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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

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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.

Click here or scroll down for live updates

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.

Should it be #grandpatax instead of #grannytax?
@ guywalters : It's a #grandpatax as well you know

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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

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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?

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

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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

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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

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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

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

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

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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.

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GQ has collected the best #Budget2012 jokes, #grannytax not included.
@ AndrewPageCFP : RT @janemerrick23: Key about #grannytax Osborne has spectacularly failed Daily Mail Test by punishing readership: middle class pensioners

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

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Has George Osborne hid a second #grannytax in his Budget?
@ 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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What would the Queen have thought about the #grannytax?
@ 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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Age UK have attacked the #grannytax
@ 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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@TomWatsonMP isn't thinking of #grannytax, but the latest in #hacking and Rebekah Brooks
@ 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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#grannytax was one of the few things not to be leaked in the #budget2012
@ SimonBatchelor1 : Anybody surprised the only bit of the #budget2012 not to leak was the #grannytax No thought not #bbcbudget

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Why did Osborne do the #grannytax in his #Budget?
@ 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 has made a #grannytax poster
@ johnprescott : My latest #giveitbackdave #grannytax poster - made here http://t.co/xHDefEFw http://t.co/uSWBa9ux

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

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As #grannytax rivals Justin Bieber on Twitter, what will George Osborne do?
@ 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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Will Osborne's team tackle the #grannytax furore?
@ 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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Will the LibDems do anything about the #grannytax?
@ PatJHennessy : Why didn't the LibDems raise a fuss about the #grannytax ?

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Isn't this why the #grannytax is controversial?
@ 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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Treasury source tells HuffPost on #grannytax...

"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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Westminster is abuzz with the news that the price of fags is set to go up.
@ 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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Labour's one-page Budget response

...is here on Twitpic (posted by Tim Montgomerie of ConHome)

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Gavin Shuker MP trials a potential attack line
@ 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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Is this Osborne's big mistake?
@ ShippersUnbound : Could the #grannytax be Osborne's 10p fiasco? Discuss...

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Ros Altmann, Chief Exec of SAGA, blasts pension changes

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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FOLLOW UK POLITICS

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...
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...
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Richard Exell: This Was Not a Robin Hood Budget - But the Sheriff of Nottingham Would Have Been Proud of it!

Most progressives will have been astounded that a Chancellor who told us in his statement that "I regard tax evasion and - indeed - aggressive tax avoidance - as morally repugnant", then went on to reward it with his most controversial policy.
Rachel Reeves

Rachel Reeves: George Osborne Should Use This Budget to Correct His Mistakes

Ed Miliband, Ed Balls and I have set two tests for George Osborne's budget today. First, will it get our economy moving - delivering the jobs and growth we need to get the deficit down? And second, will it be fair to families on low and middle incomes now bearing the heaviest burden of Osborne's spending cuts and tax rises?

 
 
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gordonsewell
42 Fans
08:13 PM on 03/22/2012
dont get too worried as when you reach the age of 80yrs the Government in their largesse gives you an extra 25pence yes thats right 25p, a week !!
I do wish they would keep mine and use it to pay off the deficit,its certainly no bloody use to me !!!
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gordonsewell
42 Fans
08:04 PM on 03/22/2012
Can I use this Forum to tell all those getting older you dont need to worry about poverty in old age as currently on reaching the age of 80 yrs the Government in their largesse gives you an extra 25pence YES thats right 25p a week

I do wish they would keep mine to help the present deficit as its not much bloody use to me !!!
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HUFFPOST SUPER USER
Blockem1
When will our politicians start putting policies
195 Fans
 
08:42 AM on 03/22/2012
This budget is a failure , yes some people will have a small amount extra in their hand but the majority of these that will benifit are at the lower end of the pay scale ,but when for pensioners and mr and mrs average after they have paid for the additional costs of living ,fuel,utilities,transport,etc they will be worse of which means less money in their hands ie no money to spend ,no growth in the economy and lower tax revenues or bigger borrowing requirements. As for the fantasy idea that the rich who have benefited will give up their tax avoidance schemes and pay more tax you can forget that. When you work through the numbers this budget is a disaster ,no jobs ,no growth,no increase in tax revenues which means more borrowing !
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Catherine Hester
54 Fans
12:07 AM on 03/22/2012
The TORY trash with cash STRIKE again, for they giveth???????? and they taketh and taketh? For it is certain that the POOR come into this world with nothing, and if these parasites on the skin of society have their way they will have nothing eternally?
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verycross
122 Fans
01:30 AM on 03/22/2012
so if individuals work long hours to provide for their loved ones , you think its ok to keep take from their backs to provide for those who cant be bothered to contribute ?
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HUFFPOST SUPER USER
elisabethclive
To the left of Left.
1265 Fans
08:26 AM on 03/22/2012
"those who cant be bothered to contribute"

--You mean the super rich? Those who hoard millions/billions in off shore accounts, tax havens? Whose wives and families spend all their time lunching, shopping and holidaying?

