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Fuel to fall by 1p per litre from 6pm tonight
1:41pm Wednesday 23rd March 2011 in News
Chancellor George Osborne today gave a helping hand to motorists and the lower paid in a budget he said would boost "growth and jobs".
To placate drivers facing record pump prices he cut the price of fuel by 1p per litre from 6pm tonight and announced a Fair Fuel Stabiliser to help keep costs down in future - to be funded by an increased levy on oil and gas production.
He also confirmed plans to raise the personal tax allowance by a further £630, to £8,105, a real increase of £48 extra per year, or £126 in cash terms.
And he claimed that together with this year's rise, it would mean a total of £326 extra money each year for "those working hard to pay for their family's needs".
But he announced a cut in growth forecasts amid continuing bad economic news.
Mr Osborne's second budget was greeted by cheers on the coalition benches but was damned by Labour leader Ed Miliband, He said: "It is the same old Tories. It is hurting but it isn't working"
Mr Osborne admitted that the recovery would be more sluggish than expected and the deficit take longer than previously planned to pay off.
The Office for Budget Responsibility slashed its growth forecast for this year from 2.1% to just 1.7%, although Mr Osborne said that it would pick up in future years.
At the same time borrowing over the next five years will be a total of £47 billion higher than previously predicted.
The OBR is now expecting a deficit of £122 billion next year, compared to the £117 billion previously forecast, while by 2015-16 it will still be £29 billion as against the £18 billion it had been thought.
The Chancellor's Fair Fuel Stabiliser means the inflation rise in duty planned for next week will be delayed until next year while the April 2012 inflation rise will also be put back until the following summer.
The fuel duty escalator which adds an extra 1p on top of inflation every year will also be axed for the rest of the parliament.
The cuts will be financed from the £2 billion in increased revenues expected to roll in over the next five years from North Sea oil and gas companies as a result of record energy prices.
Mr Osborne said tobacco duty rates would increase by 2% above inflation, as previously announced.
But he also pledged to reform the tobacco duty regime to narrow differentials between the lower-cost brands and the others.
There was no relief for hard-pressed publicans but the Chancellor said there would be no new changes to alcohol duty beyond those already announced.
But there was a glimmer of good news for holidaymakers with confirmation that this year's planned rise in Air Passenger Duty had been postponed for one year.
Expected plans for a so-called Learjet Tax on private aircraft were also confirmed.
Despite the gloomier outlook, the Chancellor insisted: "Britain has a plan and we're sticking to it".
He announced a raft of measures he said would make the UK the best place in Europe to start, finance and grow a business.
Many of the measures had been widely trailed but the centrepiece was another cut in corporation tax paid by businesses - down 2% instead of the 1% previously announced.
And there would be 1% falls in each of the following three years, he added.
He confirmed a shake-up in planning rules which will make all bodies involved in planning give priority to growth and jobs.
But there was a new squeeze on so-called non-doms - wealthy entrepreneurs who have been accused of avoiding their fair share of tax using their special tax status.
The last government introduced a £30,000 charge for those who had lived here for seven years.
Mr Osborne said he was increasing the charge to £50,000 for non-doms who have been in the country for 12 years, a move he said would raise over £200 million in the coming years.
As expected he set in motion plans to merge income tax and National Insurance contributions as part of a push to simplify the tax system.
However, he warned that the process would take several years to complete.
He also confirmed proposals to use the levy charged on banking profits to give a £250 million leg up for first time home buyers.
The new shared equity scheme, First Buy, will be available for first-time buyers who want to purchase a newly built property, but who cannot afford high deposits.
He said this would help 10,000 families get on to the housing ladder for the first time.
There was also an extra £100 million for the repair of winter potholes in roads.
Mr Osborne announced funding for 21 new Enterprise Zones.
He said the first ten will be in Birmingham and Solihull, Leeds, Liverpool, Greater Manchester, the Tees Valley, Tyneside, the Bristol area, the Black Country, Derbyshire and Nottinghamshire, and Sheffield.
He confirmed the creation of a Green Investment Bank and pledged another £2 billion of funding, on top of the £1 billion already committed.
On education he announced a doubling of the number of planned new University Technical Colleges from 12 to 24.