Coalitions Governments First Budget

The Chancellor, George Osborne, today presented the first Budget of the Coalition Government. Here are the key points:

Taxes:

-VAT rises to 20pc from 17.5pc from January 4 2011.

-Food, children's clothing and other VAT-free items remain exempt from VAT for current Parliament

-Capital gains tax (CGT) to rise for higher-rate taxpayers to 28pc from midnight

-Capital gains tax to remain at 18pc for basic-rate taxpayers

-CGT exempt amount remains at £10,100 this year

-Personal income tax allowance increased by £1,000 in April to £7,475

-Higher rate income tax rate remains frozen to 2013/14

-National Insurance threshold rises by £21 next year

Public sector cuts and benefit reform:

-Child benefit to be frozen for next three years

-Benefits to rise in line with consumer prices

-Tax credits reduced for families earning more than £40,000

-Child element of child tax credit increased by £150 above inflation

-Housing benefit restricted to maximum £400 a week

-Medical assessment for Disability Living Allowance from 2013 for new and existing claimants

-Two year pay freeze for public sector workers

-Public sector workers earning less than £21,000 to be paid £250 extra each year for two years

-Basic state pension linked to earnings from April next year

-Pensions guaranteed to rise in line with with earnings, prices or 2.5pc, whichever is greatest

-The Government will accelerate the increase in state pension age to 66

Deficit and debt:

-Deficit to fall to 1.1pc of gross domestic product (GDP) by 2015/16 vs 10.1pc in 2011

-Budget deficit to be £149bn in 2010/11, lower than forecast at the last Budget

-Budget deficit to fall to £116bn in 2011/12

Business:

-Corporation tax cut to 27pc next year

-Corporation tax cut by 1pc point a year for next three years to 24pc

-Small companies tax rate cut to 20pc

-Tax relief for video games industry scrapped

-UK bank and building society levy from 2011

-Levy also on UK operations of foreign banks

-Smaller banks not liable for a levy

-Banks levy expected to raise more than £2bn a year

-10pc CGT rate for entrepreneurs extended to first £5m of qualifying gains

-Government looks to sell shareholding in air traffic control agency Nats, the student loan book will be sold and the future of the Tote bookmaker will be resolved

Spending:

-Government spending will be £637bn in 2010/11

-Government spending will be £711bn in 2015/16

Growth:

-UK economy to grow by 1.2pc in 2010

-UK economy to grow by 2.3pc in 2011

-UK economy to grow by 2.8pc in 2012

Unemployment:

-Unemployment to peak at 8.1pc in 2010/11

-Unemployment to fall each year to 6.1pc in 2015