George Osborne has delivered his 2012 Budget to the Commons, and as expected the 50p top rate of tax is being cut to 45p, a measure which will come into effect a year from now.
"We are earning our way out of trouble," the Chancellor said at the conclusion to his speech, insisting that the top rate of tax - introduced by the last government - had only encouraged tax avoidance and raised less than a third of the amount previously expected.
The chancellor also performed a major U-turn on cuts to child benefits for middle-incomes.
Rather than taking benefits away from any household with someone earning just over £40,000, the rate at which benefits begin to be cut is raised to £50,000 - and it won't be an automatic cut, rather it will escalate depending on earnings, with the entire benefit only being taken away from someone earning £60,000.
FULL BUDGET COVERAGE
Ed Miliband described it as "the millionaires' Budget of 2012", saying the government had the wrong priorities by cutting taxes for the rich.
This Budget was possibly the most leaked in history, and amazingly no-one at Westminster seems at all surprised by this.
Below is our rolling coverage, where we'll update in real-time the speech as it happens, the reaction and the analysis.
21/03/2012 17:37 GMT
Should it be #grandpatax instead of #grannytax?
@ guywalters :
It's a #grandpatax as well you know
21/03/2012 17:31 GMT
5m set to lose out over #grannytax
@ joyless60 :
#grannytax Dot Gibson gen sec of Nat pensioners convention 5m will be worse off. #bbcnewschannel
Passionate advocate for pensioners
21/03/2012 17:27 GMT
Were @BBCNormanS's comments on the #grannytax a sign of BBC impartiality?
@ eljmayes :
The BBC's Norman Smith has just stated that his mum wouldn't be impressed by the supposed #GrannyTax- bias towards Labour?
21/03/2012 17:24 GMT
@BBCNormanS gets personal on the #grannytax
@ CallumJonesBlog :
@BBCNormanS on Treasury's follow up to #grannytax: "my mum won't be happy with that argument"
21/03/2012 17:22 GMT
If Osborne hadn't leaked - would #grannytax be so talked about?
@ anthonypainter :
The irony is that by leaking everything else, the Coalition has focused attention on the #grannytax ! Genius. #budget2012
21/03/2012 17:19 GMT
CCHQ bring in help for defence over #grannytax
@ RicHolden :
IoD: ‘This budget brings three items of good news for pensions’ http://t.co/gbouGq5y #Budget2012
21/03/2012 17:09 GMT
Should the LibDems put "yellow water" between themselves and the Tories on #grannytax?
@ MirrorJames :
Top Lib Dems distancing themselves from 50p - should try putting some yellow water between themselves and the #grannytax #Budget2012
21/03/2012 17:03 GMT
Is Danny Alexander ashamed of the #grannytax?
@ 1957AJB :
Danny Alexander ashamed of #grannytax http://t.co/gjwtNPEQ And so he should be
21/03/2012 17:02 GMT
Is the #grannytax fuss overblown?
@ gordoh :
Personal view: #grannytax fuss is overblown. Hits some but impact modest. Too many reactions verging on hyperbole. #budget2012
21/03/2012 16:59 GMT
Is the #grannytax actually what it says?
@ faisalislam :
Its not really a #grannytax though is it? The HMRC costing says 58% paid by male over-65s.