CHANCELLOR George Osborne cut the price of beer and had some good news for taxpayers as he delivered his 2013 Budget.
But he also painted a gloomy picture for the economy, as the official growth forecast was slashed in half and George Osborne admitted the recovery was taking “longer than anyone hoped”.
He confirmed that September’s planned fuel duty rise has been scrapped.
He said a planned 3p rise in beer duty tax was being scrapped and replaced by a 1p cut on a pint of beer.
And he brought forward a rise in the personal allowance to 2014, meaning no income tax is paid by anyone on the first £10,000 of their earnings.
Osborne has also thrown his weight behind the emerging shale gas industry in the UK by offering companies a “generous tax break”.
He announced in his budget speech that a “Field Allowance” would be granted to shale gas companies such as Cuadrilla which wants to extract gas from beneath the Lancashire countryside using the controversial hydraulic fracturing technique known as fracking.
He said: “Shale gas is part of the future. And we will make it happen.”
By the summer, the government will also publish guidelines that lay out how local communities will benefit from their unconventional gas resources, he added.
The Government lifted a ban on shale gas fracking put in place after it was linked to two earth tremors on the Fylde, in December and fracking is currently on hold as Cuadrilla has begun an environmental impact assessment at its Anna’s Road site, Westby.
The announcement came after he said that the Government was taking the future of energy supply in the UK seriously and had already announced it had given the go-ahead to the new nuclear power station at Hinckley Point.
He also said tax incentives would be granted to companies developing low emission vehicles and said the Government was backing two new carbon capture projects.
He also announced a new employment allowance which will take the first £2,000 off employer National Insurance bills for every company in the country - a move he described as “taking tax off jobs”.
The Chancellor insisted today’s package was a “Budget for people who aspire to work hard and get on”. He added: “Today, I’m going to level with people about the difficult economic circumstances we still face and the hard decisions required to deal with them.”
Mr Osborne said the economy would grow by just 0.6% this year - down from the previous forecast of 1.2% - and would be slower than forecast next year at 1.8% compared to the 2% forecast at the time of the Autumn Statement.
The sluggish growth figures mean borrowing will be higher than expected - hitting £114bn this year compared to a previous forecast of £108bn.
Next year borrowing will be £108bn as against the £99bn previously predicted, before dropping down to £42bn in 2017-18 compared to £31bn forecast in the Autumn Statement.
He said the deficit had fallen from 11.2% of GDP in 2009-10, to a forecast of 7.4% this year - a fall of a third.
And he predicted it would fall further to 6.8% next year, 5.9% in 2014-15, 5% in 2015-16 and 3.4% the following year - reaching 2.2% by 2017-18.
Money saved will be pumped into infrastructure projects, he said.
And he said the public sector pay cap of 1% would be extended by one year in 2015/16 - but military personnel would receive their full recommended increase in May.
Declaring “Britain is open for business”, the Chancellor announced a series of measures designed to boost commerce, including a 1% cut in corporation tax to 20% in April 2015.
And he confirmed more measures aimed at curbing tax dodging, claiming it was “one of the largest ever packages of tax avoidance and evasion measures presented at a Budget”.