No one quite knew what to expect in the irst budget by a majority Conservative government for almost 20 years.
In his seventh Budget Statement as chancellor, George Osborne promised a ‘big budget for a country with big ambitions’. As predicted there were details on how the government will fulfil its pre-election goals of reducing welfare spending by £12 billion and changing the inheritance tax nil-rate band structure.
There were also some surprises such as the compulsory introduction of the national living wage from April 2016 and a reduction in corporation tax.
The Chancellor also gave an update on the wider economic picture using figures from the Office for Budget Responsibility (OBR). Growth for 2014 was 3% (up from the forecast of 2.6% in March) and is expected to be 2.4% in 2015 thanks to stronger private consumption and investment.
This is the second year in a row that the UK is forecast to have the strongest economic growth of any major advanced economy.
The OBR predicts that a million more jobs will be created by the end of the Parliament. The deficit is forecast to be 3.7% of GDP in 2015 and will fall by around 1% each year until 2019 when there will be a small budget surplus of 0.4%.
Despite the continued growth in the UK, Osborne warned that the ‘global economic risks are rising’, pinpointing slowing growth in the USA and China as examples.
The following report summarises the announcements made by Chancellor George Osborne during the Summer Budget on Wednesday 8 July 2015.