Budget 2013: an overview
A high-level overview of the Budget, including infographics and a regional map.
The Chancellor of the Exchequer with the Budget Box
The government’s plan for the economy, first set out in June Budget 2010, is based on:
- fiscal responsibility to deal with our debts with a credible deficit-reduction plan
- monetary activism to support demand and keep interest rates low
- supply-side reform to help businesses create jobs and deliver lasting prosperity
This Budget will help those who aspire to work hard and get on, buy a home, start a business or save for retirement.
The economy and public finances
The ongoing impact of the financial crisis, the euro area crisis and the effect of inflation on incomes and business costs, have produced a more subdued and uneven recovery than expected. In response, this Budget announces:
- increasing capital spending plans by £3 billion a year from 2015 to 2016, funded through reductions in current spending
- a reduction in departmental spending of £1.1 billion in 2013 to 2014 and £1.2 billion in 2014 to 2015, the schools and health budgets remain unchanged
- public sector pay awards will be limited to an average of up to 1% in 2015-16
Growth
This Budget sets out further action to build a stronger economy, with help for UK businesses to create jobs - and help for people to buy their own home, including:
- making the UK tax system the most competitive in the G20 by reducing the main rate of corporation tax to 20% – the joint lowest level in the G20
- giving businesses and charities entitlement to a £2,000 per year employment allowance towards their employer National Insurance Contribution (NICs) bill, from April 2014, to reduce the cost of hiring staff
Growth: Infographic
View the Growth infographic on Flickr
- a £5.4 billion package of financial support to tackle long-term problems in the housing market including the launch of Help to Buy - which offers 2 schemes aimed at helping those who want to get on, or move up, the housing ladder
Help to Buy: Infographic
View the Help to Buy infographic on Flickr
- providing £1.6 billion of funding for an industrial strategy – from this fund the government will work with industry to create an Aerospace Technology Institute
- taking forward Lord Heseltine’s recommendation on the creation of a Single Local Growth Fund
Read more about the Heseltine review
Fairness
This Budget includes measures to build a fairer society by making the tax and welfare system fairer, by supporting aspiration and by keeping costs down for households and business, including:
- meeting the commitment to make the first £10,000 of people’s income free from income tax a year ahead of schedule – the personal allowance will be increased by £560 to £10,000 in 2014 to 2015; by April 2014, 2.7 million individuals low-income people under 65 will have been lifted out of income tax altogether
- cancelling the fuel duty increase that was planned for 1 September 2013 to support motorists and businesses – fuel duty will have been frozen for nearly 3 and a half years, with pump prices 13p per litre lower from April 2013 than under previously announced plans
Fairness: Infographic
View the Fairness infographic on Flickr
- introducing a tax-free childcare scheme so that working families can pay for childcare effectively tax-free
Tax-free Childcare: Infographic
View the Tax-free Childcare infographic on Flickr
- introducing the single-tier State Pension and implementing the £72,000 cap on social care costs from April 2016; together these changes will help ensure the country can afford to support an ageing population, while at the same time help ensure everyone knows what support they will receive in old age
- cancelling the beer duty escalator and reducing general beer duty by two per cent from 25 March 2013 – worth a penny on a pint of beer
- a significant crack down on tax avoidance and evasion, which will in total raise over £4.6 billion in new revenue over the next 5 years
- the Chancellor also announced new steps to ensure active monetary policy continues to play a full role in supporting the economy with an updated remit for the Monetary Policy Committee
Read more about the Monetary Policy Committee
Where you live
Our regional map shows how the measures announced in Budget 2013 will affect the people and places near you.
Download the