George Osborne lifts thousands out of 40p tax, freezes petrol duty and cuts business rates

George Osborne today finally offered relief to the middle class after six years of pain as he announced the 40p income tax threshold would rise to £45,000 next year.

The leap toward his manifesto pledge of £50,000 will lift 585,000 workers out of the 40p tax bracket altogether and comes on top of another rise in the personal allowance of tax free income – this time to £11,500.

The Chancellor also announced he would continue his fuel duty freeze and also a major overhaul of corporation tax that will hit multinationals, but hand £7billion back to small firms.

Mr Osborne announced grim figures on economic growth and the public finances – but used the opportunity to claim the independent Office for Budget Responsibility had warned Brexit would only slow the economy.

But the bad news did not stop him announcing a Budget for the ‘next generation’, which also included a controversial sugar tax to tackle childhood obesity, a lifetime of tax free savings for the young and £1.5billion for education.

Mr Osborne’s cut to the 40p rate threshold will save middle earners £400 a year.

But the tax cut will not automatically apply to 53,000 higher rate taxpayers in Scotland as the Edinburgh Government now has power to set the threshold.

The Treasury said it will be up to the Scottish Government whether they will match the £45,000 threshold.

Some 31 million earners across the UK will benefit from a further rise in the personal allowance to £11,500 from next year.

In his major announcements, Mr Osborne revealed:

• A sugar tax that could add 8p to a can of Coke, which will raise more than £500million a year to fund more sport in schools 
• 585,000 people will be taken out of the 40p tax rate as Osborne raises the threshold to £45,000
• But the tax break will not automatically apply to 53,000 higher-rate taxpayers in Scotland 
• A rise in the personal allowance will benefit 31million earners across the UK  
• £700million in new flood defences for areas hit by the winter storms paid for by an increase to the insurance premium tax 
• Hundreds of millions of support for infrastructure projects in the north including motorway upgrades, a new High Speed 3 rail link between Manchester and Leeds and a tunnel under the Pennines
• Fuel duty will be frozen again after protests from Tory backbenchers about a possible rise after the collapse in the oil price 
• Beer and whisky duties will be frozen but wine and tobacco will be increased 
• Sweeping reforms to corporation tax which will see the headline rate cut to 17 per cent but loopholes closed to raise £9billion from multinationals. New tax breaks worth £7billion will be handed to small firms and shopkeepers  

Mr Osborne said: ‘This is our Budget: one that reaches a surplus so the next generation doesn’t have to pay our debts. One that reforms our tax system so that the next generation inherits a strong economy. 

‘One that takes the imaginative steps so that the next generation is better educated.

‘One that takes bold decisions so that our children grow up fit and healthy.

‘This is a Budget that gets investors investing, savers saving, businesses doing business; so that we build for working people a low tax, enterprise Britain; secure at home, strong in the world.

‘I commend to the House a Budget that puts the next generation first.’

Unveiling his 40p tax cut, Mr Osborne said: ‘From April next year I’m going to increase the higher rate threshold to £45,000.

‘That’s a tax cut of over £400 a year.

‘It is going to lift over half a million people who should never have been paying the higher rate out of that higher tax band altogether.

‘And it’s the biggest above inflation cash increase since Nigel Lawson introduced the 40p rate almost thirty years ago.’

Mr Osborne said the policy was a key component of his Budget for ‘working people’.

The Chancellor announced corporation tax will be cut to 17 per cent by April 2020 – which he said showed Britain was ‘blazing a trail’ in the world.

He promised a ‘level playing field’ for large and small businesses as he announced a new tax crackdown on multinationals. 

After a bruising row over Google’s tax bill, the Chancellor unveiled a string of new measures to tackle tax avoidance by firms with profits of more than £5million.

He said it would create a ‘modern tax code’ that would raise an extra £9billion for the exchequer – and promised to hand £7billion of it to small firms. 

Mr Osborne announced he is raising to £15,000 the threshold for business tax relief, which he said will mean 600,000 small businesses will pay nothing in business rates and 250,000 will see them fall. 

‘I am more than doubling it and more than doubling it permanently.’ 

He said: ‘This is a Budget which gets rid of loopholes for multinationals. And gets rid of tax for small businesses. A £7bn tax cut, for our nation of shopkeepers. A tax system that says to the world: we’re open for business.

‘This is a Government that’s on your side.’ 

Outlining the new sugar tax, Mr Osborne said: ‘He said: ‘I’m not prepared to look back at my time here in this Parliament doing this job and say to my children’s generation: ”I’m sorry, we knew there was a problem with sugary drinks, we knew it caused disease but we ducked the difficult decisions and we did nothing”.

‘So today I can announce that we will introduce a new sugar levy on the soft drinks industry.

‘It will levied on the companies; it will be introduced in two-years’ time to give companies plenty of space to change their product mix.

‘It will be assessed on the volume of the sugar, sweet and drinks they produce or import; there will be two bands: one for total sugar content above five grams per 100ml, a second higher band for the most sugary drinks with more than 8 grams per 100ml.’ 

