'Britain deserves a pay rise': Osborne unveils a new National Living Wage of £7.20-an-hour as he promises 29million workers a tax cut
• George Osborne delivering the first Conservative-only Budget since 1996
• £37billion of savings needed to tackle the deficit and balance the books
• Includes £12billion from welfare and £17billion in departmental cuts
• £5billion raised from tax avoidance and permanent non-dom status axed
• 130,000 people taken out of paying the 40p tax rate from 2016/17
• Amount workers can earn before paying tax will rise to £11,000 next year
• £12billion cuts in benefits to be slowed but tax credits bear the brunt
By MATT CHORLEY, POLITICAL EDITOR and TOM MCTAGUE, DEPUTY POLITICAL EDITOR FOR MAILONLINE
PUBLISHED: 10:26, 8 July 2015 | UPDATED: 13:55, 8 July 2015
George Osborne today announced the shock creation of a new National Living Wage of £7.20-an-hour, declaring: 'Britain deserves a pay rise.'
The Chancellor vowed to make Britain a low-tax, high-wage economy as he promised to finish the job of fixing the economy.
The amount workers can earn before paying income tax will also rise to £11,000 from next year, while 130,000 people will be taken out of paying the 40p rate.
But he took aim at Britain's welfare state, warning people able to work should look for a job and take it when it is offered.
Working age benefits will be frozen for four years, after years of handouts rising faster than wages for those in work. Tax credits will only be offered for the first two children in families.
Mr Osborne dramatically ditched plans to balance the books by 2018-19, with Britain now not expected to be back in the black and running a surplus until a year later.
He said that the difficult process of tackling the deficit had to continue, warning: 'There can be no turning back.'
Another £37billion of savings need to be made, including £12billion from welfare and £5billion in a crackdown on tax avoidance.
But the rest will have to come from departmental spending cuts, including public sector workers offered pay rises of just 1 per cent for the next four years.
The Chancellor is using a speech in the Commons to announce sweeping tax cuts for the low paid and middle classes while taking the axe to Britain's benefits bill
Work and Pensions Secretary Iain Duncan Smith punched the air as Mr Osborne announced shock plans for a National Living Wage
Budget: House erupts as Osborne announces benefit reforms
Mr Osborne set out to take a tough stance on the difficult decisions which lie ahead, slashing benefits, axing student grants and warning public sector workers they will get pay rises of only 1 per cent for four years.
Families receiving tax credits will bear the brunt of efforts to raise £12billion from the welfare budget, while school leavers will lose benefits if they refuse to 'earn or learn'.
But in a highly political strike against critics who say benefits are topping up low wages, Mr Osborne announced a sharp increase in the minimum amount companies can pay their staff.
Work and Pensions Secretary Iain Duncan Smith was seen punching the air as the plans were announced.
Unveiling plans for the National Living Wage, Mr Osborne said: 'Britain deserves a pay rise and Britain is getting a pay rise.
'I am today introducing a new National Living Wage. We’ve set it to reach £9 an hour by 2020.
'The new National Living Wage will be compulsory. Working people aged 25 and over will receive it. It will start next April, at the rate of £7.20.'
But against the backdrop of the deepening euro crisis in Greece, Mr Osborne warned of the perils of a 'country not in control of its borrowing'.
He made clear that years of austerity still lie ahead in his plan to get Britain back in the black.
