From next April the minimum wage an hour for people over the age of 25 will be £9 instead of£7.20….reports Asian Lite News. But the chancellor converted student grants into student loans; froze benefits and cut billions from tax credits and other welfare payments. He also cut housing benefit for most people aged under 21
Finally a good news for the low-paid workers. Chancellor George Osborne says he will introduce a compulsory national living wage by next year.
The Conservative-only budget in 18 years, the chancellor portrayed the Tories as the party of working people and said from next April the minimum wage an hour for people over the age of 25 will be £9 instead of£7.20.
But the chancellor converted student grants into student loans; froze benefits and cut billions from tax credits and other welfare payments. He also cut housing benefit for most people aged under 21.
As expected Osborne said he would spread the £12bn in welfare cuts promised in the Conservative election manifesto over three instead of two years.
Mr Osborne repeatedly claimed his budget will set “out a plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country we intend to create”.
The chancellor also promised to phase out the controversial bank levy, which City banks, including HSBC, has complained makes them uncompetitive. The levy will gradually reduce over next years; Instead, Osborne said he would charge an extra 8% on banks’ profits.
He said the NHS would receive a further £8bn by 2020, on top of £2bn already committed.
* An increase in the inheritance tax threshold to £1m for married couples by 2017
* Working-age benefits to be frozen for four years – including tax credits and local housing allowance, but excluding maternity pay and disability benefits
* Maintenance grants for students – paid to students with family incomes below £42,000 – to be scrapped and converted into loans from 2016/17
* Corporation tax cut to 18% by 2020
* Fuel duties frozen for the remainder of this year
* A fresh clampdown on public sector pay, which will be limited will to 1% a year for the next four years
* Pensions tax annual allowance to be tapered away to a minimum of £10,000 from next year
* New cars and motorbikes will not need MOTs for the first four years, rather than three
The chancellor said the £26,000 benefit cap – the amount one household can claim in a year – would be cut to £23,000 in London and £20,000 in the rest of the country.
The government will also make local authority and housing association tenants in England who earn more than £30,000 – or £40,000 in London – pay up to the market rent, but rents in the social housing sector will be reduced by 1% a year for the next four years.
Mr Osborne confirmed that the BBC has agreed to absorb the £650m cost of providing free television licences for over-75s. Councils in England and Wales are likely to be allowed to relax Sunday trading laws.
The chancellor unveiled “just under half” of the £37bn in cuts he says are needed to clear the deficit by 2018, with £12bn from the welfare budget and £5bn from a crackdown on tax avoidance. The remainder of the savings will come from cuts to government departments to be announced in the autumn.
Mr Osborne said the UK economy today was “fundamentally stronger than it was five years ago”, with living standards rising strongly.
He said higher tax receipts meant he could implement a “smoother” path to recording a surplus in the government finances, but stressed that he would not back away from tackling the deficit.
“You only have to look at the crisis unfolding in Greece as I speak to realise that if a country’s not in control of its borrowing, the borrowing takes control of the country,” Mr Osborne said.
“Britain still spends too much, borrows too much, and our weak productivity shows we don’t train enough or build enough or invest enough.”
He targeted the £30bn-a-year tax credits system, which tops up the wages of low paid workers.
Support for children through tax credits and universal credits will be limited to two children, affecting children born after April 2017 unless the third child is the result of twins, triplets or other multiple birth.
Tax credits are a type of welfare payment, introduced by Gordon Brown in 2003, that allow unemployed people to keep some of their benefits when they get a low paid job and are also paid to disabled workers and those responsible for children. They are due to be phased out when Universal Credit is introduced.
In other Budget announcements, the chancellor increased the personal allowance – the amount people can earn before they start paying tax.
He announced reforms to the “no dom” tax status, saying “anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains” from April 2017.
The chancellor also changed the non-domiciled tax rules, under which foreign-born individuals are allowed to avoid paying tax in the UK on income earned abroad.
Under the new system, anyone who has lived in the UK for 15 of the last 20 years will have to pay full tax here, echoing a pledge in Labour’s manifesto. “British people should pay British taxes in Britain, and now they will,” Osborne said, predicting that the change would raise £1.5bn.