Budget 2010: Pain now, more pain later in austerity plan

Here is a summary of Chancellor George Osborne’s first Budget! Accordiong to Darling; “Government is taking a huge risk with the Economy” but Osbourne says this is unavoidable!

Who is right? We don’t know yet…

Budget 2010: Pain now, more pain later in austerity plan

Child benefit will be frozen for 3 years!

VAT: Rate will rise from 17.5% to 20% from January 4, 2011

Tax credits: Reduced for families earning over £40,000 next year.

Housing benefit: New maximum limit of £400 a week for properties with more than three bedrooms, £250 a week for a one-bedroom flat, £290 for a two-bedroom property and £340 for a three-bed property, to save £1.8bn a year by the end of the Parliament.

Unemployed people will see their Housing Benefit cut by 10%, after 12 months of claiming Jobseekers Allowance from April 2013.

Public sector workers face a two-year pay freeze if they earn over £21,000. Those earning less £21,000 will get a flat pay-rise worth £250 in both years.

From April 2011, the threshold at which employers start to pay National Insurance will rise by the rate of inflation plus £21 per week.

The economy is predicted to grow by 1.2 % this year, 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and in 2015.Public sector net borrowing will be £149bn this year, £116bn next year, £89bn in 2012-13 and £60bn in 2013-14.

By 2014-15 borrowing to reach £37bn, falling to £20bn in 2015-16.