Budget 2013 will be unveiled today by George Osbourne with a single objective of reviving the economy and in that attempt the Chancellor is expected to announce further spending cuts worth £2.5bn. What might George Osborne have up his sleeve? From a higher personal income tax threshold to more flexible ISAs, rise in alcohol duty to delays in fuel duty hike and a horde of other things too. All eyes rest on the Chancellor today as he charts the course for a turnaround for what is expected to be one of the grimmest British Budgets in years.
The Chancellor who would be revealing his fourth budget today, has already informed his cabinet colleagues they will have to cut 2% of their departments’ spending over the next two years, the savings will go towards large-scale infrastructure projects such as health, schools and hospitals. George Osborne was expected to use the money to support housebuilders, first-time buyers and housebuyers more generally. ‘Right-to-buy’ discounts for council tenants who wish to buy their homes are set to be raised from £75,000 to £100,000, while ministers are expected to unveil a new mortgage guarantee scheme.
In a nutshell, Budget 2013 may include extension of the NewBuy scheme to help people with small deposits buy newly built homes, a further increase of the personal tax allowance to reach the coalition’s stated ambition of £10,000. An announcement is also expected on the government’s policy on alcohol pricing, which could include scrapping the beer duty escalator, but with increased taxes on cheap and strong alcohol. The Chancellor could also offer changes to the remit of the Bank of England to help it promote growth. There could also be a downgrade of growth forecasts from the Office for Budget Responsibility and higher future borrowing. It is also speculated that George Osborne will alter the 2% inflation target mandate set for the Bank of England’s interest rate-setting Monetary Policy Committee in his Budget.