LONDON (Reuters) - Chancellor George Osborne delivered 2013 budget on Wednesday. Here are the main measures he introduced.
Osborne paved the way for changes at the Bank, asking it to report in August on the merits of setting “intermediate thresholds” for monetary policy.
Such changes might make the Bank operate in a way similar to the U.S. Federal Reserve which has given increasingly explicit signs about how long it will continue to provide emergency stimulus to the U.S. economy.
The bank’s response in August will be one of the first tasks awaiting its new governor, Mark Carney, currently the head of the Bank of Canada.
The BoE’s inflation target would remain at 2 percent a year, but that was not enough on its own, Osborne said.
He said his new remit for the bank recognised the need for “unconventional monetary policy instruments,” such as the massive bond-buying programme it has already undertaken.
Osborne announced a cut in the first 2,000 pounds of the employer’s National Insurance bill for every company, the largest tax cut in the budget at a cost of 1.3 billion pounds in 2014-15.
He said the move would mean 450,000 small businesses, or one third of all employers, would pay no jobs tax.
Osborne said he would cut corporation tax by a further 1 percentage point to 20 percent from April 2015.
A levy on banks will rise to 0.142 percent to offset the effect of the corporate tax cut.
Osborne said restrictions on public sector pay increases will be extended for a further year, with a limit of 1 percent in 2015-16, though this will not apply to military personnel.
Osborne extended a loan scheme to help people buy newly-built homes, and committed 3.5 billion pounds of capital spending to support it. The scheme was previously restricted to first-time buyers.
The government will provide new guarantees to lenders to support up to 130 billion pounds of mortgages to help them provide financing to people unable to raise a large deposit to buy a home. The measure will be available from the start of 2014 and run for three years.
Osborne cancelled a rise in fuel duty planned for September, cut a penny off the price of a pint of beer and scrapped an annual above-inflation rise in beer duty.
Osborne abolished stamp duty on shares traded on growth markets like London Stock Exchange’s AIM market.
Osborne announced that from 2014-15 Britons will not pay any income tax on their first 10,000 pounds of earnings - a key manifesto goal of Osborne’s coalition partners, the Lib Dems.
The government will direct an extra 3 billion pounds a year from 2015-16 to infrastructure projects, raised from additional savings from government department budgets.
Osborne announced a shale gas field allowance to attract early investment to the country’s fledgling fracking industry.
The government announced agreements with the Isle of Man, Guernsey, and Jersey to bring in over a billion pounds of unpaid taxes over five years.
The government said it would help working families with childcare costs worth up to 1,200 pounds per child.
A new flat rate pension worth 144 pounds a week will be introduced in 2016, one year earlier than planned.
Reporting by Clare Hutchison, Shadia Nasralla and Tim Castle; Editing by Ruth Pitchford