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Budget 2015: George Osborne to unveil pre-election package Budget 2015: George Osborne to unveil pre-election package
(about 1 hour later)
George Osborne is to set out his tax and spending plans in the Budget later - his last before the election. George Osborne will say the UK faces a "critical choice" at the election when he delivers his Budget later.
The chancellor has pledged "no giveaways" or "gimmicks" in his speech, which will be delivered at 12:30 GMT. An increased personal tax allowance, reforms to pensions and scrapping paper tax returns are expected.
Lower-than-expected inflation has generated a £6bn windfall through lower interest payments and a reduction in the annual up-rating of welfare.Lower-than-expected inflation has generated a £6bn windfall through lower interest payments and a reduction in the annual up-rating of welfare.
Labour said the Conservatives were planning "more extreme spending cuts" after the general election.Labour said the Conservatives were planning "more extreme spending cuts" after the general election.
Alongside expected pension reforms, Mr Osborne is likely to scrap the annual paper tax return, in favour of a drive towards digital records, and further increase the personal income tax allowance. Speaking after a morning meeting of Cabinet ministers, Lib Dem Business Secretary Vince Cable said there would be no "spectacular giveaways" in the Budget.
It would be "totally irresponsible" if it was a "giveaway Budget", he told BBC News.
'Critical choice'
BBC deputy political editor James Landale said Mr Osborne's task was clear.BBC deputy political editor James Landale said Mr Osborne's task was clear.
"He will try to use the Budget to end the deadlock in the opinion polls and give the Conservatives the political momentum they need to win another term."He will try to use the Budget to end the deadlock in the opinion polls and give the Conservatives the political momentum they need to win another term.
"The chancellor will do that by trying to show voters the recovery is being felt by everyone across the country.""The chancellor will do that by trying to show voters the recovery is being felt by everyone across the country."
'Critical choice' Mr Osborne's statement follows immediately after Prime Minister's Questions in the Commons.
Ministers have been arriving at Downing Street for a Cabinet meeting ahead of Mr Osborne's statement, which follows immediately after Prime Minister's Questions in the Commons. The Budget on the BBC
The chancellor is expected to say: "The critical choice facing the country now is this: do we return to the chaos of the past? Or do we say to the British people, let's work through the plan that is delivering for you?The chancellor is expected to say: "The critical choice facing the country now is this: do we return to the chaos of the past? Or do we say to the British people, let's work through the plan that is delivering for you?
"Today we make that critical choice: we choose the future. We have a plan that is working - and this is a Budget that works for you.""Today we make that critical choice: we choose the future. We have a plan that is working - and this is a Budget that works for you."
His Budget statement comes against a backdrop of a strengthening economic recovery, with a rosier fiscal picture expected as a result of falling oil prices dragging down inflation.
Mr Osborne will announce the independent Office for Budgetary Responsibility's latest UK economic growth and borrowing forecasts for the coming years.Mr Osborne will announce the independent Office for Budgetary Responsibility's latest UK economic growth and borrowing forecasts for the coming years.
It is expected the OBR will report an improved growth forecast and revise down its borrowing figures, meaning the chancellor could have up to £6bn extra to play with.It is expected the OBR will report an improved growth forecast and revise down its borrowing figures, meaning the chancellor could have up to £6bn extra to play with.
Experts say this would provide Mr Osborne with some leeway for pre-election sweeteners.
Or he could decide to ease up on planned spending cuts to counter Labour claims that the Conservatives want to cut public spending to levels not seen since the 1930s.
The Budget on the BBC
'Extreme cuts''Extreme cuts'
Mr Osborne has already promised to further relax pension rules from April 2016 to allow up to five million existing pensioners to swap their fixed annual payments for cash.Mr Osborne has already promised to further relax pension rules from April 2016 to allow up to five million existing pensioners to swap their fixed annual payments for cash.
It follows a series of pension reforms introduced by the government to change the way people fund their retirement.It follows a series of pension reforms introduced by the government to change the way people fund their retirement.
Shadow chancellor Ed Balls said the reality was that working families were worse off after five years of the coalition government.Shadow chancellor Ed Balls said the reality was that working families were worse off after five years of the coalition government.
And he added: "The Tories are planning more extreme spending cuts after the election, which go way beyond balancing the books and will put our NHS at risk."And he added: "The Tories are planning more extreme spending cuts after the election, which go way beyond balancing the books and will put our NHS at risk."