Key announcements included:
• Britain will achieve a Budget surplus of £10billion in 2019-20, a year later than planned
• £37billion of savings needed, including £12billion to be cut from the welfare budget
• £17billion to come from spending cuts, including 1 per cent pay rises in the public sector for the next four years
• An extra £8billion for the National Health Service to ensure a 'strong seven day a week NHS'
• Temporary non-dom tax status will abolished, raising £1.5billion because 'British people should pay British taxes in Britain'
• The bank levy will be reduced over the Parliament before introducing an 8 per cent surcharge on bank profits
• New Vehicle Excise Duty bands introduced for new cars costing £140-a-year to generate cash for a Roads Fund to repair the highways
• Fuel duty will remain frozen this year, after being held flat since 2010, in a boost for motorists
• An apprenticeship levy will be introduced on all firms, who can get the money back if they hire apprenticeships
• Maintenance grants for poor students to be axed and replaced with loans from 2016-17
• Inheritance tax scrapped for families to leave loved ones up to £1million
• Corporation tax to be cut to 18 per cent by 2010 to show 'Britain is open for business'
• Working age benefits frozen for four years and new claimants of the Employment Support Allowance will be offered the same amount as those on Jobseeker's Allowance
• High earners banned from getting rent discounts to live in council and social housing
• Rents in social housing to be cut by 1 per cent every year for the next four years
• Tax credits limited to the first two children while better-off families will lose payments
Mr Osborne vowed to make Britain a low-tax, high-wage economy as he promised to finish the job of fixing the economy.
To cheers from Tory MPs, Mr Osborne said: 'This is a Budget that puts security first. It's a Budget that recognises the hard work and sacrifice of the British people and says we will not put that at risk.
'A Budget that sets out a plan for Britain for the next five years to keep moving us from a low-wage, high-tax, high-welfare economy; to the higher-wage, lower-tax, lower-welfare country we intend to create.
'This is a new settlement. This is a One Nation Budget from a One Nation government.
'This is a Conservative Budget that can only be delivered because the country trusted us to finish the job.
'If a country is not in control of its borrowing, the borrowing takes control of the country. This is a big Budget for a country with big ambitions.'
On welfare, Mr Osborne promised support for the elderly, disabled and vulnerable.
But he said the working age benefits system 'had to be put on a more sustainable footing'.
‘Those who can work will be expected to look for work and take it when it is offered,' he said.
The under-21s will be expected to stay in education or get a job under new 'earn or learn' rules. ‘It is not acceptable that some young people leave school straight into a life on benefits.
‘Young people in the benefits system should face the same choices as other young people who do work but cannot afford to leave home.’
Mr Osborne dramatically ditched plans to balance the books by 2018-19, with Britain now not expected to be back in the black and running a surplus until a year later
Mr Osborne added: ‘The benefit system should not support lifestyles and rents not available to those outside system.
He confirmed plans to reduce the benefits cap to £23,000 in London and £20,000 in the rest of the country.
In a familiar theme echoing his earlier Budgets, Mr Osborne promised more help for people wanting to buy their own homes and pass them on to loved ones when they die.
He announced plans to curb tax breaks for buy-to-let landlords, promising: ‘We will create a more level playing field between those buying a home to let and those buying a home to live in.
‘We will act, but we will act in a proportionate, gradual way.’
He will restrict tax relief to the basic rate of income tax from 2017.
He also confirmed Conservative plans to increase the amount families can leave loved ones without paying inheritance tax to £1million.
‘The left will never understand this but it is the most basic human and natural aspiration there is, he said.
George Osborne today posed on the steps of Number 11 with the famous red Budget Box before making his way to the Commons
SUMMER BUDGET: KEY POINTS
Major announcements in George Osborne's Summer Budget will include:
• Child tax credits limited to the first two children in any family
• Billions in cuts to housing and sickness benefits
• Amount families can claim in benefits to be cut from £26,000 to to £23,000 in London and the South East, and £20,000 a year in the rest of the country
• BBC to fund £650million bill for free TV licences for the over-75s
• Amount workers can earn before paying income tax to rise to £12,500 before 2020
• 40p tax rate to rise to £50,000 in boost for middle class workers
• Top rate of tax for those on £150,000 will not be cut from 45p
• Inheritance tax allowance to rise to £1million for family homes, paid for by a tax raid on the pensions of the rich
• A major clampdown on tax avoidance, including tougher measures targeting wealthy 'non-doms' living in Britain
• Student grants for poor young people to be axed and replaced with loans
• Shops to be able to open for longer on Sundays to boost trade
• £30million to speed up adoption of children in council care
• £10,000 annual payment to holders of the George and Victoria Cross
At the last Budget, Mr Osborne said, it was thought the economy had grown 2.6 per cent in 2014. However it grew 3 per cent.
For the second year in a row Britain is expected to have the fastest growth of any major advanced economy in the world.
