13.47: The Budget announcement has wound down now so too is the blog. Thanks
13.45: Michael Gove (who made remarks about the number of Old Etonians in the Government in an interview with the FT over the weekend) has been banished to the naughty step out of sight of the TV cameras, Miliband says
13.44: Miliband ridiculing members of the Conservative party suggesting they are the Workers Party. He says there are more Etonians writing the Tory party manifesto than there are women in the Cabinet
13.40: Falling wages mean that median household income are more than 5% below their level prior to the crisis
13.39: Miliband accuses the government of telling voters their incomes are rising when in fact they are falling.
13.39: The OBR’s Economic and Fiscal Outlook which contains the analysis cited in Osborne’s announcement can be read here http://cdn.budgetresponsibility.org.uk/37839-OBR-Cm-8820-accessible-web-v2.pdf
13.37: What has happened to the promised rebalancing, Miliband asks.
13.34: Miliband says the Prime Minister’s record is that living standards have fallen. The OBR has estimate that real earnings are not expected return to their 2010 levels until 2018–19. The IFS have said it’s unlikely that living standards will return to their pre-crisis levels before the election.
13.31: Ed Miliband is beginning his response to the Budget. The Chancellor spoke for an hour but he didn’t mention that ‘working people are worse off under the Tories’
13.29: Osborne commends the Budget to the House and that concludes the announcement.
13.28: Tax receipts will increase as a result of Osborne’s announcements
13.26: The most far reaching reform to the regime of taxing pensions since the current system was introduced.
13.24: Osborne says he will remove all remaining tax restrictions on how pensioners have access to their pension pot – ‘no one will have to buy an annuity’
13.22: A new pensioner bond will be issued by NS&I to help pensioners who have seen their incomes fall because of low and long interest rates.
13.21: Here’s the one of the big announcement: merging cash and stocks ISAs to create a new flexible model. £15,000 a year tax free new ISA
13.20: This is useful on the tax threshold announcement http://www.ifs.org.uk/publications/6045
13.18: On the personal allowance, no income tax on the first £10,500
13.17: A penny off a pint for the second year #beerduty
13.16: Osborne says alcohol duty will rise with inflation, with a few exceptions like Scotch and Cider
13.15: The Chancellor says he will cut Bingo duty to 10%
13.14: Osborne confirms fuel duty rise planned for September will not take place
13.13 Half of the firms that will benefit from the manufacturing support Osborne has announced will be in the North
13.10: Osborne says a resilient economy is a more balanced one, with more investment, exports and manufacturing jobs.
13.05: Osborne is outlining plans to ‘get Britain investing’. He will give tax and borrowing powers to the Welsh government to move forward with their own infrastructure projects
13.03: Osborne says he will extend Help to Buy to get Britain building. Policies will be in place to build 200,000 homes
13.02: On the previous inequality point, the IFS projects that median incomes will fall by 1.1 per cent between 2011-12 and 2015-16, while 90th percentile incomes will rise by 0.9 per cent
13.01: Osborne says we will see ‘Made in Britain’ around the world. Good: we’ve recorded a current account deficit every year since 1984
13.00 Britain needs to earn its way in the world and business must export more. The government will double the amount of financial support for exporters to £3bn. It will be one of the most generous export finances packages in the world, Osborne says
12.56: A couple of minutes ago Osborne said inequality is at its lowest level for 28 years. In the aftermath of the recession inequality did decline slightly, but it and poverty are both forecast to rise in the coming years.
12.53: The distributional analysis shows that the rich are making the biggest contribution because ‘we are all in this together, the Chancellor says.
12.51: Osborne is now outlining welfare cap: only the state pension and cyclical unemployment benefits are excluded
12.49: Osborne says the government needs to run an absolute surplus so there will be cuts in the next parliament. Osborne confirms he will bring forward a Charter for Budget Responsibility in the Autumn
12.48: Osborne says that every post-war government who has embarked on spending cuts have let real spending rise back to its previous height in three years. This government won’t let it happen, he says. He will not squander the British peoples’ hard won gains.
12.45: Growth hasn’t reduced borrowing figures much because, as the OBR have said, it is mainly ‘cyclical’ – it doesn’t increase the underlying potential of the economy, but uses up spare capacity.
12.43: Osborne says growth alone will not restore the health of the public finances. The question, he says, is who has the credibility to make more cuts. Positioning himself for big cuts next parliament.
12.42: Osborne says the IMF has says Britain has made more progress on reducing the headline and structural deficits of any major economy in the world.
12.42 Osborne cites today’s positive employment figures. Unemployment has fallen, driven mainly by a large rise in self-employment (increasing by 211,000). The number of employee jobs fell by 60,000. Private sector pay increased by 1.7%, compared a rise of 0.5% in the public sector.
12.40 Abandoning the government’s economic plan would put the economy’s ‘resilience’ in peril, Osborne says
12.39: Osborne says there is no major advanced economy in the world growing faster than Britain today
12.37: The OBR have made the biggest upward revision to growth for at least 30 years.
12.35 Osborne kicks off the Budget by emphasing the need to rebalance the economy: this is a Budget for makers, do-ers and savers, he says
Hello and welcome to the Fabian Society’s live blog. We’ll be covering the announcements from George Osborne’s fifth budget.
The backdrop to today’s announcement is quite different a year ago. Unlike 2013 GDP is rising at quite a clip and the Office for Budget Responsibility is expected to revise up its growth forecasts. Unemployment has also fallen from levels seen earlier in the parliament and inflation is behaving itself. On the three headline indicators at least, things are going swimmingly, and Osborne will glad to get the message across that the plan is working.
The fiscal side of things also signals change – as well as continuity. Announcements at Autumn Statement 2013 mean the government’s plan for the deficit aims to overshoot the damage caused by the financial crisis so that the country would be running a budget surplus by 2018-19.
On the other hand, upward revisions to growth have not changed the underlying position of the public finances (the growth has been ‘cyclical’), and the level of borrowing is largely unchanged from this time last year. So we are only half way through the deficit reduction process and scope for Osborne to give any substantive giveaways in slim.
Policy-wise, announcements to ease pressure on the cost of living have been trailed in the press. Real wages are not expected to return to their 2010 levels until 2018-19 and this matters for the politics of the Budget as much as the economics. Look out for announcements on tax thresholds, and a possible extension of the government’s Help to Buy scheme. The Treasury is also briefing that there could be a surprise this afternoon.
Of course, it’s the politics of the Budget that really matter and this announcement should not disappoint. Big cuts are planned for the next parliament, and this Budget will be an important opportunity to get the political position correct for more pain to come.
A trap for the Labour party may resurface with further details of the welfare cap. Osborne’s plan is to force a Commons vote on the issue, and challenge the Labour party to vote against capping over £100bn worth of welfare expenditure.
Then there is the question of ‘Who benefits?’. The Times this morning reports that Tory backbenchers are cutting up rough over the negligible impact of tax changes on middle income groups. The Chancellor may also focus on more populist measures, such as holding back the increase in beer duty. Then there is the question of the Chancellor’s leadership ambitions.