Chancellor George Osborne will unveil his spending plans in the annual Budget to Parliament in the House of Commons at 12.30pm today.
What we already know...
A fresh round of government spending cuts
Osborne warned over the weekend that a slowdown in global growth would lead to further fiscal tightening, saying he would use the Budget to slash 50p in every £100 the government spends by the end of the decade, or around £4bn, from the Treasury’s balance sheet.
More than £300m in funding for Crossrail 2 and HS3
Osborne will use the Budget to commit to more than £300m in new infrastructure spending, including £80m to fund the development of plans for Crossrail 2 and £60m to draw up plans to introduce high-speed rail in the north. In a major move for London transport, the chancellor will also say for the first time that Crossrail 2 is a “priority scheme” and commit to introduce a Crossrail 2 Bill by the end of the parliament.
A green light for driverless cars on Britain’s motorways
The chancellor is due to announce the first trials of driverless cars on British motorways and vow to spend £15m creating a “Connected Corridor” from London to Dover to help driverless cars communicate wirelessly with existing infrastructure.
What might happen...
Another hike in the insurance premium tax (IPT)
The AA warned over the weekend that the chancellor is considering raising the basic rate of insurance premium tax (IPT) from 9.5 per cent to 12.5 per cent. Just last November, Osborne increased the basic rate of IPT from 6 to 9.5 per cent – meaning that the stealth tax on more than 50m motor, home, medical and pet insurance premiums could be set to double in less than six months.
The first increase in fuel duty in five years
Osborne froze fuel duty in 2011, and given persistently low oil prices and the large amount an increase in the tax could net for the Treasury – an extra 2p of duty would bring in about £1bn – many believe the chancellor may announce a rise in the Budget. But the move would prove unpopular, with backbencher MPs from multiple parties opposing any increase.
An income tax break for middle and higher earners
Osborne is reportedly looking at increasing the amount people have to earn before they start paying the higher 40p tax rate to £43,000, from the current threshold of £42,385. The chancellor could also slash the top rate of tax from 45p to 40p, which would benefit people earning more than £150,000 a year.
Higher taxes on alcohol, tobacco and other vices
Brewers are betting on another 1p to be taken off beer duty, but Osborne is said to be looking at increasing taxes on alcohol, as well as imposing a minimum tax on cigarettes.