The sugar tax project will be modeled on Hungary’s sugar tax scheme, which has cut sugar content by 40 per cent.

The levy could hit consumers with an increase of up to 24p on a litre of the most sugary drinks and will raise an estimated £500million a year for the taxpayer. 

The measure aims to reduce the amount of sugar in soft drinks by 5 per cent a year.  

Launching his reply, Labour leader Jeremy Corbyn said the Budget was the ‘culmination of six years of failure.’

He said: ‘It’s a recovery built on sand on a Budget of failure.

‘He’s failed on the budget deficit, failed on debt, failed on investment, failed on productivity, failed on trade deficit, failed on the welfare cap, failed to tackle inequality in this country.’

The Labour leader added: ‘Today he has announced growth is revised down last year, this year, every year forecast.

‘Business investment revised down, Government investment revised down. It’s a very good thing that the Chancellor is blaming the last government – he was the Chancellor in the last government.

‘This Budget has unfairness at its very core, paid for by those who can least afford it.

‘He could not have made his priorities clearer – while half a million people with disabilities are losing over £1 billion in personal independence payments, corporation tax is being cut and billions being handed out in tax cuts to the very wealthy.’

Other major announcements by Mr Osborne included a freeze on fuel duty – a major concession to his backbench MPs in the face of deep party splits over the EU referendum.

Treasury officials said Mr Osborne had decided to repeat the freeze in fuel duty ‘some time ago’ – which drew questions over why he had not moved to allay fears from his backbenches before today. 

Beer, cider and spirits will also have their duties frozen – but wine and cigarettes will become more expensive.

Mr Osborne’s Budget was set against grim statistics from the Office for Budget Responsibility. 

He began his Budget by telling the Commons the economy was still ‘on course for a surplus’ and that Britain was well prepared to tackle the coming ‘storm clouds’.

As he began his eighth Budget statement as Chancellor, Mr Osborne struck an optimistic note and insisted ‘we choose the long term and choose to put the next generation first’.

The Chancellor told MPs growth forecasts were sharply down on his forecast in November while borrowing is higher than expected.

He said both the deficit and debt forecasts were higher than in November. 

He said that when he first entered the Treasury in 2010 Britain was borrowing £1 in every £4 but now it is borrowing just £1 in £14.

The budget watchdog has revised down Britain’s economic growth, predicting it will grow 0.2 per cent smaller than previously predicted.

It predicts 2 per cent growth for this year, then 2.2 per cent in 2017, falling back to 2.1 per cent growth for the two following years.

But Mr Osborne boasted that international forecasts still predicted the UK to grow faster this year than any other advanced economy in the world. 

Mr Osborne risked causing anger among his backbench MPs with a warning from the OBR that leaving the EU would lead to ‘disruptive uncertainty’.

Quoting advice from the budget watchdog, the Chancellor said: ‘The OBR say this: ‘There appears to be a greater consensus that a vote to leave would result in a period of potentially disruptive uncertainty.’

‘I believe we should not put at risk all the hard work the British people have done to make our economy strong again,’ Mr Osborne said. 

Mr Osborne admitted he had broken his target of making debt lower as a share of GDP but told MPs that in cash terms it was down £9billion.

But Mr Osborne said: ‘I report on a deficit down by two thirds, falling each year and I can report today on course for a budget surplus.’

Elsewhere in his Budget, Mr Osborne announced £700million for new flood defences and declared he was ‘rebalancing the country’ with a raft of infrastructure announcements.

The new flood money will be raised via a second increase to the insurance premium tax in the space of a year. 

Mr Osborne told MPs the money will provide a ‘boost to our resilience and flood defences’ after parts of northern England, Scotland and Northern Ireland were hit with the worst flooding in a generation over Christmas. 

Announcing a raft of infrastructure projects – mostly in the north but including Crossrail 2 in London – Mr Osborne said he was ‘rebalancing the country’ by ‘building the roads and laying the tracks’ essential to the northern powerhouse. 

The Chancellor announced a series of actions to tackle tax avoidance and evasion totalling £12 billion, including moves to end the use of ‘personal service companies’ by public sector employees to minimise their tax liabilities.

A number of TV stars – including Jeremy Paxman – have faced criticism for their use of the tax loophole. 

Other announcements in Mr Osborne’s Budget included a halving of tolls on the Severn Bridges. 

He said: ‘I’ve listened to the case made by Welsh colleagues and I can announce today that from 2018 we are going to halve the price of the tolls on the Severn Crossings,’ he told to cheers from MPs.’ 

And he revealed a £115million package for homelessness.  

The Chancellor said the surplus in 2020 would now be more than £10billion.  

The OBR predicts the economy and productivity will grow for each of the upcoming years but has revised down the figures due to a ‘materially weaker’ global economy.  

Prime Minister David Cameron earlier told the Cabinet the Budget was ‘pro enterprise, pro infrastructure, pro devolution’.

And he told his ministers the Budget ‘fully lives up to what this government is all about – transformation’. 

Ministers banged the Cabinet Table in Downing Street in appreciation of the plans, Mr Cameron’s official spokeswoman said. 

Mark Serwotka, leader of the Public and Commercial Services Union said: ‘No attempt at distraction with announcements on education and a sugar tax can disguise the reality that the Tories are damaging the economy for the vast majority of people while handing tax cuts to the wealthy and to businesses.

‘Further cuts to civil service departments would be devastating, as tens of thousands of jobs are already under threat and hundreds of offices are earmarked for closure, hitting vital services from tax collection to our justice system.’

Jim Duffy, chief executive of Entrepreneurial Spark said: ‘Reducing corporation tax to 17% by 2020 will have a transformational effect on start-ups and scale-ups, allowing ambitious entrepreneurs to reinvest more profits and create new jobs.’

Ahead of today’s Budget the Institute for Fiscal Studies, the spending watchdog, warned David Cameron’s decision to protect the health, schools, defence, pensions and international aid budgets means cuts will be deeper in areas such as local councils, courts, police and business support. 

Shadow chancellor John McDonnell, who was spotted catching the bus to Westminster today, accused Mr Osborne of planning a ‘press stunt’ instead of a Budget. 

He said: ‘Take his education announcement, it won’t address the real issue in our education system around increasing class sizes, shortage of teachers and lack of school places by just forcing schools to become academies.’

Mr McDonnell continued: ‘With only one in four schools getting any additional money for the extra hour he’s adding to the school day, we will see schools competing with each other for funding and parents will see their aspirations constrained.

‘There’s further uncertainty of funding when it comes to the infrastructure projects that the Chancellor is set to reannounce. Only one in five projects in his infrastructure pipeline is under construction.

‘And when you put all this together with the possible tax cuts that are floated, which will be paid for by more stealth taxes and cruel cuts to the disabled, this Budget from George Osborne looks to not be about the future, but taking us back to the old politics of spin and little substance.’ 

Liberal Democrat economic spokesperson Susan Kramer said: ‘The Conservatives are not the Party of the builders, they are the Party of the press release.

‘They endlessly re-announce the same projects but with no money to back them up and no shovels going into the ground.

‘If he wanted to, George Osborne could really get Britain building again, by borrowing to fund real infrastructure investment.

‘It is only because of his choice to achieve an overall surplus that this isn’t happening. He’d rather reheat old announcements than put a fire under infrastructure investment.’

Liberal Democrat leader Tim Farron said Britain ‘deserves better’.

He said: ‘On the one side there’s a Government choosing to attack the fabric of our communities – and on the other, an opposition party too focused on themselves to be able stand up for the real people in this country. 

‘We owe our constituents and we owe Britain better than this.

‘It’s time the Government showed the people in this country; the people who care for us, those who teach our children and the people who keep us safe a little more respect.’

Osborne’s budget for working people: Chancellor unveils tax giveaway for the middle classes as he raises 40p tax threshold to £45,000 and increases tax-free personal allowance 

George Osborne handed income tax cuts to millions of people today and eased the pressure on the middle class with a big increase in the 40p rate.

More than 30 million people will get a tax cut while 1.3 million of the lowest earners will be lifted out of income tax altogether when the personal allowance hits £11,500 in April 2017.

The middle class was handed a £400 a year tax cut with the change to the 40p rate as the Chancellor made a leap toward his manifesto pledge of lifting the threshold to £50,000.  

The personal allowance has steadily increased since 2010 and will reach £11,000 in April this year, while the 40p rate currently starts at £42,385.

George Osborne said the changes meant basic rate taxpayers will be paying over £1,000 less income tax than when he became Chancellor.

The increase in the higher rate threshold would take more than 500,000 people out of the 40p band.

‘It’s the biggest above-inflation cash increase since Nigel Lawson introduced the 40p rate almost 30 years ago,’ Mr Osborne said.

‘We were elected as a government for working people and we have delivered a Budget for working people.’

The increases in the personal allowance and 40p threshold will cost the Exchequer more than £2 billion in lost income tax receipts in 2017/18.

The self-employed were also given a tax cut, as Mr Osborne scrapped class 2 National Insurance contributions (NICs) from 2018.

‘That’s a simpler tax system and a tax cut of over £130 for each of Britain’s three million-strong army of the self-employed,’ Mr Osborne said.

Young savers are handed up to £1,000 a year Budget bonus with new Lifetime Isa as part of Osborne’s offer to the ‘next generation’

Young workers will no longer have to choose between saving for a home or retirement, as the Chancellor revealed a new Lifetime Isa with an up to £1,000 a year bonus in his Budget.

The new Lifetime Isa, which can be invested in stocks and shares or cash savings, will be launched next April to help people aged 18 to 40 get a foot on the housing ladder, without hindering their efforts to put aside money for their pension

Savers can tap into their bonus pot if they use some or all of the money to buy their first home, or wait until they are 60 to withdraw cash and their bonus tax-free, according to George Osborne, who unveiled the measure in today’s Budget.

The savings and the bonus can be used towards a deposit on a first home worth up to £450,000 – but the deal allows two first-time buyers to both earn bonuses then pool their resources to buy a home.

Those aged under 40 can open a Lifetime Isa and save up to £4,000 a year into it to get a maximum £1,000 bonus. They will get this for every year that they save money until age 50.

The Chancellor also delivered a huge hike in the overall annual Isa allowance from £15,000 to £20,000, with the new Lifetime Isa pot falling under this umbrella.

Those with a Help to Buy can transfer those savings into a Lifetime Isa when they are launched in 2017, or continue saving into both. However, you can only use the bonus from one to buy a house.

Those who prefer to use the allowance to save for retirement, can take out all the savings tax-free when they are 60 and get their Lifetime Isa bonus paid out.

But there will be fairly stiff penalties for making withdrawals from a Lifetime Isa for anything other than buying a home.

You can cash in at any time before you turn 60, but you lose the government bonus and any interest or growth on this, plus savers doing this will have to pay a 5 per cent charge. 

The Treasury confirmed to This is Money that all savers aged under 40 will be able to open a Lifetime Isa, even those who already own a home and are saving into a pension.

This opens up the door for investors who can find the money to benefit from both tax relief on pension contributions and the bonus on a Lifetime Isa

However, only saving for retirement through a Lifetime Isa could be less attractive than an ordinary pension where you save from untaxed income – the Government pays tax relief at your 20 per cent, 40 per cent or 45 per cent income tax rate.

Chancellor George Osborne was recently forced to ditch radical plans to axe tax relief and introduce a Pensions Isa for everyone, for fear of a backlash from voters ahead of the Brexit referendum.

The Lifetime Isa likely to be see as a half-way measure, possibly laying the groundwork for extending it once the EU referendum is over.

Mr Osborne also announced in his Budget today that other savers will be able to save tax-free to the tune of £20,000 from April 2017, .

At present, savers can stash away £15,240 in Isas shielded from the taxman, with a new limit coming into effect each April. This can be held in a combination of both cash and stocks and shares.

The move comes with the introduction of the new personal savings allowance, which comes into play next month. It formed the centrepiece of his Budget last year. 

Shares in soft drinks companies go into freefall within minutes of Osborne announcing a sugar tax in his Budget 

George Osborne today announced a 25p per litre sugar tax on fizzy drinks from 2018 – and within seconds sent shares in the soft drinks industry plummeting.

Campaigners including Jamie Oliver were celebrating the Chancellor’s Budget decision, which will raise an estimated £520 million a year.

Share prices in Coca-Cola’s British arm, Britvic, which makes 7 Up, Robinsons squash and Tango, and Irn-Bru maker A.G. Barr fell by up to 27p per share within seconds of the announcement.

The NHS has hailed the decision as brave but some have branded it a tax on Britain’s poor.

The tax will be imposed on soft drinks companies producing drinks containing more than a teaspoon of added sugar per 100ml.

The proposed tax will be levied in two bands:

• A higher band for the most sugary drinks with more than 8 grammes per 100 millilitres, which includes Coca Cola, Red Bull and Irn-Bru – adding 8p to the price of a can
• A lower band for drinks above 5 grammes per 100 millilitres, which includes Fanta and Sprite – adding around 5p to a can
• Pure fruit juices and milk-based drinks are exempt 

Chef Jamie Oliver, a vigorous campaigner for a sugar tax, said the Chancellor’s announcement that he will tax the soft drinks industry was ‘amazing news’.

He posted on Instagram: ‘We did it guys !! We did it !!! A sugar levy on sugary sweetened drinks … A profound move that will ripple around the world … business cannot come between our kids health !! Our kids health comes first … Bold, brave, logical and supported by all the right people … now bring on the whole strategy soon to come … Amazing news.’

Mr Osborne said the estimated £520 million a year raised will be spent on doubling funding for sport in primary schools.

The levy will be introduced in two years’ time, to give companies time to adapt products to reduce their sugar content.

Pure fruit juices and milk-based drinks will be excluded, and the smallest producers will have an exemption from the scheme.

Mr Osborne said that, at present, five-year-old children are consuming their bodyweight in sugar every year and experts predict that within a generation more than half of all boys and 70 per cent of girls could be overweight or obese.

No rise in beer tax AGAIN, George Osborne reveals in new victory for Britain’s drinkers

Beer taxes were frozen in today’s Budget by George Osborne.

The Chancellor has cut beer duty by 1p duty cut in his last three Budgets. But the £4billion hole in the public finances has prevented him cutting again.

The freeze still means an effective cut because duty has not gone up with inflation.

Drinkers already pay 52p per pint in tax, one of the highest rates in Europe.

In his Budget today, Mr Osborne said: ‘The action we took in the last Parliament on beer duty saved hundreds of pubs and thousands of jobs.

‘Today I back our pubs again. I am freezing beer duty and cider duty too.

‘Scotch Whisky accounts for a fifth of all of the UK’s food and drink exports.

‘So we back Scotland and back that vital industry too, with a freeze on whisky and other spirits duty this year.

‘All other alcohol duties will rise by inflation as planned.’

Mr Osborne’s decision means wine and other alcohol will go up in price as taxes and duties rise in line with inflation. 

Turning to other so-called ‘sin taxes’, Mr Osborne revealed duty on hand rolled tobacco will increase by inflation plus 5 per cent plus inflation in recognition more and more people are using instead of regular packs. 

The changes will mean tobacco taxes will add 21p to a pack of 20 cigarettes and 44p to a 30g pack of hand-rolling tobacco.

Free betting promotions online are to be brought into line with additional restrictions in place in bookies. 

Miles Beale, chief executive of the Wine and Spirit Trade Association, said 25 million spirits consumers would welcome the spirits duty freeze, but expressed disappointment that 30 million wine drinkers had been ‘singled out for a duty rise’.

He said: ‘The freeze in wine duty in 2015 has resulted in £118 million extra in revenue to the Treasury in the last 10 months, up 4%, which makes it very unfair that wine has been penalised.

‘We also deeply regret that the Government has missed this important opportunity to support the emerging English wine industry, which is a real home-grown success story that needs nurturing rather than being hit by another unfair tax increase.’ 

A tax cut for lower and higher earners: Osborne hikes personal allowance again and bumps 40p tax threshold to £45,000

UK taxpayers will be able to hold on to more of their hard-earned cash after the Chancellor increased income tax-free earnings in today’s Budget.

Delivering another jump in the personal allowance, George Osborne said  that from 6 April 2017, the start of the 2017/18 tax year, individuals will be able to earn £11,500 before they start to pay tax.

And in a boost for higher earners, he also increased the threshold at which 40 per cent income tax kicks in to £45,000 – this was the biggest giveaway to 40p taxpayers since the rate’s introduction nearly 30 years ago.

The move represents a further step in the plan to raise the personal allowance all the way up to £12,500 and Mr Osborne claimed today’s rise would provide a tax cut for 31million people.

It is also a step towards rewarding higher earners who have suffered years of fiscal drag as the failure to raise the 40p tax threshold in line with wages has pulled millions more into the tax bracket.  

The increase in the personal allowance to £11,500 is an improvement of £300 compared to the £11,200 that was originally planned to come into effect on 6 April 2017. 

It’s  also £500 more than the £11,000 allowance that comes into force next month, on 6 April 2016, and £900 more than the £10,600 allowance that applies for the remainder of this tax year.

Today’s announcement was part of the Tories’ manifesto commitment to raise the personal allowance to £12,500 by the end of parliament in 2020.  

George Osborne had previously said in November’s Autumn Statement that the personal allowance would be increased in 2017/18 to £11,200.

The Treasury said today’s rise in the personal allowance ‘continues to ensure that no-one working 30 hours per week on the National Minimum Wage will pay income tax in 2017/18, and will bring the total number of taxpayers taken out of income tax since the start of this parliament to 1.3 million.

‘As a result, a typical basic-rate taxpayer will pay over £1,000 less income tax in 2017/18 than in 2010/11.’

The hike in the threshold at which individuals have to pay the high rate 40 per cent tax to £45,000 is £2,000 more generous than the £43,000 that comes into effect on 6 April 2016 and £1,400 than it was originally due to rise to in April 2017 – as previously announced in November’s Autumn Statement.

In the current tax year, individuals start paying 40 per cent tax when they earn £42,385.

The Treasury said the move to the £45,000 threshold ‘will be the biggest above-inflation cash increase to this threshold since it was introduced by Lord Lawson in 1989. 

‘This delivers the Government’s ambition to reverse the trend whereby an increasing number of individuals are faced with paying the higher rate. In 2017/18, there will be 585,000 fewer higher rate taxpayers than at the start of the parliament.’

George Osborne promises to make Britain ‘fit for the future’ as he uses the Budget to announce new railways, upgraded motorways and Europe’s longest road tunnel 

George Osborne will today promise to offer Britain ‘long term solutions to long term problems’ when he presents his Budget.

At the centre of his plans will be a raft of policies to deliver major new pieces of infrastructure, including £60million to develop High Speed 3, £80million for Crossrail 2 and £75million to explore a road tunnel under the Pennines.

Mr Osborne will place a new high speed rail link between Manchester and Leeds and the 18-mile road tunnel linking Manchester and Sheffield at the heart of his plans for the Northern Powerhouse. 

The projects – which are all in the early phases of development – will all cost billions more to build in the coming decades.

But Mr Osborne has insisted ‘long term solutions’ are crucial for the country.  

Ahead of today’s statement, he said: ‘In the Budget, we are not going to go for short term fixes in this uncertain world, we are going top have long term solutions to Britain’s long term problems and the Budget is going to make sure Britain is fit for the future.

‘I think an absolutely crucial part of improving the economy of our country is making sure we invest in our northern powerhouse and improving transport links across the north of England will be a huge boost to the economy of the north of England and the whole of the United Kingdom.’

Other infrastructure announcement due in today’s Budget include £161million for Highways England to accelerate upgrades to the M62.

He will also create a £1.2billion fund for 30,000 starter homes on brownfield sites. 

Shadow transport secretary Lilian Greenwood has questioned whether any of the trailed projects will ever be delivered.

She said: ‘Investment in transport infrastructure for the North is vital but under this Government there has been a huge gap between rhetoric and reality.’

George Osborne’s aides scramble to calm fears that all pupils will be forced to study maths until they turn 18 

Treasury officials were forced to row back after George Osborne sent schools and pupils into a panic today with suggestions that all students would be forced to study maths until they turned 18.  

A spokeswoman for the Chancellor clarified comments he made in today’s Budget saying the Government was ‘going to look at teaching maths to 18 for all pupils’. 

She said a government review is under way on how to help improve how maths is taught in schools but added that he had not promised to make the subject compulsory for A-level.  

It was one of a number of radical reforms the Chancellor unveiled in a massive shake-up to the education system in his Budget today.  

Mr Osborne based his Budget on the ‘putting the next generation first’ as he announced an end to ‘the Victorian tradition’ of the school day finishing at 3.30pm. 

From next year, hundreds of thousands of secondary pupils will stay in school for at least an hour longer each day doing extra lessons, sports or art.Head teachers will be invited to bid for extra funding to provide the activities and pay overtime to staff.

Mr Osborne also announced plans to convert all state schools into academies by 2020. 

Currently 85 per cent of primary schools and 40 per cent of secondary schools are still run by their local education authority but extra funding unveiled by the Chancellor today will help them move to academies by the end of the decade. 

He told MPs: ‘I can announce that we are going to complete the task of setting schools free from local education bureaucracy, and we’re going to do it in this Parliament.

‘I am today providing extra funding so that by 2020 every primary and secondary school in England will be, or be in the process of becoming, an academy.’ 

The announcement in his Budget is intended to drive up standards and make life easier for working parents. 

But teaching unions and some critics have demanded assurances that it will improve learning – not just provide extended childcare.

Russell Hobby, general secretary of the National Association of headteachers, said: ‘The idea that most schools shut at 3.30 in the afternoon is itself pretty outdated, but we have no problem with extra money to help them in the activities they offer.

‘Any expansion of hours must be properly funded, as school budgets are extremely tight. There’s not a lot of evidence internationally linking a longer academic day to higher standards, but extracurricular activity is usually valuable.

‘As long as this remains at the discretion of schools to meet the needs of their pupils, then it seems positive.’

Claire Paye from Mothers at Home matter – a campaign group whose aims include the protection of family life told MailOnline: ‘A lot of schools already offer hours beyond the typical 3.30pm, so more funding would be welcome.

‘But these extra hours should not just be extra childcare with children who are just sat in their classroom on their tablets. They need to be taught, do sport or music.

‘We would also be disappointed if this was something later extended to primary schools and pre-schools.’

There are also concerns about the level of funding made available by the Chancellor. 

Malcolm Trobe, interim general secretary of the Association of School and College Leaders, said: ‘It is highly divisive that the funding will only be available to 25 per cent of secondary schools as this will potentially disadvantage children at the three quarters of schools which miss out. Many schools already provide after-school activities so we also need to understand how this new provision will be differentiated from the existing provision and what will be expected of schools.’

To the fury of teaching unions, the Government will also force all schools to become academies by 2020 – bringing an end to decades of local authority control. 

Mr Osborne promised an extra £1.5billion of funding over this Parliament, saying: ‘It is simply unacceptable that Britain continues to sit too low down the global league tables for education. Now is the time for us to make the big investments that will help the next generation.’ 

In his conference speech last year, David Cameron said he wanted to make local authorities running schools to be a ‘thing of the past’.

He announced the Government would create 500 more free schools and convert all council-run schools to academies.  

Unemployment falls by 28,000 as wage growth improves in pre-Budget boost for George Osborne 

George Osborne was given a pre-Budget boost this morning as official figures revealed another fall in unemployment, while the number of people in work hit a new record. 

It means the rate of unemployment in the UK economy remains at its ten-year low of 5.1 per cent after the jobless number fell to 1.68million between November and January – a drop of 171,000 compared to the previous year.

The number of people in work hit a new record high of 31.42million, but Labour said this figure failed to take into account the rise in part-time jobs and zero-hours contracts.  

The Chancellor was also given a boost as the Office for National Statistics figures revealed an improvement in wage growth.  

Average earnings rose by 2.1 per cent in the year to January – a 0.2 per cent boost from the previous month.  

The number of people claiming Jobseeker’s Allowance has fallen to 716,700 – the lowest number since 1975 after the latest 18,000 drop last month.

Meanwhile the number of job vacancies rose by 10,000 on the previous month to 768,000, the ONS figures revealed.  

Employment reached a new record high of 31.4million after another increase of 116,000 between November and January. 

The employment rate has increased steadily for the last two years, but Labour say this fails to tell the full story of part-time work and zero-hours contracts, which do not guarantee a minimum number of hours for workers. 

The figures showed that the number of people in work grew by nearly half a million over the last year.  

George Osborne insists the economy will be even WORSE than today’s dismal forecasts if Britain backs Brexit as the referendum looms over the Budget 

George Osborne warned the economy would be worse off if Britain backs Brexit in June as the EU referendum loomed large over the Budget today.

The Chancellor sparked controversy by quoting the independent Office for Budget Responsibility in aid of his claim Britain was ‘stronger and better off in the EU’.

The Vote Leave campaign accused Mr Osborne of dragging a politically neutral organisation into the referendum.

Mr Osborne’s Budget had already been influenced by the referendum as he abandoned plans for a radical pensions overhaul, reportedly to avoid a fresh battle with Tory MPs.

And he backed off from suggestions of a rise in fuel duty amid vigorous protests from his party.

In his speech, Mr Osborne said: ‘Over the next few months this country is going to debate the merits of leaving or remaining in the European Union, and I have many colleagues whom I respect greatly on both sides of this argument.

‘The OBR correctly stay out of the political debate and do not assess the long term costs and benefits of EU membership.

‘But they do say this, and I quote them directly: “a vote to leave in the forthcoming referendum could usher in an extended period of uncertainty regarding the precise terms of the UK’s future relationship with the EU.

‘This could have negative implications for activity via business and consumer confidence and might result in greater volatility in financial and other asset markets”.’ 

Mr Osborne added: ‘Britain will be stronger, safer and better off inside a reformed European Union.

‘I believe we should not put at risk all the hard work that the British people have done to make our country strong again.’ 

Vote Leave Chief Executive Matthew Elliott said: ‘There is one budget the Chancellor didn’t touch today – the £350 million of taxpayers’ money he hands to Brussels every week.

‘Nor could he cut taxes like VAT which we’ve given up control of to the EU Commission.’

‘Disappointingly, the Chancellor sought to politicise the OBR and drag it into his campaign to keep us in the EU despite the OBR making clear that it was not making a judgment about the referendum.

‘If we want to take back control of our economy and our democracy so the Government can spend our money on our priorities, the only safe option is to Vote Leave’.

Motorists are saved from higher fuel duty after George Osborne steers clear of Tory anger and freezes petrol tax AGAIN

Despite being 1/2 odds on to rise ahead of today’s announcement, fuel duty will remain frozen for the sixth consecutive year, George Osborne confirmed in his Budget statement.

In what came as a welcome surprise to motorists, the tax on petrol and diesel remains at 57.95p per litre despite plans buried deep in last year’s Treasury documents alluding to an increase in-line with inflation.

But motoring industry experts suggested drivers shouldn’t celebrate too soon: some warned fuel costs could still increase in the near future, with two supermarkets already swelling forecourt prices in response to recovering oil values.

The Chancellor, buoyant in his commitment to extending the freeze at 57.95p per litre, said fuel duty was ‘the tax that keeps Britons on the move’ when he addressed the Commons on Wednesday afternoon. 

With faltering oil prices ushering fuel to six-year lows since the turn of the new year, some saw the nation’s drivers as a soft target for a tax hike.

But, after acknowledging the lower cost of fuel in recent months, the Chancellor said motorists wouldn’t be targeted just because oil prices had nosedived.

The decision also went against the planned rise he’d failed to mention in the Autumn Statement at the end of last year.

‘In the last 12 months petrol prices have plummeted. That is why we penciled in an inflation rise,’ the Chancellor said on Wednesday.

‘But I know that fuel costs still make up a significant part of household budgets and weigh heavily on small firms. 

‘Families paid the cost when oil prices rocketed; they shouldn’t be penalised when oil prices fall.’ 

The announcement isn’t likely to signal a long-term extension of the £1-a-litre fuel costs motorists have been enjoying throughout 2016, though. 

In fact, some drivers would have noticed pump prices were already on the up a day ahead of the Chancellor’s Budget statement.

Both Tesco and Morrisons raised the cost of petrol and diesel on Tuesday, with retailers looking to offset the recovery of oil from February’s $26 lows to almost $40 a barrel this week. 

Robot cars and lorries will be tested on British motorways before 2020 as the Budget paves the way for driverless vehicles

Robot vehicles will take to British roads before 2020 after George Osborne used the Budget to announce regulatory barriers will be swept away and research will be funded.

A £15million ‘connected corridor’ will link London and Dover to allow vehicles to communicate wirelessly with infrastructure and other vehicles.

Mr Osborne said he wanted Britain to pioneer an industry which would be worth £900billion worldwide by 2025.

Mr Osborne said: ‘Driverless cars could represent the most fundamental change to transport since the invention of the internal combustion engine. Naturally we need to ensure safety, and that’s what the trials we are introducing will test.

‘If successful, we could see driverless cars available for sale and on Britain’s roads, boosting UK jobs and productivity.’ 

Trials of driverless cars on local roads in Bristol, Coventry and Milton Keynes, and Greenwich are already being worked on.

