(Click to enlarge)
As you can see he's planning to borrow £122bn in 2011/12. In fact his borrowing plans are as follows:
The comparison with Osborne's first "emergency" budget looks like this:
So he's raised his spending by 1.87%, not too bad, but at the cost of raising taxation by 7.5%
It seems we have quite a painful year coming up. The main tax rises were already "programmed in" before today. They mainly consist of raising the national insurance rates and under-indexing tax allowances. In fact the 40% tax threshold is being reduced. A number of people receiving no pay rise this year will none-the-less find themselves moved from the 20% tax and to 40%.
The chancellor's economic expectations are now that growth next year will be 1.7% - which is a reduced forecast but still optimistic considering that Q4 of calendar 2010 (our most recent statistic) was -0.6%, ie shrinkage not growth.
He threw in a couple of tasty tax cuts: corporation tax is to be reduced immediately from 28% to 26% and then down to 23% in subsequent years. He also cut 1p off a litre of petrol and cancelled the upcoming duty increase.
On the fuel side of things he has a cunning plan to stabilize petrol prices. When oil goes above $75 per barrel like it is now he will use the excess revenue from our North Sea oil production to cut prices at the pump. When it fall below $75 he will let the North Sea operators keep their cash.
He plans to merge National Insurance and Income Tax. He said this will take many years to implement and pensioners will be protected (they don't pay NI) and will retain the contribution principle.
There was quite a lot of good stuff for business. Another 21 enterprise zones are being created. Planning is to be simplified; small and start-up businesses are to be protected from more domestic legislation; the dual discrimination provisions of the Equality Act are to be abolished (these allow an employee to claim discrimination based on, say, being a woman AND being pregnant.) The banks will be lent on again to increase the loans available to small business by 15% and Entrepreneur Relief is being doubled to £10m.
On the personal taxation side not much changes if we overlook the under-indexation of allowances. Non-doms who stay in the country for more than 12 years will have to pay £50K rather than £30K in taxation but there will be relief if they bring investment funds into the country. Everyone else will be better off provided they earn less than £35K pa.
Alcohol duty is frozen except on strong beer. Tobacco is going up at inflation plus 2%. Tax discs are going up by inflation only (which is naughty to put it mildly - not many people are getting pay rises which keep up with our ever rising inflation. George is taxing us on his own incompetence!)
On housing £250m will be made available to first time buyers as part of shared equity schemes, provided they buy new builds. The new build requirement makes this more of a bung to the property developers than anything else. SMI (Support for Mortgage Interest) is being extended. This pays some or all of the mortgage interest payments for people who lose their jobs, or suffer reduced circumstances. SMI was due to run out, but is now to continue for at least another year. You may recall SMI was trimmed quite considerably in Osborne's previous budget.
Quite a few new technical colleges are to be created and some railway lines are to be upgraded.
Young people will get 100,000 new places on work experience, and 40,000 new apprenticeships.
Charities will be able to claim up £5,000 of Gift Aid per year without paperwork and inheritance tax will be reduced by 10% if 10% of the estate goes to charity.
The plans for a Green Investment Bank are being brought forward. The bank will start life with £3bn of government money. Its purpose is to provide loans for "green" schemes which are too long term or too risky for regular banks.
All in all it was a largely boring budget. No great shocks. Most of it had been leaked beforehand. Even the shadow chancellor Ed Balls was brandishing a copy of the speech yesterday.