Summer Budget 2015: Key points from Osborne’s statement

Chancellor of the Exchequer George Osborne delivers his Budget statement to the House of Commons. (Picture: PA Wire)

Chancellor of the Exchequer George Osborne delivers his Budget statement to the House of Commons. (Picture: PA Wire)

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The main announcements in the July 2015 Budget included:

• A new compulsory National Living Wage for working people aged 25 and over, starting in April 2016 at £7.20 an hour and reaching £9 an hour by 2020.

• The Office for Budget Responsibility downgraded growth forecast for 2015 from 2.5% to 2.4%, then 2.3% in 2016, then revised it up to 2.4% in 2017 and for rest of decade.

• Forecast for paying down the national deficit and running a surplus knocked back by a year from 2017/18 to 2018/19.

• New Fiscal Charter committing the country to running an overall budget surplus in normal economic times - when real GDP growth is lower than 1% a year.

• Corporation tax to be cut from 20% to 19% in 2017 and 18% by 2020.

• Tax-free personal allowance at which 20p income tax rate is payable raised from £10,600 to £11,000 next year. Rates of income tax remain unchanged.

• Higher rate 40p income tax threshold to rise from £42,385 to £43,000 from next year.

• Rises in public sector pay restricted to 1% per year for the next four years.

• Package of welfare reforms cutting £12 billion from the system, including four-year freeze for working-age benefits.

• Reduction from £6,420 to £3,850 in income level at which tax credits begin to be cut, with increase in taper rate at which the benefit is removed.

• Support for children through tax credits and universal credits to be limited to two children, affecting children born after April 2017.

• Benefits cap to be reduced from £26,000 per household to £23,000 in London and £20,000 in the rest of the country.

• Social housing tenants earning more than £40,000 in London and £30,000 elsewhere to pay rent at market rates.

• Abolition of automatic entitlement to housing benefit for 18 to 21-year-olds.

• Rate of Employment and Support Allowance aligned with Jobseekers’ Allowance for new claimants deemed able to work.

• Rents in the social housing sector to be reduced by 1% a year for the next four years.

• Permanent non-dom tax status to be abolished.

• Inheritance tax reform to allow estates worth up to £1 million to be tax-free if they include a home.

• Britain committed to meeting Nato target of spending 2% of GDP on defence for rest of this decade, while the Ministry of Defence is guaranteed real-terms increases in its annual budget.

• New bands for vehicle excise duty for brand new cars from 2017 - with most cars paying £140 standard charge. No change to VED for existing cars. All income from VED to go into new Roads Fund to pay for investment in the network.

• Climate Change Levy exemption for renewable electricity to be removed.