He revealed the Office for Budget Responsibility forecasts growth of 2.4 per cent this year, 2.3 per cent next year and 2.4 per cent 2017-18, higher than previously thought.
Mr Osborne said: 'Over 2 million more people have the security of work thanks to this government's long term economic plan.
'Our ambition is to create 2 million more jobs on the road to full employment. Britain is getting its house in order.
'The budget deficit is now less half the 10 per cent we inherited. Running a surplus to get our dangerously high debt down.'
This year the deficit will be 3.7 per cent of national income this year, falling to 0.3 per cent in 2018-19, when the government will be in surplus.
Mr Osborne said: 'Britain has turned a corner and left the age of irresponsibility behind. Having come this far there can be no turning back.
'In normal economic times governments should run an overall economic surplus. In short we should always fix the roof while the sun is shining.'
He pledged an extra £10billion for the NHS, insisting: 'You can only have a strong seven day a week NHS with a strong economy. It's proof that a strong NHS is only truly safe with a Conservative government.'
In a tweet posted online this morning, Mr Osborne said: 'Today I will present a Conservative Budget - a Budget that puts economic security first.'
Freed from the shackles of coalition with the Lib Dems, Mr Osborne is use his Commons statement to set out the first all-Tory Budget since 1996.
Mr Osborne said abolishing non-dom status altogether would 'probably cost the country money', but his plans would bring in an extra £1.5 billion in revenue.
'Many of these people make a considerable contribution to our public life and to tax revenues,' he said. 'But there are some fundamental unfairnesses ... It is not fair that people who are born in the UK to parents who are domiciled here, can later in life claim to be non-doms and live here.
'It is not fair that non-doms with residential property here in the UK can put it in an offshore company and avoid inheritance tax.
'From now on they will pay the same tax as everyone else.
'And most fundamentally, it is not fair that people live in this country for very long periods of their lives, benefit from our public services, and yet operate under different tax rules from everyone else.'
After a consultation, from April 2017 'anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains'.
The Conservatives are committed to cutting £12billion from the welfare budget, with tax credits and housing benefit suffering the biggest cuts.
However, the Treasury has raked in more than expected in taxes in the last year creating 'wiggle room' for Mr Osborne to implement the benefit cuts over the next three years instead of two.
Analysts have suggested the Treasury could receive an additional £700 million this year - twice official expectations - thanks to new pension freedoms.
Budget: Osborne to abolish nom-dom tax status by 2017
Freed from the shackles of coalition with the Lib Dems, Mr Osborne will is able to set out the first all-Tory Budget since 1996
Millions of over-55s have since April been able to cash in their pension pots rather than being forced to buy an annuity.
Mr Osborne tells MPs: 'Our long-term economic plan is working. But the greatest mistake this country could make would be to think all our problems are solved.
We should always fix the roof while the sun is shining.
'You only have to look at the crisis unfolding in Greece as I speak to realise that if a country's not in control of its borrowing, the borrowing takes control of the country.'
He briefed colleagues on his seventh Budget as Chancellor in a 75-minute Cabinet meeting at 10 Downing Street which ended with ministers banging the table in approval.
David Cameron's official spokeswoman said: 'This is a Budget that will put our country firmly on the path from a high tax, high welfare society to a lower tax, lower welfare society.
'It will provide a strong and solid foundation to secure a better future for people across the UK in the years ahead.'
The Chancellor will promise to be 'bold in transforming education, bold in reforming welfare, bold in delivering infrastructure, bold in building the Northern Powerhouse, bold in backing the aspirations of working people … it is a Budget that sets the way to secure Britain's future.
Mr Osborne left Number 11 followed by his Treasury team (from left) Commercial Secretary to the Treasury Lord OíNeill of Gatley, Exchequer Secretary to the Treasury Damien Hinds, Financial Secretary to the Treasury David Gauke, City Minister Harriett Baldwin and Chief Secretary to the Secretary Greg Hands
The Chancellor is promising to be 'bold in transforming education, bold in reforming welfare, bold in delivering infrastructure, bold in building the Northern Powerhouse, bold in backing the aspirations of working people … it is a Budget that sets the way to secure Britain's future'
David Cameron and Home Secretary Theresa May were in Downing Street this morning to be briefed on the contents of the Budget
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Child tax credits are to be limited to the first two offspring, saving the Treasury about £1.4billion a year, and housing benefit will be abolished for young adults.