Or do you mean those desperately trying to find a job in this stagnant economy with the highest unemployment in decades? Caused by bailing out the banks and super rich, no less. Is that who you mean?
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Andy Archer
1 Fans
08:30 PM on 03/21/2012
With regard to child benefit. Let me get this right...... if two people in a household earn £49,999.00 each, i.e. £99,998.00 total income, they will qualify for Child benefit?
If one person in the household earns £50,000 - £60,000 & the other is a non earner they will not qualify for child benefit. Oh sorry it will be scaled down between £50k & £60k.
In summary, household income £99,998 - full child benefit. Household with £60,000 income - zero child benefit. Can anybody tell me if I have this right???????
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verycross
122 Fans
03:49 PM on 03/21/2012
I cannot belive what I am seeing when I read the politically leftwing/labour comments & responces to the budget , they really think money grows on trees and the UK voting public has the shortest memory in existence .
we are in this mess because of them being given the chance to govern . hippocracy in its clearest light.
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rchrdsn388
15 Fans
07:06 PM on 03/21/2012
If you earn over £150k your tree seems to be blooming , and we are in this mess because of bankers and it is world wide .What happened to Camerons " we are in this together " when he gives rich high cuts and increase tax for pensioners ??? Does not seem to be together to me
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verycross
122 Fans
08:12 PM on 03/21/2012
Makes sence to me , if the no. of people paying taxes is not covering the out goings for goverment obligations then we need to attract people with abillities to create wealth in order to redress the deficit . People who keep working hard to better their lot (which in turn improves the quallity of life for others) will not stick around to pay taxes in this country if they are having their efforts stripped from them more and more the harder they work .
In an interveiw last night this point was made to a high rank labour party member who as far as I could see, clearly could not return a reasoned answer . He being party to labour policy , would in my opinion , serve to anyone watching why we find ourselves in the current dire straights we presently are. I dont think they will allow me to give you the details due to advertising.regards
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lokiesteve
72 Fans
03:48 PM on 03/21/2012
The government's job is to stay in power for as long as it can, with rich people on your side who needs votes? I'm pretty sick of the general incompetence in this country.
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verycross
122 Fans
03:37 PM on 03/21/2012
PARTY POLITICAL WORKING CLASS BXXXXXS FROM LABOUR AGAIN .
THEY WASTE OUR RESERVES , FILLED THIS COUNTRY WITH CHEAP LABOUR , AND INCREASED TAXES ON THE WORKING CLASSES MORE THAN ANY CONSERVATIVE GOV. IN THEIR LAST ADMINISTRATION .
FOR THE WORKING CLASS ?
IN MY OPINION ,YOU ARE LIARS AND CHEATS .
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tetleys
73 Fans
02:37 PM on 03/21/2012
"A milionaires budget" says Miliband, well he will be very happy with that then as he is one of those said millionaires. What friggin chance do any of us working/middle class have when all our elected reps are so rich and out of touch they live in another dimension!!!
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taffy terrier
56 Fans
02:18 PM on 03/21/2012
Is it any wonder the police are being issued with rubber bullets and water canons I think it is time that people stood up and be counted and do what they can to oust this lot of millionaires and brought back someone who cares about the man in the street
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dirtyboy
35 Fans
01:45 PM on 03/21/2012
Here's a crumb, now give me two back. Same old same old.
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Kehlan Sutai Inigan
32 Fans
01:40 PM on 03/21/2012
Plenty in there to help rich people get richer... as for the rest of us, we are stuffed! sorry but if you are earning over £150,000 you can afford the higher tax rate (and if you can't, then any of us on a lower wage will happily give you a lesson in budgeting)
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panama digby
12 Fans
01:33 PM on 03/21/2012
Utter out-of-touch rich boys club.WHEN will people rebel?????
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dirtyboy
35 Fans
01:44 PM on 03/21/2012
WHEN................NEVER. Nobody has the bottle.
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panama digby
12 Fans
01:58 PM on 03/21/2012
Some do but we now live in a police state
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CentreforCities
199 Fans
 
12:49 PM on 03/21/2012
Although the OBR expects the UK to avoid a technical recession and has revised its forecast for growth up, we’re still recovering much more slowly than we did from the last recession in the early 1990s. Four years on from the start of the 1990s recession, unemployment had been steadily falling for more than a year. Four years on from the start of the most recent downturn and unemployment has returned to 2009 levels. This main difference between now and then is that the 1990s recovery was accompanied by much stronger economic growth and, as a consequence, private sector job creation.
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1959greenarrow
21 Fans
 
12:32 PM on 03/21/2012
public borowing for feb was over 500 million pounds a day. More proof that the coalition just havent got a clue what to do and are still wasting billions on immigration and foreign aid when the country is in such a dire mess This is more proof that the credit agencies threat to down grade us was the right one after seeing todays borrowing figures
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