Budget 09: The highlights


The economy to shrink 3.5% in 2009, but grow by 1.25% in 2010

Growth expected to pick up in 2010, expanding by 1.25%.

Borrowing to rise to £175bn in 2009, followed by further rises of £173bn,
£140bn £118bn and £97bn the following years

CPI inflation to drop to 1% by the end of the year

Personal taxation

A new income tax rate of 50 per cent will apply to people earning over

The income tax personal allowance will be reduced to those with incomes over

Alcohol, Tobacco and Fuel

Alcohol taxes go up 2% at midnight – or 1p a pint

Tax on tobacco up by 2% from 6pm – or 7p on a pack of 20 cigarettes

Fuel duty to rise by 2p per litre from September, followed by 1p a litre over
inflation each April for four years

Public savings

£1bn raised from the closure of identified tax avoidance loopholes over the
next three years.

Further £9bn generated in efficiency savings

Public spending cut from 1.1% in 2010 to 0.7% in 2011-12

Business aid

Loss-making companies will be able to reclaim more taxes paid in the last
three years until November 2010

£750m strategic investment fund to help emerging technologies and regionally
important sectors

Main business capital allowance rate doubled to 40%

Pensions and savings

Basic state pension will increase by at least 2.5%

A rise of £100 to over-80s households and £50 to over-60s households in
2009/10, via the Winter Fuel Payment

Tax relief on pensions contributions will be restricted for those earning
£150,000 and over

The annual investment limit for ISAs rises to £10,200 of which £5,100 can be
saved in cash. These higher limits will be available to over-50s from 6 October
2009 and to everyone from 6 April 2010.

Housing and homeowners

The Stamp Duty land tax threshold on residential properties costing £175,000
or less will be extended until 31 December 2009.

Another £80m for the shared equity mortgage scheme

£500m for stalled housing projects

Motoring and transport

A temporary car scrappage scheme – it offers consumers £2,000 off the cost of
a new vehicle to replace a vehicle more than 10 years old.

Employment and training

18-24 year olds who have been unemployed for 12 months will be guaranteed a
job, training or a work placement.

An extra 54,500 places will be created in the next academic year for 16 and
17 year olds who wish to take them up.

The environment

Over £1.4 billion of support will be targeted at in the low-carbon sector.

£435m being made available for energy efficient schemes for homes, businesses
and public buildings

£405m being made available to encourage low-carbon energy and advanced green

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