George Osborne's pre-election Budget: Millions of workers in line for income tax boost
MILLIONS of workers are to get a popular tax cut in the last Budget before the election, George Osborne disclosed yesterday.
The Chancellor is expected to raise the personal income allowance to about £11,000.
Under the proposal, hundreds of thousands of people on low wages will not pay income tax at all while millions more will benefit from a cut in what they pay.
He will use his proposed measures on Wednesday to speed up house building, improve broadband links and boost science and business growth across Britain.
Mr Osborne said yesterday on BBC One’s Andrew Marr Show there would be “no giveaways, no gimmicks”.
But he offered voters the prospect of rewards, at the end of almost a decade of austerity, if they stick with the Conservatives in May’s election.
The Chancellor also said he would further relax pension rules, allowing up to five million existing pensioners to swap their fixed annual payments for cash.
He said: “It’s all part of trusting people who have worked hard and saved hard all their lives.
"It’s all part of having a long-term economic plan where we build our country on savings and investment.”
Mr Osborne dismissed claims that pensioners could end up blowing their nest-eggs on fast cars and holidays.
He said: “That is a very patronising attitude to take towards people who have shown responsibility, saved through their lives, saved for a pension.”
It’s all part of trusting people who have worked hard and saved hard all their lives
Mr Osborne says his annual financial statement will include economic powers for northern cities and the creation of 28 zones to build 45,000 homes on brownfield land.
He is expected to say that the Tories are on course to eliminate the deficit in 2018, paving the way for big cuts to income tax.
The Chancellor refused to comment on economic forecasts. However, he told Andrew Marr: “This Budget is all about securing a truly national recovery, from building a northern powerhouse, connecting up other regions of our country, committing to long-term plans that support science and transport.
“So no giveaways, no gimmicks – a Budget for the long term.”
The Tories received a boost at the weekend when an independent report from the House of Commons Library praised the strong state of the economy.
The paper described Labour’s spending plans as “looser” than Tory proposals.
Mr Osborne is also proposing to slash inheritance tax, allowing millions of people to pass on their homes to their children without paying tax.
The changes were first proposed by the Chancellor while in opposition in 2007.
The long-awaited reform could be announced in this week’s Budget.
However, if the reform does not make it into the Budget, it is likely to feature in the Tory manifesto, which is expected to be unveiled within a fortnight.
Mr Osborne is reported to be still considering the best way to alter the tax.
