With the election campaign beginning in two weeks, the Chancellor had to do five things in his budget speech.
First, stress that the UK is on the right economic track.
Second, make sure he remains the choice of British businesses who pay their way and pay their taxes.
Third, choose his giveaways carefully and make sure to be seen to benefit the lower paid.
Fourth, remember that home ownership is totemic in the British mindset.
And fifth, ensure that pensioners and older workers – who he knows are likely to vote – are looked after.
With a little help from a depressed oil price and low inflation, the budget today ticked all of these boxes. Whether it is enough to propel the Conservatives back into power will depend on how strongly the electorate buys each proposition.
Economic credibility on the right track?
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- Extra money for UKTI to support trade activity
- Enterprise zones in Tees Valley, Leeds, Plymouth, Blackpool and an increase in transport investment plans for the South West
- New comprehensive strategy for the Northern Powerhouse, including devolution of some business rate revenue to Manchester
- Support for development of the Internet of Things and further ambition on broadband, with the aim of ultrafast speeds reaching virtually every home in the country
Help for the low paid
- Minimum wage increased by 20p an hour, and the apprentice rate up by 57p
- Abolition of National Insurance for under-21s (this year) and apprentices (next year)
- Personal tax allowance increased to £10,800, and £11,000 next year
- Married couples’ tax allowance increased to £1,100
Support for homeowners and families
- New Help to Buy ISA with the government topping up savings towards a deposit, turning a £12,000 savings account into £15,000
- Personal savings allowance to take 95% of savers out of savings tax
- Changes to ISA rules to provide for more flexibility to withdraw and deposit
- Cancellation of the fuel duty increase scheduled for September, saving ‘£10 per full tank’
(Mostly) pleasure for pensioners
- Cap in pension pot lifetime allowance reduced from £1.25m to £1m
- New inflation index of lifetime allowance from 2018
- New access to existing annuities by abolishing punitive tax rate of 55%+
- Support for veterans and pledges to restore RAF memorials for 75th anniversary of the Battle of Britain