Even before George Osborne stood up we had a good idea of much of what was in the Budget from the various leaks and reports. We knew we were getting another austerity announcement, with yet more cuts and tax grabs. And we knew the full horror of our pensions future would be laid before us.
So what does this statement mean for you?
No big giveawaysOsborne set the scene of austerity the moment he stood up, saying: "Britain's economic plan is working, but the job is not done. We need to secure the economy for the long term and the biggest risk to that comes from those who would abandon the plan." He pledged to "go on making the difficult decisions" and the "hard choices."
There was good news on the economy. Growth forecasts have been revised upwards and jobs are increasing – by 400,000 this year. Next year the unemployment rate is expected to fall to 7% and the year after to 5.6%. Government debt is down too. However, overall borrowing remains enormous, with £111 billion this year, which means we could expect another statement of giving with one hand and taking away with the other.
SpendingThere were a few areas targeted for more spending:
Young peopleOsborne confirmed that free school means will be available to all children in the first three years of primary school. This is thought to be worth £400 a year to parents.
For older teens, he announced a number of measures. JobCentre Plus will be funded to help people aged 16 and 17. The government will also be trialling a scheme for those aged 18-21 who are out of work and do not have basic English and Maths skills. They will be required to undertake training from day one or lose benefits. Then after 6 months they will have to do work experience, start a traineeship, or do a community work placement - or they will lose their benefits.
There will also be a change in the way that apprenticeships are paid for - funding employers directly through HMRC. It will pay for 20,000 more apprentices over the next three years, offer 50,000 more start-up loans, and extend the new enterprise allowance.
Osborne said the government would make it more attractive to employ young people, by abolishing employer's national insurance on young people aged up to 21 from April 2015. In a dramatic flourish he called this "abolishing the jobs tax."
For students, Osborne pointed out that each year around 60,000 young people who want to go on studying, and need a loan for it, are prevented by a cap. Next year he announced 30,000 more student places, and the year after (2015) he will abolish the cap on university places altogether. This, he said, will be financed by selling the old student loan book.
FamiliesThere were a couple of things for families too. First was the Married Couples Tax Allowance. This will allow married couples and civil partners to transfer £1,000 of personal tax allowance between them. It will only apply where one of the couple earns less than the £10,000 personal tax threshold. They can give some of their allowance to the higher-paid member of the couple, who will then save £200 in tax on another £1,000 of their income. However, it will only apply where the higher-earning member of the couple is a basic rate taxpayer - which as of April will mean earning less than £41,865. It's thought that 4 million families will benefit.
Energy billsOsborne said there would also be help on energy bills: "Not by pretending we can control the world oil price, but focusing on the levies and charges added to bills." He added: "This this week we deliver on the promise made by the prime minister to roll back those levies, an average of £50 off family bills."
TransportAnd for commuters there was good news. Next year's fuel duty rise of 2p was cancelled. Meanwhile,
next January train fares were due to go up 1% above inflation, but Osborne announced they will keep average fares flat in real terms (so they will still go up in line with inflation).
BusinessBusinesses will get lots of extra help.
For those hoping to expand overseas, he doubled the export finance capacity to £50 billion.
Those involved in infrastructure will get a package of measures. There will be major tax breaks for shale gas extraction (cutting tax on early profits by 50%), and incentives will also be altered to prioritise offshore wind over onshore. There will also be loans to kick-start large housing developments, and councils will be encouraged to sell off most expensive social housing and spend the money on many more cheaper properties.
Osborne announced some measures to promote investment in business. These include an abolition of stamp duty on shares purchased in ETF, more generous film tax relief, and reforms to encourage John Lewis-style employee ownership. From April there will also be a new tax relief on social enterprises.
Meanwhile, funding-for-lending will be refocused away from mortgages to small business lending.
RatesOne of the most leaked changes was to business rates. Rate relief was due to expire next April but will extend another year, and the government will relax the rules that discourage these firms from expanding and opening new premises. There will also be a cap on the increase in business rates – and businesses will be able to spread the payments over the year.
One unannounced change was that there will be a new reoccupation rule to halve rates for new occupants on the high street, and for the next two years every firm with a rateable value of less than £50,000 will get a discount on business rates of £1,000 off their bills.
Tax and cutsThere were also tax clawbacks and spending cuts to help balance the books.
Tax avoidanceOsbourne announced a massive clampdown on tax avoidance, using a number of different measures. He said it was: "The largest package of measures to tackle avoidance, fraud and error, which will raise £9 billion over the next five years."
CGTHe also introduced CGT on sales of second homes in the UK for those who live overseas – essentially putting them in the same position as those Brits who own a second home in the UK. From 2015 he said the government will introduce CGT on future gains.
Bank LevyThis will rise to 0.156% and he added: "The base will be broadened." His reasoning was that: "The country stood behind the banks in a crisis and it's right they should support the people in recovery."
Spending cutsAusterity will hit spending in a number of ways. Benefits were already limited to a 1% rise for most benefits (excluding the pension) for the next three years. Now the government has proposed a cap on welfare spending (again excluding pensions). At the beginning of each parliament the Chancellor will set the cap, and if it is breached, parliament will be able to vote on the breach.
Whitehall will also feel the pain. Spending will be cut by another £3 billion over the next three years, although the NHS and schools will continue to be exempt. The military special reserve will be reduced by £900m, but as a sweetener to the military, £100m in LIBOR fines will be made available to military charities.
For pensionersThe big headline news is that there will be changes to the state pension age. We already knew that state pension age will rise to 66 in 2020 and 67 in 2028. This will not change.
After that it was set to rise to 69 over the following two decades, but Osborne has brought this forward by establishing a rule to ensure that people spend no more than a third of their life retired, which is roughly where we are now, so it will rise in line with life expectancy – reviewed every five years. He said: "This is one of those difficult decisions governments have to take if they are serious about controlling the public finances."
Using current projections it means that an increase to 69 is expected in the mid 2040s, which could affect those in their late 30s, and an increase to 70 is likely in the 2050s – affecting people in their 20s. This is expected to save the government £400bn in the next 50 years
For current pensioners, a new rule should actually improve life for those who have not made enough National Insurance Contributions during their working life to entitle them to the State Second Pension. They can now make voluntary National Insurance Contributions to build up their entitlement to the second state pension in retirement. Osborne also confirmed that in April, inflationary increases to the pension would add £2.95 a week.
It was the mixture of small nuggets of good news, a big chunk of bad news, and a heap of austerity that we were all expecting.