Mr Balls cited analysis by the Institute for Fiscal Studies which he said showed that tax and benefits changes introduced since 2010 have cost families on average £1,127 a year.Mr Balls cited analysis by the Institute for Fiscal Studies which he said showed that tax and benefits changes introduced since 2010 have cost families on average £1,127 a year.
He pledged that a Labour budget would put working families first and "save" the NHS.
Labour has pledged to raise the minimum wage, reintroduce a 10p tax rate for low earners and cut business rates for small firms, if it wins office in May.Labour has pledged to raise the minimum wage, reintroduce a 10p tax rate for low earners and cut business rates for small firms, if it wins office in May.
"And we'll balance the books in a fair way by reversing the Tories' tax cut for millionaires," Mr Balls added.
Tax thresholdsTax thresholds
Vince Cable, the Lib Dem business secretary, said it was important for the chancellor to "get the balance right", saying that the scope for tax cuts is "very, very limited". The amount of money people can earn before paying income tax has risen from £6,475 to £10,600 since 2010, with both of the coalition partners promising to raise it further, to £12,500, in the next parliament.
"In fact, after the next election, taxes are almost certainly going to have to rise. However, the Institute for Fiscal Studies has said low-paid workers would benefit more from a lift in the National Insurance threshold, which currently starts at £7,956.
"Obviously for people on low pay it is important we help them both through the minimum wage and lifting the tax threshold, but the scope for this is very limited."
Lib Dem Deputy Prime Minister Nick Clegg has said he has been pressing the chancellor for a further increase in the amount of money people can earn before paying tax.
It has risen from £6,475 to £10,600 since 2010, with both of the coalition partners promising to raise it further, to £12,500, in the next parliament.
The Institute for Fiscal Studies, however, has said low-paid workers would benefit more from a lift in the National Insurance threshold, which currently starts at £7,956.
The Lib Dems will set out their own alternative Budget on Thursday to show how they would tax, spend and borrow over the next five years.The Lib Dems will set out their own alternative Budget on Thursday to show how they would tax, spend and borrow over the next five years.
Speaking on BBC Radio 4's Today programme, former Chancellor Ken Clarke said while some measures already being trailed were "quite important", most would seem "peripheral in a few days' time".Speaking on BBC Radio 4's Today programme, former Chancellor Ken Clarke said while some measures already being trailed were "quite important", most would seem "peripheral in a few days' time".
He said the key thing to get across was that Mr Osborne had "done a good job".He said the key thing to get across was that Mr Osborne had "done a good job".
But former Labour Treasury Minister Kitty Ussher said the public was under the impression most of the cuts had already been made, and suggested the chancellor "might actually want to row back a bit and say we're not cutting back so much".But former Labour Treasury Minister Kitty Ussher said the public was under the impression most of the cuts had already been made, and suggested the chancellor "might actually want to row back a bit and say we're not cutting back so much".
Business callsBusiness calls
Business groups have been lobbying the chancellor over their own priorities - including a freeze or cut in passenger air duty, reductions in charges on North Sea energy firms and moves to use the tax system to encourage research and development. Business groups have been lobbying the chancellor over their own priorities - including a freeze or cut in air passenger duty, reductions in charges on North Sea energy firms and moves to use the tax system to encourage research and development.
John Cridland, director general of the CBI, urged the chancellor "not to put politics ahead of economic growth and investment", emphasising the need for a "responsible" budget. CBI director general John Cridland urged the chancellor "not to put politics ahead of economic growth and investment".
He said Mr Osborne should build on the economic recovery by creating a "stable investment environment for ambitious firms looking to expand". TUC general secretary Frances O'Grady told BBC News the chancellor should avoid "extreme and unnecessary cuts".
If there was room, he added, the chancellor should expand free childcare to help working families. She said: "We want to see a positive vision for Britain that's about investment in decent jobs, fair pay... and doing something about that housing crisis."
What do you hope will be announced in the Budget? You can share your views by emailing haveyoursay@bbc.co.uk. If you are available to speak to a BBC journalist, please include a contact telephone number.What do you hope will be announced in the Budget? You can share your views by emailing haveyoursay@bbc.co.uk. If you are available to speak to a BBC journalist, please include a contact telephone number.
Have your sayHave your say