Osborne To Build For Britain In His Budget

By Anushka Asthana and Darren McCaffrey, Sky Political Team

George Osborne has announced that a "garden city" will be built in Britain for the first time in decades, based in Ebbsfleet, Kent, with 15,000 homes to start with.

Speaking ahead of Wednesday's Budget, the Chancellor also pledged to extend the first phase of the help-to-buy scheme for new build homes until 2020.

The Government has chosen Ebbsfleet in Kent as a new garden city

Policies to drive up housing supply will be one plank of the financial statement, which Mr Osborne will use to warn that the tough times are not over.

He is expected to announce measures aimed at small business, families, and investors, including:

:: An increase in the tax-free element of the personal allowance to £10,500

:: A freeze in the carbon tax

:: Action to support British companies that export their goods

:: Tax relief for business investments of up to £250,000

:: An additional crackdown on tax avoidance

:: Investment in road and rail, including speeding up the HS2 project

:: A tax cut on bingo halls

Mr Osborne will also take the opportunity to talk once again about policies coming into place in April. These include a transferable tax allowance for married couples of up to £200 a year, a drop in corporation tax to 21% and the chance for UK employers to cut their national insurance payments by £2,000 a year.

Details of a planned £1,200 childcare tax break will be unveiled

The decision to freeze fuel duty this September, which was made last year, will also be re-confirmed.

And there could be support for families with childcare as the details of an expected £1,200 per-child tax-break scheme are published following a Government consultation.

But the Chancellor is unlikely to give in to pressure from Conservative grandees on the 40p tax rate. Former Chancellors Lord Lamont and Lord Lawson have argued that the 4.4 million people now falling into the band, which kicks in at £41,450, is too high.

Although the threshold will rise by 1% this year, it is less than inflation.

Tory backbenchers and some business groups are also pushing for the rate to be used to deliver a middle class tax cut.

But Mr Osborne has argued that the tax allowance changes will benefit the middle classes.

Moreover, it has been reported that he is happy for more people to face the higher tax rate.

According to the Mail on Sunday, he told MPs: "It means they feel they are a success and joining the aspirational classes. That means they are more likely to think like Conservatives and vote Conservatives." He said the polling backed his arguments.

The newspaper quoted an MP saying the comment was met with a "stunned silence".

Ed Balls says Mr Osborne's housing measures 'fall short'

A Treasury source said the over-all tone of the Budget would be cautious with warnings of further austerity ahead. Mr Osborne will argue that his macroeconomic policies are working but there must be no wavering from the plan.

The next step is building a "resilient economy".

"Britain has to up its ambition, Britain has to up its game, Britain has to earn its way in the world," he told BBC1's Andrew Marr Show.

"Yes, the economy is recovering but that is not enough. We have got to finish the job."

Shadow chancellor Ed Balls told Sky News that the measures on housing fell short.

"We've asked him to invest in affordable housing, there's nothing on the table yet from him there," he said.

"At the moment we're calling on him to reduce the limit on help to buy from 600,000 - we've not had any action on that yet.

"And this is a promise to get a new town moving eventually, but it's not on the scale we need, or as fast as we need to deal with that cost of living crisis.

"I hope that when it comes to the budget on Wednesday, George Osborne's going to be giving a lot more than he's promised so far."

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