George Osborne has told MPs “Britain is walking tall again” after five years of coalition government.
The chancellor is setting out his tax and spending plans to MPs in his final Budget before the general election.
He said a squeeze on public spending would end a year earlier than planned because of stronger growth and low inflation.
The Office for Budget Responsibility says the UK economy is growing slightly faster than thought.
It revised its growth forecast for 2015 upwards from 2.4% to 2.5% and for 2016 from 2.2% to 2.3%, said Mr Osborne.
Setting out his plans in the Commons, Mr Osborne said: “We took difficult decisions in the teeth of opposition and it worked. Britain is walking tall again.
“Five years ago, our economy had suffered a collapse greater than almost any country.
“Today, I can confirm: in the last year we have grown faster than any other major advanced economy in the world.”
‘Sacrifice’
Mr Osborne told the Commons that the government had met its 2010 target to end this Parliament with Britain’s national debt falling as a share of GDP.
He said he would use a boost in the public finances caused by lower inflation and welfare payments to pay off some of the national debt and end the squeeze on public spending a year earlier than planned.
This means that in 2019/20 spending will grow in line with the growth of the economy – bringing state spending as a share of national income to the same level as in 2000.
“The hard work and sacrifice of the British people has paid off,” said Mr Osborne.
“The original debt target I set out in my first Budget has been met. We will end this Parliament with Britain’s national debt share falling.
“The sun is starting to shine – and we are fixing the roof.”
The Budget is Mr Osborne’s last set-piece chance to woo floating voters ahead of 7 May’s general election and break the deadlock in the opinion polls, which has seen the Conservatives neck-and-neck with Labour for months.
He will insist that deficit reduction remains his top priority but will also unveil measures aimed at hard-pressed workers, such as raising the personal income tax allowance.
He will also announce plans to scrap annual tax returns and replace them with “digital tax accounts”, allowing people to manage their affairs using smartphones or computers.
Other expected measures include:
Relaxing pension rules from April 2016 to allow up to five million existing pensioners to swap their fixed annual payments for cash
A fresh crackdown on tax avoidance
Taking more people out of inheritance tax
A boost for regional growth, with possible money for a HS3 rail link between Liverpool and Hull and a tidal lagoon to generate green electricity in Swansea Bay
Some of the plans in Mr Osborne’s statement are likely to depend on a Conservative victory on 7 May – whoever wins the election is likely to set out another Budget later this year.
Labour’s Shadow Chancellor Ed Balls has accused the Conservatives of planning “extreme” spending cuts and promised to “balance the books in a fair way by reversing the Tories’ tax cut for millionaires”.
Mr Balls has pledged to raise the minimum wage, reintroduce a 10p tax rate for low earners and cut business rates for small firms, if Labour wins office in May.
Lib Dem Business Secretary Vince Cable said the Budget was a “joint effort” between his party and the Conservatives, which would include no “spectacular giveaways”.
But the Lib Dems will unveil their own tax and spending plans for the next five years on Thursday, which are likely to feature greater tax rises than planned by the chancellor.
Source: BBC
