THE Chancellor provided some relief for beleaguered drivers in a budget he said would boost growth and jobs.
To placate drivers facing record pump prices, he cut the price of fuel by 1p a litre and announced a Fair Fuel Stabiliser to help keep costs down in future – to be funded by an increased levy on oil and gas production.
He also confirmed plans to raise the personal tax allowance by a further £630, to £8,105, a real increase of £48 extra per year or £126 in cash terms.
And he claimed that together with this year’s rise, it would mean a total of £326 extra money each year for “those working hard to pay for their family’s needs.”
But he announced a cut in growth forecasts amid continuing bad economic news.
At the same time borrowing over the next five years will be £47bn higher than previously predicted.
The fuel duty escalator which adds an extra 1p on top of inflation every year will also be axed for the rest of the parliament – with the cuts financed from the £2bn in increased revenues expected to roll in over the next five years from North Sea oil and gas companies as a result of record energy prices.
Among other measures, Mr Osborne confirmed that tobacco duty rates would rise by 2% above inflation. He said there would be no new changes to alcohol duty beyond those already announced.
But there was a glimmer of good news for holidaymakers with confirmation that this year’s planned rise in Air Passenger Duty had been postponed for one year.
Despite the gloomier outlook, the Chancellor insisted: “Britain has a plan and we’re sticking to it.”
He announced a raft of measures he said would make the UK the best place in Europe to start, finance and grow a business.
The centrepiece was another cut in corporation tax paid by businesses – down by 2% instead of the 1% previously announced with 1% falls in each of the following three years.
Mr Osborne confirmed a shake-up in planning rules to make all bodies involved in planning give priority to growth and jobs.
The Chancellor also set in motion plans to merge income tax and National Insurance contributions as part of a push to simplify the tax system.
He also confirmed proposals to use the levy charged on banking profits to give a £250m leg-up for 10,000 first-time home buyers with a new shared equity scheme.
There was also an extra £100m for the repair of winter potholes in roads.
Mr Osborne announced funding for 21 new Enterprise Zones, including one based on Leeds.
Labour leader Ed Miliband mocked George Osborne’s claim to have delivered a Budget for growth.
He added: “When families look at this Budget, look at the squeeze on their living standards, look at the job losses in their communities, they will conclude it is hurting, but it isn’t working.”