Budget 2015: George Osborne delivers post-election budget

Posted on July 8, 2015

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by Alex JS, editing by Adam MS

(LONDON – Reuters) — Chancellor George Osborne set out his plans to reshape the country’s economy with the first budget of the new Conservative government on Wednesday. Below are the highlights from the statement:

ON RESHAPING THE ECONOMY

“This will be a Budget for working people.

“A Budget that sets out a plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country we intend to create.”

ON GROWTH FORECASTS

“For 2015 the OBR forecast growth at 2.4 percent. In 2016 the OBR have growth unchanged at 2.3 percent – and it is then revised up to 2.4 percent in the following year; a level of strong, steady growth it predicts for the rest of the decade.”

“The OBR forecast that under the current economic conditions, almost a million more jobs will be created over the next five years.”

ON DEBT PLANS

“We should cut the deficit at the same pace as we did in the last parliament.

“At this pace the national debt is lower as a share of our national income in every future year than when I presented the Budget in March.”

“No year will see cuts as deep as those required in 2011-12 and 2012-13.”

ON DEFICIT PLANS

“Stronger tax receipts, more asset sales and a strong government that’s getting on with the job – we can achieve a smoother path to the same destination. With a surplus a year later in 2019-20, but the national debt lower and that same surplus higher.

“This year it (budget deficit) is forecast to fall to 3.7 percent – one third of the deficit we inherited … It then falls again to 2.2 percent in 2016-17, down to 1.2 percent in the year after that, and then to just 0.3 percent in 2018-19.

“The following year, 2019-20 we move into a budget surplus at 0.4 percent, which is then maintained in the year after that at 0.5 percent of GDP.

“Only when the OBR judge that we have real GDP growth of less than 1 percent a year, as measured on a rolling four-quarter basis, will that surplus no longer be required.”

ON PUBLIC SECTOR PAY

“We will continue recent public sector pay awards with a rise of 1 percent per year for the next four years.”

ON TAX AND NON-DOM STATUS

“We’re going to change the law to stop the use of losses which abuse our controlled foreign companies regime, and make sure investment fund managers pay the full capital gains tax rate on their carried interest.

“Non-dom status was meant to be temporary, but it became permanent for some people. Not any longer. I am today abolishing permanent non-dom tax status.

“Anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains.”

INSURANCE PREMIUM TAX

“Britain’s insurance premium tax is well below tax rates in many other countries. I am therefore today raising insurance premium tax – which applies to only one fifth of all premiums – to 9.5 percent, effective from this November.

ON BANK LEVY RATE

“I will, over the next 6 years, gradually reduce the bank levy rate – and after that make sure it no longer applies to worldwide balance sheets.

“But to maintain a fair contribution from the banks, I will introduce a new 8 percent surcharge on bank profits from the 1st January next year.”

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