Chancellor George Osborne has revealed the details of the Lib-Con emergency Budget today. Here Drapers follows the developments and their impact on the retail and wholesale sector.
1240: Osborne says everyone will be asked to contribute to reducing the deficit and that everyone will “share in the rewards when we succeed”.
1245: Osborne says the Office for Budget Responsibillity forecasts economic growth over the next five years of 1.2% this year, 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in 2014 and 2015.
The CPI is forecast to reach 2.7% by the end of the year.
The rate of unemployment is set to peak at 8.1% this year and be 6.1% in 2015.
1247: Osborne says he is planning for a “sustainable” private sector built on economic growth instead of “pumping the debt bubble back up”.
1250: Osborne says the deficit reduction should come from lower spending levels rather than higher taxes.
1252: Osborne will not cut capital spending further.
1256: The public sector will have its pay frozen for two years in order to “share the burden” after the private sector was hard hit during the recession.
1305:” We will do everythign to create jobs in the private sector” says Osborne
1306: Osborne says he wants a sign over UK business saying that “we are open for business”
1307: In April 2011 the threshold at which employers start to pay National Insurance will rise £21 per week. The cost of hiring people on income lower than £21,000 will be lower
Corporation tax will be cut by 1% per year for four years and small companies’ corporation tax rates will be cut to 20%, benefitting 850,000 small businesses.
The government will continue to guarantee small companies access to lending.
13.11: In January 2011, a banks levy will be introduced on UK banks and the UK operations of foreign banks which generate more than £2bn in annual revenue.
13:12 Osborne says businesses “want certainty and stability from the government so they can start the process of rebuilding their businesses”.
13:15 The government will reveal a new tax scheme to encourage new private businesses to set up in the regions. Anyone who sets up a new business outside London, the south-east and east of England will be exempt from £5,000 of National Insurance contributions for each of first 10 employees they hire.
13:17VAT will rise from 17.5% to 20% on January 4. There is uproar from the opposition benches.
H adds: “The years of debt and spending make this unavoidable.”
Kidswear still remains exempt from VAT in this parliament.