The amount families can claim in benefits will be reduced from £26,000 to £23,000 in London and the South East, and £20,000 for the rest of the country.
High earners living in council houses and social housing will lose the right to cut price rents, raising £250million-a-year.
Around 340,000 people on more than £40,000 in London and £30,000 outside the capital will be charged full market rates to stay in their homes.
The BBC will be forced to take on responsibility for funding free TV licences for the over-75s, at a cost of around £650million-a-year.
David Cameron has made clear that he wants to end the 'merry-go-round' of the welfare system, where the low paid are taxed on their wages and then given some of their money back in benefits.
On tax, the government is to accelerate the plan to increase the amount workers can earn before paying income tax.
The Tories have promised to increase the personal allowance to £12,500 by 2020, while also raising the threshold for paying the 40p will rise to £50,000.
But Mr Osborne has ruled out reducing the top rate of tax for those earning more than £150,000 from 45p to 40p.
London Mayor Boris Johnson this week warned Britain's richest bosses should not get a tax cut until they pay their workers properly.
He said the idea of cutting the top rate of tax cannot be supported until business leaders pay their staff a living wage which means they do not have to rely on welfare to top up their income.
Ministers leaving Cabinet include (left to right) Work and Pensions Secretary Iain Duncan Smith, Business Secretary Sajid Javid and Defence Secretary Michael Fallon
FIRST TORY BUDGET FOR 19 YEARS
Ken Clarke was the last Chancellor to deliver a Conservative Budget in 1996
George Osborne has been Chancellor of the Exchequer for the last five years but has never been able to deliver a Conservative Budget - until now.
After the Tories won a surprise overall majority in May's election, Mr Osborne is now able to implement his policies in full without having to compromise with the Lib Dems in coalition.
It is the first time a Conservative Budget has been announced since Ken Clarke delivered his final statement in November 1996, six months before Tony Blair's New Labour landslide.
A study by Citizens UK this year showed that there were 5.2million low paid workers in supermarkets and shops the UK, receiving £11billion in state support through tax credits.
It is argued that if their firms paid them the Living Wage instead of the minimum wage it would save the taxpayer £6.7billion in benefits.
CitizensUK suggested that workers at five of the country's biggest retailers – Tesco, Asda, Sainsbury's, Morrison's and Next – receive £1billion-a-year in taxpayer-funded subsidies topping up their low wages.
Some businesses have already adopted the Living Wage of £7.85 an hour (£9.15 in London), rather than the adult national minimum wage of £6.50.
Acting Labour leader Harriet Harman said: 'When people are working hard they should be able to feel better off for it. What we are looking for in this Budget are measures that will strengthen our economy but not at the expense of people being made worse off.
'The deficit needs to be paid down, but there are better ways of doing it than hitting people that are working hard.
'The Government made promises during the election campaign that we, and the people who voted for them, will be looking to see them deliver on.
'We need the much promised investment in infrastructure to support our fragile economy; that means roads, rail and airports.
'We need skilled workforces equipped for the modern economy. And we need businesses of all sizes to get the help they need to grow and boost their productivity.'
In May this year the UK's national debt passed £1.5trillion for the first time, a major increase in a decade
Budget cuts across Whitehall will see public spending as a share of national income (GDP) continue to fall
REVEALED: GEORGE'S SECRET TWITTER WAR WITH THE LIB DEMS
Just four months ago, George Osborne and his Lib Dem number two Danny Alexander stood together in Downing Street ahead of their last Coalition budget.
But the relationship between the Chancellor and his former allies appears to have dramatically soured after it emerged he had officially 'blocked' the Lib Dems on his official Twitter account.
Mr Osborne's decision, which means the Lib Dems cannot view any of his Twitter messages, was ridiculed this morning.
