View more on these topics

Budget 2011: Osborne pledges no more pain

There will be no further tax rises or spending cuts announced in Wednesday’s Budget, according to Chancellor George Osborne.

Speaking on the BBC Andrew Marr programme yesterday, he added that he would not divert from his current plans to cut the deficit.

He said: “I can say in the Budget this week I am not going to be asking for more tax increases or more spending cuts.

“We have asked what is required of the British people in last year’s Budget and that enables us to in this year’s Budget to move on to putting in place the policies that will help Britain compete, create jobs and help growth in the future”

The Office of Budget of Responsibility is expected to downgrade Britain’s growth prospects for 2011 from 2.1 per cent to around 1.8 per cent and Labour have criticised the Government for not doing enough to promote growth.

The income tax threshold will be raised by £1000 to £7,475 in April, which will remove 500,000 people from income tax altogether. Osborne may signal a further increase to this threshold on Wednesday as part of a longer term goal of increasing it to £10,000.

Osborne may also announce plans to consult on the Office of Tax Simplification’s recommendation to merge National Insurance and income tax.The move was called for in a recent OTS report which suggested it should be a “long-term” objective.

The Ernst & Young Item Club has estimated Osborne may have around £8bn of extra Government funds at his disposal due to higher than expected tax receipts. In a report today, it suggests Government borrowing will hit £140.2bn this year, £8.3bn less than the £148.5bn previously estimated by the Government.  

Osborne refused to confirm any plans to scrap a planned increase in fuel duty but it has been reported he will scrap the expected rise in air passenger duty which would have seen flights taxed at a higher level than they are now.

At a recent event, Osborne hinted that the Treasury may look to make changes to the VCT regime in the Budget. Experts predict the Chancellor may clamp-down on limited-life VCTs.


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. “The income tax threshold will be raised by £1000 to £7,745 in April….”

    I think you mean it will rise by £1,000 to £7,475.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm