Westminster blog

UPDATE: Summary of the main points of the pre-Budget speech

The following is a summary of the chancellor’s pre-Budget report; most recent statements at the top:

[Chancellor sat down at 1.18pm]

Raise starting rate on National Insurance to ensure that no one earning less than £20,000 will pay extra

All National Insurance contributions up by 0.5 per cent from 2011

Spending on overseas aid will rise to 0.7 per cent of gross national income by 2013

Further £2.5bn for military operations in Afghanistan

All public sector pay rises to be capped at 1 per cent from 2011

Public sector workers earning over £100,000 will contribute more for pensions

Any government appointment on a salary of over £150,000 will require official Treasury approval

Further £5bn in efficiency savings from government spending programmes

Government current spending growth to fall to 0.8 per cent of GDP in 2011/12 and 2013/14

Government stick to spending plans for 2010/11, remaining at £41bn

Half of additional tax revenue raised will be paid by top 2 per cent of earners

No change in overall income tax rates, but some changes to what can be classed as tax deductible

Inheritance tax allowance frozen at £325,000, suspending raise to £350,000

Employer pensions contributions included in pensions tax relief

50 per cent levy on any individual discretionary bonus in the banking sector of over £25,000 introduced immediately; expected to raise £500m

There will be no windfall tax on UK bank profits

Extra £200m for medical research

Introduction of a 10 per cent rate of corporation tax on income from biotechnology and pharmaceutical patents

Relaxing criteria to allow further exploration of another 8 oil fields

Plans to extend the UK’s superfast broadband network to be funded by a 50p per month tax on landline telephone connections

Financial support offered to 10,000 undergraduates from poor backgrounds for placements with business

Railway line between Liverpool and Preston to be electrified

Electric vehicles exempted from company car tax for 5 years and electric vans exempted for smaller period

Scheme to subsidise households upgrading their boilers announced, along the lines of the car scrappage scheme

£220m in energy efficiency grants available from April

£160m be given for public and private carbon saving schemes

“Working with banks” to ensure small and medium sized business get the credit they need; loan guarantees scheme extended for 12 months and by £500m

Pre-Budget report to be fiscally neutral

Net debt as a share of GDP will be 56 per cent for the current year and rise to 78 per cent in 2014/15 before falling

Public sector borrowing in 2014/15 forecast at £82bn

Public sector borrowing in 2013/14 forecast at £96bn

Public sector borrowing in 2012/13 forecast at £117bn

Public sector borrowing in 2011/12 forecast at £140bn

Borrowing for this year to rise to £178bn, up from earlier forecast of £175bn

Net debt as a share of GDP will fall by 2015-16

Consumer price index inflation (CPI) forecast to rise to around 3 per cent in early 2010 before falling back

Chancellor cuts provision for banking losses to £10bn from £50bn

UK GDP forecast to grow by 3.5 per cent in 2011 amd 2012

UK gross domestic product forecast now expected to fall by 4.75 per cent in 2009, a bigger reduction than the 2.25 per cent to 3.75 per cent originally forecast from April’s Budget

Child benefit and some disability allowances to rise by 1.5 per cent in April 2010

Bingo duty to be cut from 22 per cent to 20 per cent

Basic state pension will rise by 2.5 per cent in April 2010

Flexible tax credit scheme to help people on lower incomes working fewer hours has helped 400,000 people protect their income this year

Guarantee of training for 16 to 24 year olds brought forward to next month

People aged over 50 to receive “special support measures” to help them find work

Support measures for young people to avoid unemployment, including a guaranteed training scheme place, extended until September 2010

Unemployment in the UK to “keep rising for some time”

Mortgage interest support scheme to be extended for six months

Deferred increase in corporation tax for small businesses

Empty property scheme to be extended

The “Time to Pay scheme” allowing small businesses to spread tax payments, to be extended “for as long as it is needed”

Chancellor confirms value added tax will return to 17.5 per cent from January 1 – no other changes in VAT announced

To reduce special support measures now could endanger the UK’s own recovery

Problems in Dubai highlights how fragile confidence in global markets is

Risks to global recovery, including volatile oil prices, remain

UK economy will start growing by the turn of the year

Chancellor cites growing evidence of a global economic recovery, including signs of an improvement in the US housing market

Turmoil in the banking sector has hit Britain particularly hard

[The chancellor stood up to deliver his third pre-Budget report, the last before the next general election, at 12:32]

For further coverage, please see the pre-Budget report in depth page on FT.com