John McDonnell blasts the Budget as ‘morally reprehensible’ as he claims a THIRD of the cuts in 2021 will hit the disabled

Shadow Chancellor John McDonnell slammed the Budget as ‘morally reprehensible’ today after highlighting cuts to disability benefits.

After analysing the Budget Red Book, Mr McDonnell said a third of the cuts at the end of the spending period would come from reductions to the personal independence payment (PIP).

In a post-Budget briefing, the shadow chancellor said he would return corporation tax to its 2010 level to raise the money necessary to make the change he wanted.

Mr Osborne slashed disability benefits by a further £1.2billion in today’s Budget as he worked towards his goal of cutting £12billion off the welfare budget by 2020.

Mr McDonnell said the move stood in contrast to income tax cuts for the well-off via a change to the 40p rate – though he admitted Labour would not oppose moving the threshold to £45,000.  

The cuts to PIP payments will take effect from the start of next year and will make up about a quarter of the £4billion of public spending cuts Mr Osborne announced today.

Those affected by cuts to PIP include 640,000 people who need help dressing or undressing or using the bathroom.

The prospect of PIP cuts has already caused angry protests at Westminster and follows the bitter row over the ‘bedroom tax’. But Whitehall sources insist the changes are ‘fair and sensible’ and there has been extensive consultation with disability groups. They will save £1.2billion a year by 2020/21.

The cuts will help ministers get back on track with their commitment to limit the cost of social security. The Government breached its self-imposed benefits cap last November when the Chancellor scrapped plans to make cuts to tax credits.

Mr Osborne said at the time that this would still cut £12billion from the welfare bill, but would do so ‘in a way that helps families, as we make the transition to our National Living Wage [a new higher minimum wage]’.

Tories will MISS their target of cutting net migration to under 100,000 by 2020, budget watchdog warns 

The Tories will fail to cut net migration to their target of ‘tens of thousands’ – even under the most generous forecasts, according to the budget watchdog. 

In its assessment of George Osborne’s Budget decisions today, the Office for Budget Responsibility (OBR) published different scenarios on future immigration figures and under each it finds that David Cameron’s pledge to cut net migration to under 100,000 will not be met before 2020.

Last year 323,000 more people came to the UK than left despite the Tory election manifesto repeating the pledge it made in 2010 to reduce net migration to ‘tens of thousands’. 

The OBR forecasts net migration will fall over the next few years but could still be around 270,000 a year by 2020. 

And even by its most generous forecast, it still predicts that more than 100,000 people will arrive in the UK than emigrate in 2020 – meaning the Tories will have broken their flagship immigration pledge for two Parliaments in a row. 

The OBR states: ‘Even under the low scenario, net inward migration does not quite drop into the ‘tens of thousands’ sought by the Government within the forecast period.

Last month figures released by the Office for National Statistics revealed that net migration fell for the first time since the end of 2013. 

But at an estimated 323,000 in the year to September, net migration is more than three times the Government’s aim of less than 100,000 and has now been running at an annual level of more than 300,000 for almost two years. 

The figures showed a rise of 31,000 on the previous year, with the rise driven by a dramatic 38 per cent increase in the number of Romanian and Bulgarian migrants coming to Britain – and the ONS release today said 10,000 of the 55,000 arrivals were not here for work purposes.

Responding to the figures last month Home Secretary Theresa May said net migration remained ‘too high’ but insisted Mr Cameron’s deal with the EU would ‘clamp down’ on abuses and reduce the pull factor of migration.

The latest migration figures also revealed that net migration from the EU was at 172,000 in the year to September. 

Households will be hit with bigger insurance bills after George Osborne announces SECOND hike to premium tax in five months, with all the £700m raised going to flood defences 

Households will face bigger insurance bills after the Chancellor announced a second hike to premium tax in five months.

Families are already paying on average an extra £100 per year because of the rise in November, triggered by floods in northern England.

But George Osborne unveiled another increase in insurance premium tax, from 9.5 per cent to 10 per cent, during his Budget today. 

Mr Osborne said he would raise the standard rate of insurance premium tax by ‘just half a percentage point – and commit all the extra money we raise to flood defence spending’.

November’s premium tax hike was even steeper, rising from 6 per cent to 9.5 per cent.

Some £700 million generated from the extra insurance taxes will go to strengthening and maintaining defences in areas ravaged by recent floods.

Premium tax hikes will affect policies for cars, households, private medical insurance and even pets.

Experts warned the changes will hit the youngest, oldest and sickest the most, as well as those who live in flood-prone areas or inner-cities. These households already pay more for their motoring, medical or home insurance.

Young drivers will pay on average an extra £50 a year under the two increases, the AA said. It urged the Government not to treat young motorists as ‘wallets on wheels’.

Older drivers, who already pay high premiums, are also likely to be hit harder by the increase.

Cash-strapped households could feel forced to reduce or even abandon their insurance cover, under what the Association of British Insurers warned was a ‘raid’ on responsible consumers.