The independent Office for Budget Responsibility (OBR) forecasts growth of 1.7% (down from 2.1%) for 2011, 2.5% next year, 2.9% in 2013, 2.9% in 2014 and 2.8% in 2015 (this compares to OECD forecast of 1.5% for 2011 and 2.0% for 2012).


The OBR forecasts inflation to remain between 4% and 5% for most of this year, dropping to 2.5% next year and 2% in two years’ time.

Borrowing for this year to be £146bn – below the Government target. Borrowing will fall to £122bn next year, then £101bn in 2012/13, £70bn in 2013/14, £46bn in 2014/15 and £29bn in 2015/16.

Public sector net borrowing will decline from its peak of 11.1% of GDP in 2009/10 to 1.5% of GDP in 2015/16; the cyclically-adjusted or “structural” current deficit will be eliminated by 2014/15, with a projected surplus of 0.4% of GDP in that year, rising to 0.8% of GDP in 2015/16.

Public sector net debt will peak at 70.9% of GDP in 2013/14, before declining to 70.5% of GDP in 2014/15 and 69.1% of GDP in 2015/16.

Fuel duty
New fair fuel stabiliser to be introduced, funded by increasing the supplementary charge on North Sea oil and gas production which increased from 20% to 32% from 24th March.

Fuel duty cut by 1p a litre from 6pm on 23rd March.

Fuel duty escalator that adds 1p to fuel duty on top of inflation each year to be cancelled for the rest of this Parliament.

Personal tax allowance to rise from £7,475 to more than £8,105 in April 2012.

43 tax reliefs abolished to simplify the system.

Merging of National Insurance Contributions and Income Tax.

Rate relief holiday for small businesses extended to October 2012.

Tax avoidance loopholes to be closed, raising £1bn.

Charge on non-domiciled taxpayers to increase from £30,000 for those here for seven years to £50,000 for those in the country for 12 years.

Council tax frozen or reduced this year in every English council.

Housing Reviews launched of the revenue raised by the 50% tax rate and the taxation of very high-value property.

£250m to help first-time buyers purchase newly-built homes.

Support for Mortgage
Interest scheme extended to January 2013.

Corporation Tax cut by 2% from 6th April 2011 – rather than 1% as previously announced – and will fall by 1% in each of the next three years to reach 23%. Bank Levy rate to be adjusted next year to offset the effect of Corporation Tax reduction on banks.

£350m worth of regulation on businesses removed.

Relief for entrepreneur tax doubled to £10m.

Entrepreneurs’ relief scheme doubled to £10m from 6th April 2011.

Small business rate relief holiday extended by one year to October 2012.

21 new enterprise zones to be funded, including in Manchester, Birmingham and London. Ten others to be named in the summer.

Help for manufacturing to include new export credits, a technology and innovation centre and nine new university centres.

Investment of £100m in new science facilities in Cambridge, Norwich, Harwell and Daresbury, funded from the Bank Levy.

All planning bodies to prioritise growth. Default answer to development will be “yes”.

Income Tax relief on Enterprise Investment Scheme’s increased from 20% to 30%.

Small companies’ Research and Development tax credit increased to 200% from 6th April and 225% in 2012.

New funding to double the number of university technical colleges from 12 to at least 24.

Number of places on a new work experience scheme to increase to 100,000 over two years, rather than 20,000 as previously announced.

Funding for 40,000 new apprenticeships for young unemployed.

State Pension Age to rise to 66 by 2020.

Government to seek automatic mechanism for future increases in state pension age, based on regular reviews of longevity.

New single-tier pension, worth £140 a week, set just above means-tested pension credit of £137.35. This will not apply to current pensioners.

New tax-efficient children’s savings account, known as the Junior Individual Savings Account (ISA).

Green Deal to reduce energy bills from next year.

New “Green Investment Bank”, will have access to £3bn of funds and starts operating in 2012.

The UK to become the first country in the world to introduce a carbon price floor for the power sector.

Public money will cut unusually high water bills in South West England.

Climate Change Levy discount on electricity for those signing up to climate change agreements will rise from 65% to 80% from April 2013.

Plans to switch air passenger duty (APD) from passengers to planes have been dropped. This year’s APD rise is postponed for a year, and the Government will seek to impose the tax on private jets.

Gift aid administration to be simplified, especially for small donations.

10% Inheritance Tax discount for charitable donations.

Investment of £200m in regional railways.

Central funding of £100m to help councils repair potholes.