Income tax, beer duty and bingo tax cut in George Osborne's populist Budget

More than 120,000 North East workers won't pay any income tax following George Osborne's latest Budget

Anthony Devlin/PA Wire Chancellor of the Exchequer George Osborne outside 11 Downing Street
Chancellor of the Exchequer George Osborne outside 11 Downing Street

Cuts in income tax, cheaper beer and a cut in duty on bingo were at the heart of George Osborne’s Budget for “makers, doers and savers”.

The populist Budget also included £200m to fix potholes, the announcement that fuel duty will be frozen for another year - and even a pledge to double the number of millionaires created by Premium Bonds, the government savings bond used by 21 million people.

In his annual statement to Parliament about the state of the nation’s finances, the Chancellor also announced a series of measures to boost industry - including a £7bn package to cut energy bills for manufacturers.

And there was a focus on measures designed to help pensioners, including the introduction of new saving bonds offering a four per cent rate of interest, to help pensioners with savings which currently earn miniscule rates of interest.

The Chancellor set a trap for Labour by announcing a cap on welfare spending, which will be fixed at £119bn. It means a future Labour government would be unable to repeal cuts in housing benefit known as the “bedroom tax” without going over the limit or, alternatively, making cuts elsewhere in the welfare budget. Pensions are not included in the cap.

There was a potential boost for Newcastle Airport, with the announcement of an extra £10m to subsidise the creation of new services from regional airports, while the entire aviation industry will benefit from cuts to air passenger duty for destinations more than 4,000 miles away.

The Budget came as the Government was able to bask in the news that unemployment had fallen, with the jobless total falling by 8,000 in the North East over the past three months, down to 125,000 – an unemployment rate of 9.5 per cent.

And industry gave the Budget statement a warm welcome, with North East Chamber of Commerce (NECC) Policy Director Ross Smith saying: “What we got was a series of measures that match NECC members’ priorities. Greater support for exporters and energy intensive industries play to the region’s strengths, while measures on skills and capital investment are also welcome.”

But Labour leader Ed Miliband said living standards had fallen since 2010, adding: “The working people of Britain are worse off under the Tories.”

One of the key Budget measures was the announcement that the income tax threshold, due to rise to £10,000 in April, would rise again to £10,500 next year - effectively cutting taxes for many working people.

According to the Treasury, 113,000 people in the North East will be taken out of income tax altogether this year, and another 14,000 will come out of tax next year.

There was a cut of a penny on beer duty, while bingo duty was halved from 20p to 10p.

And a fuel duty rise planned for September was axed - following representations from MPs including Northumberland Conservative MP Guy Opperman .

The MP was also able to celebrate victory in his campaign to win a tax break for air ambulance services such as the Great North Air Ambulance, with the Chancellor announcing that they will no longer pay VAT on fuel.

A number of announcements focused on pensioners - a group of people traditionally likely to vote at general elections - including changes to allow more people to withdraw a lump sum from pension schemes rather than being forced to buy an annuity.

Mr Osborne told the Commons that the Government was “putting Britain right” but warned that the Treasury would continue to run a deficit until 2018. Only then will the UK actually start to reduce its debts.

He said: “This is a Budget for building a resilient economy. If you are a maker, a doer or a saver, this Budget is for you.”

But Labour MP Catherine McKinnell, who represents Newcastle North, said: “The key question for people across the North East is whether they are better off than they were when the Coalition came to power back in 2010. For the overwhelming majority of my constituents, the answer would be a resounding ‘no’.

“This Budget did precious little for people across the region struggling with a cost of living crisis, who need help with things like energy bills and childcare costs now, not after the General Election.”

Liberal Democrat MP Sir Alan Beith said changes to income tax allowances meant many working people were receiving income tax cuts of £800 a year.

He said: “This tax cut is the real budget boost for working people and would not have happened without Liberal Democrats in Government creating a stronger economy and a fairer society.”

Mr Opperman said: “This Budget is fantastic news on jobs, on growth and on aspiration. It offers support for the North East’s energy-intensive industries and support for manufacturing.”

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