Budget 2012 - 50p Tax Cut To 45p, Personal Tax Allowance Up By £1100

The Huffington Post UK  |  By Posted: 21/03/2012 07:26 Updated: 21/03/2012 14:33

2012 Budget Live Blog Osborne
Tax Cuts Are Expected In Osborne's Third Budget - But Those For The Rich Will Be Controversial

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.

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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.

You can read every story and blog we've published on the Budget on our Big Budget News page.

Below is our rolling coverage, where we'll update in real-time the speech as it happens, the reaction and the analysis.

@ guywalters : It's a #grandpatax as well you know

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@ joyless60 : #grannytax Dot Gibson gen sec of Nat pensioners convention 5m will be worse off. #bbcnewschannel Passionate advocate for pensioners

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@ eljmayes : The BBC's Norman Smith has just stated that his mum wouldn't be impressed by the supposed #GrannyTax- bias towards Labour?

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@ CallumJonesBlog : @BBCNormanS on Treasury's follow up to #grannytax: "my mum won't be happy with that argument"

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@ anthonypainter : The irony is that by leaking everything else, the Coalition has focused attention on the #grannytax ! Genius. #budget2012

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@ RicHolden : IoD: ‘This budget brings three items of good news for pensions’ http://t.co/gbouGq5y #Budget2012

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@ MirrorJames : Top Lib Dems distancing themselves from 50p - should try putting some yellow water between themselves and the #grannytax #Budget2012

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@ 1957AJB : Danny Alexander ashamed of #grannytax http://t.co/gjwtNPEQ And so he should be

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@ gordoh : Personal view: #grannytax fuss is overblown. Hits some but impact modest. Too many reactions verging on hyperbole. #budget2012

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@ faisalislam : Its not really a #grannytax though is it? The HMRC costing says 58% paid by male over-65s.

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@ AndrewPageCFP : RT @janemerrick23: Key about #grannytax Osborne has spectacularly failed Daily Mail Test by punishing readership: middle class pensioners

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@ AndrewPageCFP : RT @janemerrick23: Key about #grannytax Osborne has spectacularly failed Daily Mail Test by punishing readership: middle class pensioners

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@ Simon_Nixon : Stamp duty hike is in fact another disguised #grannytax since it will be ultimately be paid by home sellers in form of lower house prices.

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@ jamiesont : Osborne lucky the #grannytax didn't leak yesterday or The Queen would have shoved his smug face through that stained glass window.

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@ BBCNormanS : Age UK say pensioner with an income of 10500 pounds a year cd be 259 pounds a year worse off cos of #grannytax

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@ tom_watson : I'm distracted from #Budget2012 and #grannytax by news from a police station in Milton Keynes: http://t.co/P4uVL6x6

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@ SimonBatchelor1 : Anybody surprised the only bit of the #budget2012 not to leak was the #grannytax No thought not #bbcbudget

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@ martinnicholls : Osborne's #grannytax own-goal is surprising given the number of Tory voters it'll piss off. Unusually clumsy bit of politics #budget

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@ johnprescott : My latest #giveitbackdave #grannytax poster - made here http://t.co/xHDefEFw http://t.co/uSWBa9ux

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@ jamesrbuk : Am thinking @helenlewis is right. Someone should write a defence of the #grannytax in relation to intergenerational justice etc.

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@ RichardJMurphy : Gordon Brown had his 10p tax fiasco and his 75p pension rise. Osborn tries to do both with his #grannytax charge on all new pensioners

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@ martinnicholls : RT @edstaite: #grannytax is trending and not just with Lobby hacks. Osborne team need to hit back quick & hard #speedkills

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@ PatJHennessy : Why didn't the LibDems raise a fuss about the #grannytax ?

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@ chrisshipitv : 230,000 pensioners will be brought INTO paying income tax. 360,000 OAPs lose £285/year. Did Treasury not think controversial? #grannytax

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"It's about simplification, it was never going to be an easy decision but it had to be done at some point."

The source says the furore was expected and planned for, but they insist that simplifying the personal allowance is in the public interest.

But expected or not, 4.5 million pensioners are going to be affected and it's rapidly becoming the story of the day.

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@ FelicityParkes : I've just queued up with half a dozen people, all buying cigs like it was going out of fashion. Eat my smoke, Chancellor! #budget2012

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@ gavinshuker : George Osborne's #grannytax means 4.5m pensioners will lose out. £3bn squeezed from over 65s over the next four years.

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@ ShippersUnbound : Could the #grannytax be Osborne's 10p fiasco? Discuss...

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She tells HuffPost:

“This is an outrageous assault on decent middle-class pensioners.

“This Budget contains an enormous stealth tax for older people. Over the next five years, pensioners with an income of between £10,000 and £24,000 will be paying an extra £3 billion in tax while richer pensioners are left unaffected.

“There is nothing in this Budget for savers, there is nothing to improve the annuity market, nothing to appease the damage of quantitative easing and nothing to support ISA changes and shelter older people’s money in cash. This Budget is terrible news for pensioners.”

“It is good to hear that we will be able to harness the power of pension funds to improve UK Infrastructure but in short, this Budget is another shocking example of the Government’s attack on poorer and older people. It is dramatically unfair.”

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