08/07/2015

'Billions' Of Welfare Cuts Announced In Budget

Chancellor George Osborne has unveiled the first Conservative Budget since 1996 at the House of Commons.

The Budget will see billions of welfare cuts come into effect, while a new "national living wage" of over £9 an hour will be introduced by 2020.

Student grants are also being dropped, while benefits will be frozen. However, it is thought the £12bn of welfare cuts outlined will now be phased in over a three-year period as opposed to two years.

The main points from the Budget include:

• A new National Living Wage of over £9 an hour by 2020

• Tax-free Personal Allowance will increase to £11,000 in April 2016

• An increase in budget for the Ministry of Defence

• Reforming the welfare system. Changes include: working-age benefits, including tax credits and Local Housing Allowance, being frozen for four years from 2016-17. Child Tax Credit will also be limited to two children for those born from April 2017.

• Reforming dividend tax

• Taking the family home out of Inheritance Tax

• The amount people with an income of more than £150,000 can pay tax-free into a pension is to be reduced

• The higher rate threshold will increase from £42,385 in 2015/16 to £43,000 in 2016/17

• Corporation Tax will be cut to 19% in 2017, and 18% in 2020

• Employment Allowance will increase by a further £1,000 to £3,000

• The standard rate of Insurance Premium Tax will increase to 9.5%

• Permanent non-dom status will be abolished from April 2017

• Three million new apprenticeships

• 30 hours of free childcare for three- and four-year-olds

• Student maintenance grants will be replaced with loans

• Public sector pay will increase by 1%.

Speaking at the House of Commons, Mr Osborne said the Budget "recognises the hard work and sacrifice of the British people over the past 5 years and says: we will not put that at risk, we have a job to do and we're here to get on with it."

He added that it is a Budget for "working people".

(JP)

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