One party source said: 'You would've thought he had much greater things to worry about on Budget day than the Lib Dem press office.
'He must have seen something from us he didn't like and decided to block us. It's rather daft. It gives you a bit of an insight into his state of mind.'
The SNP's Stewart Hosie said: 'The Chancellor has set himself the task of tackling the UK's productivity weakness in his first true blue Tory Budget.
'George Osborne must increase the minimum wage now - not wait until some date way in the future - and the UK government needs to get behind the Living Wage, as the Scottish Government has, to help secure family incomes.
'If he won't, then he should give the Scottish parliament the powers to do it - give Holyrood the levers to help the economy grow and deliver fairness, instead of consigning people to more years of austerity and cuts.
'George Osborne – not content with cutting public sector budgets – is now dipping into people's pay packets and taking money out.'
Green party leader Natalie Bennett said: 'With this Budget, George Osborne has another opportunity to learn the lessons that led to the economic crisis, build a fair and sustainable economy and tackle climate change.
'He is likely to cut back public services and welfare even further, in spite of the damage this has already inflicted to the young people who can't find work and the families who rely on food banks to survive. He will allow wealthy families to retain £1 million fortunes tax-free, further entrenching inequality. And he will relish in the withdrawal of subsidies for wind power, the cheapest form of renewable energy.
'In the sixth wealthiest nation on earth, we can afford a Budget that delivers a caring Britain. Osborne just has to take this opportunity to make it happen.'
Benefit cap on what families can claim to be cut to £23,000 in London and £20,000 for the rest of the country
The amount families can receive in benefits in a year will be cut to a maximum of £23,000 a year in London and £20,000 everywhere else in the country.
The introduction of the annual limit on benefit claims was one of the most popular reforms introduced by the coalition government which argued workless families should not be able to receive more than the average salary of someone in a job.
George Osborne argues the measure would help make the benefits system fair 'for those who pay for it' and encourage people off the dole and into work.
The amount workless families can claim in benefits will be cut to £23,000 in London and the South East, and £20,000 for the rest of the country, well below the average annual salary of workers in every part of the UK
The move to a regional system goes further than the Conservative manifesto which only promised to lower the cap – currently set at £26,000 a year - by £3,000 across the UK.
Across the country, the government believes it will cost 90,000 households around £60 a week.
It will exempt those on disability benefits such as disability living allowance, personal independence payment and employment and support allowance.
Mr Osborne had previously indicated that the £12 billion of welfare cuts would be implemented in full by 2017-18 - the year when he has said the Government books will return to the black.
However, he is thought to have significant 'wiggle room' to move that date back because tax revenues are around £15 billion higher than projected at the March budget.
Analysts have suggested the Treasury could receive an additional £700 million this year - twice official expectations - thanks to new pension freedoms.
Millions of over-55-year-olds have since April been able to cash in their pension pots rather than being forced to buy an annuity.
High earners to lose the right to cheap council house rents
Subsidised rents for middle class families in council houses were targeted by George Osborne today, in a move saving taxpayers £250million a year.
Some 340,000 people earning over £30,000 a year will lose their right to enjoy cheap rents in housing association or local authority properties.
The subsidised-rent benefit - worth an average of £3,500 per household - will be cut for those earning more than £40,000 a year in London and £30,000 in the rest of England.
A cleaner polishes the door of Number 11 Downing Street, as Mr Osborne put the finishing touches to his Commons speech.
From 2017 onwards, they will be forced to pay a market rent to housing associations and local authorities.
The move will hit nearly one in ten of all social tenants in England, including more than 40,000 who enjoy subsidised rents despite receiving a household income in excess of £50,000 a year.
Under current rules, tenants are protected from paying market rents up to a household income level of £60,000.
Treasury sources said that the money raised from the reform would be 'put towards reducing the deficit and generate extra income for housing associations to reinvest in affordable housing'.
The subsidised-rent benefit – known in Tory circles as the 'Dobbo perk', after it was revealed that former Labour Health Secretary Frank Dobson was still living in his council house while drawing a six-figure salary in Tony Blair's Cabinet.
