not apply to current pensioners — and it will take years fully to come into effect.”
“The second bold step we take today is the creation of the Green Investment Bank, to support low-carbon investment where the returns are too long-term or too risky for the market. We’ve already committed a billion pounds to it. Today I commit two billion pounds more, funded from asset sales and underwritten by the Treasury. This will enable the Green Investment Bank to start operation one year earlier than planned — in 2012.
“It will leverage an additional 15 billion pounds of private sector investment in green projects over this Parliament.”
“Today we become the first country in the world to introduce a carbon price floor for the power sector.”
“At the same time I am extending the Climate Change Agreements to 2023, and increasing the Climate Change Levy discount on electricity for those who sign up from 65 percent to 80 percent from April 2013.”
“In Northern Ireland, tomorrow the Treasury will publish a paper on how we help their private sector to grow. To deal with the unique issues posed by the Irish Republic’s business tax regime, it considers the case for Northern Ireland having an even lower rate of corporation tax than the rest of the UK.”
“There has been reports that we would be able to fund 10 new Enterprise Zones. Today I confirm that instead we will fund instead 21 new Enterprise Zones.”
R&D TAX CREDIT AND CAPITAL ALLOWANCES:
“From April this year the small companies Research and Development Tax Credit will rise to 200 percent — and from next year it will rise again to 225 percent. We also want to encourage manufacturers to invest in the latest machinery and technology. So I propose to double the limit on the capital allowances for short life assets from four years to eight years.”
“From the proceeds of this year’s bank levy we will fund a 250 million pound commitment to first-time buyers. A new shared equity scheme, First Buy, will be available for first-time buyers who want to purchase a newly built property, but who cannot afford the high deposits. This will help 10,000 families get on to the housing ladder for the first time.”
“I am clear that the 50 pence tax rate would do lasting damage to our economy if it were to become permanent.”
“From April this year, income tax relief will increase from 20 percent to 30 percent. Next year we will double the amount that any individual can invest through the EIS (the Enterprise Investment Scheme), increase the size of company that can qualify for investment — and raise the limit on the amount that can be invested in a company by 400 percent.”
“From April this year corporation tax will be reduced not just by 1 percent as I previously announced but by 2 percent. And it will continue to fall by 1 percent in each of the following three years — taking our corporate tax rate right down to 23 percent.”
“And to ensure that this is not a net tax cut for banks, I am adjusting the bank levy rate next year to offset its effect. In each and every year of this Parliament our permanent bank levy raises more than the one-year bonus tax of the last Parliament.”
“For decades, we have operated Income Tax and National Insurance as two fundamentally different taxes and forced businesses large and small to operate two completely different systems of administration, with two different periods and bases of charge.
“The resulting anomalies are legion. And it imposes totally unnecessary costs and complexity on employers, and costs the taxpayer in the extra burden it places on HM Revenue and Customs... The Government will consult on merging the operation of National Insurance and Income Tax.”
“From April 2012, the default indexation assumption for direct taxes will move to CPI. There will be protection through this Parliament for those eligible for age-related, married couple and blind person’s allowances — and for employers National Insurance Contributions.”
“The OBR confirm that on their central forecast we will meet both these objectives — a balanced structural current budget and falling national debt by the end of the Parliament.”
“Our national debt, as a share of our national income, is forecast to be 60 percent this year, before peaking at 71 percent, and then starting to fall — reaching 69 percent by the end of the period.”
“Borrowing to fund the deficit this year is now set to come in at 146 billion pounds, below target. Then fall to 122 billion pounds next year. Then 101 billion pounds the year after. Then 70 billion pounds in 2013-14. Then 46 billion pounds. And 29 billion pounds by 2015-16.”
“I have today written to the Governor of the Bank of England to confirm that the inflation target for the Monetary Policy Committee will remain at 2 percent, as measured by the Consumer Prices Index.”
“Oil has risen 35 percent in just five months. That is why the OBR expect inflation to remain between 4 and 5 percent for most of this year, before dropping to 2.5 percent next year and then to 2 percent in two years time.”
GDP GROWTH IN 2012-15:
“The OBR point out that the effect, in their words, ‘creates scope for slightly stronger growth in later years’ than previously forecast. So while they expect real GDP growth of 2.5 percent next year, they forecast it will then rise to 2.9 percent in 2013; to 2.9 percent in 2014; followed by 2.8 percent in 2015.”
“Although average quarterly growth this year is set to be higher than was previously forecast, the annual forecast for 2011 has been revised to 1.7 percent. This the OBR attributes specifically to the weaker than expected final quarter of last year, the rise in world commodity prices and the higher-than-expected inflation in the UK.”
“We have had to undertake difficult measures. But we have already asked the British people for what is needed, and today we do not need to ask for more. So this is not a tax-raising Budget. But nor can we afford a giveaway. Taken together the measures I will announce today are fiscally neutral across the period.”