47881_Budget_2015_Web_Accessible

Executive SummaryWhen this Parliament began, unemployment was at 8% and the budget deficit was over 10% ofGDP – the largest deficit in post-war history. One pound in every four the government spentwas being borrowed. Since 2010, the government’s long-term economic plan has deliveredthe stability and security needed to build a resilient economy. The UK had the fastest growthamong G7 economies in 2014, employment has reached its highest ever level, and inflation isat a record low. Debt as a share of GDP is now forecast to start falling in 2015-16 – meeting thedebt target set out in 2010. Public sector net borrowing is lower in every year to 2018-19 thanat Autumn Statement 2014, and the deficit as a share of GDP is forecast to have halved by theend of 2014-15. In 2015-16, Office for Budget Responsibility (OBR) forecasts show that only onepound in every ten spent by the government will be borrowed.Now the government needs to finish the job. The deficit remains too high and productivity toolow, there are still long-standing structural weaknesses in the economy, and the gap betweenthe economic performance of London and the rest of the UK remains too wide. In this Budget,the government is continuing to take decisive action for the long term in order to reduceborrowing, create full employment and secure a truly national recovery. The government’sambition is to build a stronger economy and a fairer society, and for the UK to become the mostprosperous major economy in the world by 2030.The UK economy and public finances: GDP grew 2.6% in 2014, the strongest annualgrowth since 2007, and the fastest in the G7. Debt is forecast to be falling as a share of GDP in2015‐16, meeting the debt target set out by the government in 2010. Borrowing is forecast tobe lower in every year to 2018-19 than at Autumn Statement 2014, and the public finances areforecast to achieve a larger surplus in 2018-19. Falling debt and improving borrowing mean thatconsolidation can end a year earlier than planned, and that spending will grow in line with GDPin 2019-20. This Budget builds on existing reforms to create a dynamic, regionally balanced andstronger economy.Growth: At the end of 2014, employment was at its highest ever level with 1.85 millionmore people in work since the current government came to power. Business investment hasincreased by 25.6% since Q1 2010, and the UK will have the joint lowest rate of CorporationTax in the G20 from April 2015. Budget 2015 sets out a significant package of measures fora truly national recovery by investing in infrastructure, housing, science and innovation acrossthe whole of the UK, and building a Northern Powerhouse. Fuel Duty will be frozen for anotheryear, the government will substantially reduce oil and gas taxes to improve competitivenessin the North Sea, and further support for energy intensive industries will begin in 2015-16.A comprehensive review of Business Rates has been launched, and there will be a radicalsimplification of the tax system by abolishing the annual tax return.Fairness: The government’s plan is underpinned by a firm commitment to support thosewho want to work hard and get on, and to ensure that the most vulnerable receive the careand services they need. The richest households continue to make the biggest contribution toreducing the deficit, both in cash terms and as a proportion of their income. Budget 2015 buildson the government’s priority of helping families and making work pay with further substantialincreases to the personal allowance to £11,000, passing on full gains to higher-rate taxpayers.Saving will be supported by a new tax free Personal Savings Allowance and the Help to Buy: ISA.This Budget also invests in mental health services for children and young people and sets outfurther action to tackle tax evasion and avoidance.Budget 20151