Mr Osborne said 9 per cent of all social tenants in England are now on higher incomes while enjoying the benefit of an average £3,500-a-year per household in reduced rent.
They include more than 40,000 with annual household incomes in excess of £50,000 and a further 300,000 with incomes over £30,000.
£10,000 thank-you for heroes given George and Victoria Crosses
Britain's most remarkable heroes are to be handed a £10,000-a-year 'thank you' from the nation, George Osborne announced.
Thirty holders of the Victoria Cross and George Cross already qualify for a £2,129-a-year annual stipend from the state in recognition of their bravery.
The Chancellor has now ruled that this should be increased to £10,000.
Mr Osborne yesterday met Victoria Cross and George Cross winners during a reception at 11 Downing Street.
The £3 million cost of the tax-free payment will be funded by fines levied on the banks for misconduct.
Mr Osborne, who met holders of the two medals in Downing Street yesterday, said: 'These inspirational people have gone above and beyond for this country and it is only right that we do all we can to support them.
'That's why I am so pleased to commit an extra £3 million to the holders of the Victoria Cross and the George Cross in the Budget. It is quite right that we use the bank fines from those who demonstrated the worst of values to support those who have shown the best of British values.'
The Victoria Cross is the highest military award for bravery. It is often awarded posthumously, and there are only 10 living holders.
The George Cross is the civilian equivalent for gallantry. Awards are rare and there are only 20 living recipients.
Yesterday's guests at Downing Street included Johnson Beharry, who was awarded the VC for 'supreme courage' in Iraq, when he twice rescued fellow soldiers under intense fire, and Bill Speakman, who was awarded the VC after leading repeated grenade charges against the enemy despite being wounded.
Shops to open for longer on Sundays to boost trade
Sunday trading restrictions could be axed under plans to announced in the Budget.
The Chancellor wants to hand power to councils and elected mayors to scrap some or all of the rules governing the opening hours of larger stores on Sundays.
The move has been welcomed by many supermarkets, garden centres and other large retailers, who have warned for years that the restrictions from 1994 are out of date and unfair.
The government will hand power to councils and elected mayors to scrap some or all of the rules governing the opening hours of larger supermarkets on Sundays.
But it has put the Chancellor on a collision course with church groups and trade unions who want Sunday to be treated as a special day.
At the moment, large stores can only open for six hours between 10am and 6pm on Sundays, while shops with a floor area of less than 3,000 square feet can open all day.
Mr Osborne said that changes in shopping patterns meant it was time to look at the restrictions again.
The Chancellor said this would let towns and cities 'determine their own futures'. The Treasury is expected to consult on whether to devolve power over Sunday trading laws to elected mayors, or whether all local authorities should be included.
Asda boss Andy Clarke said in February that the existing laws were 'fundamentally wrong' because those who wanted to shop at other times had to pay more for their food.
TUC general secretary Frances O'Grady said lifting the restrictions on Sunday opening would 'take precious family time away from shop workers'.
She said: 'There is no pressure for this from shoppers and it may push some smaller retailers out of business.
'It's a sign of desperation that the Chancellor is trying to strengthen growth through shopping instead of manufacturing. We need a better economic plan than asking people to spend another day of the week putting debt on their credit cards.'
£30million to speed up adoption of children in council care
Funding will be provided to help thousands of children in local authority care to be adopted by new parents.
Ministers argue it is a 'tragedy' that so many children ready for adoption were forced to wait months or years to join a loving home.
The Budget provides £30million to councils to 'tear down the barriers' and accelerate the process for some 3,000 children waiting to be adopted.
George Osborne argues it is a 'tragedy' that so many children ready for adoption were forced to wait months or years to join a loving home
More than half of these children have been in care for at least 18 months while a new family is found, despite a national surplus of potential adoptive parents.
The money will used to waive the fees which local authorities must pay to adoption agencies for finding, assessing and matching an adoptive parent and child outside their catchment area.
A £27,000 fee is paid for an adoptive parent found from outside a local authority's border, either by another local authority or by one of 30 voluntary sector adoption agencies.
Ministers believe these steep costs prevent councils from looking far and wide for potential parents for children in their care, particularly those that are least likely to find a new home.
Since 2010, the number of children adopted has increased from 3,200 to 5,050 by last year. The average time it took to place a child with adoptive parents fell from an average of 656 days in 2012/13 to 533 days in 2013/14.
Ever-rising green taxes to be scrapped to curb energy bills
Environmental taxes subsidise wind farms and other green energy sources by increasing household bills.
A review of green taxes and subsidies will be launched in a bid to clamp down on runaway energy bills.
Environmental taxes subsidise wind farms and other green energy sources by increasing household bills.
Under the Coalition the government had a target to increase the proportion of tax raised from environmental levies — a commitment that also featured in the Conservative manifesto five years ago.
But ministers are concerned that the bill to subsidise low-carbon energy, which is added to business and household electricity bills, has spiralled out of control.
The Department for Energy and Climate Change budgeted for £7.6billion to subsidise wind farms, nuclear plants and solar power by 2020.
But on current trends it could reach £9billion – or £170 on an annual household bill.
But the Chancellor has signalled a major change in direction – setting out plans to reduce in the longer term the amount families and businesses are expected to funnel into renewable energy schemes through their energy bills.
The review of green taxes and subsidies underlines David Cameron's shift away from longer-term environmental goals during his time in office.
In 2010 the PM promised 'vote blue, go green' but has since watered down his green commitments.
Inheritance tax threshold to rise to £1million for family homes
Families will not have to pay inheritance tax on homes worth up to £1million, under long-promised Conservative reforms.
Honouring a pledge announced eight years ago, George Osborne is to raise the theshold for couples to £1million.
All but the richest will now be able to pass on their homes to their children without a huge tax bill.
The Chancellor will also unveil provisions that mean people who downsize will not lose out.
The change, which is expected to come into effect in 2017, will ensure that 94 per cent of families will pay no inheritance tax at all.
Inheritance tax is currently levied at 40 per cent on assets above £325,000 for a single person or £650,000 for a married couple.
Mr Osborne will increase that threshold to £500,000 for singletons and £1million for married couples.
The increased amount however will apply only to the value of the main home, and not to other sources of wealth.
Polls have found that death duties are the most unpopular of all taxes – even among Labour voters.
Because the threshold has stood still as property prices have risen it is affecting record numbers of families.
In March's budget, Mr Osborne unveiled forecasts showing the number of estates hit was on course to almost double from 35,000 in 2014/15 to 64,000 to 2019/20.
Student grants for the poor to be axed and replaced with loans
Student grants will be axed and replaced with loans, under plans being announced in today's Budget.
Sajid Javid, the Business Secretary, has been working on plans for the grants – worth up to £3,387 per year this September – to be paid back after a student graduates.
Maintenance grants, which are means-tested, cover a students' rent and living costs at university and are intended to help those from poorer backgrounds.
Student grants will be axed and replaced with loans, which students will pay back once they have graduated
But they already cost £1.6billion a year of the Business department's £13billion budget. Officials are concerned that the grant budget could double over the course of the Parliament.
The proposal will go down badly with student groups, who say that with fees having tripled to £9,000 a year, the prospect of getting into further debt will put off students from low-income families.
Grants are available for students with a family income of up to £42,620 a year. One option is keep them only for students with a family income of under £25,000 who are eligible for the maximum grant.
Whitehall officials proposed converting grants to loans two years ago, but the plans were abandoned due to opposition from the Liberal Democrats, who were concerned about further damage to their reputation with students after Nick Clegg's u-turn on tuition fees.
But as unprotected departments are faced with making budget cuts of around 15 per cent over the next three years to meet the Conservatives' targets to cut the deficit, the move will help Mr Javid reach his goal of cutting £2.2billion.
BBC to pay £650million for free TV licences for the over-75s
The BBC has agreed to cover the cost of providing free TV licences for 4.5million over-75s - saving the government £650million a year from 2020.
In return legislation will be brought forward in the next year to 'modernise the licence fee' - allowing BBC bosses to begin charging for the iPlayer.
The annual charge - currently set at £145.50 a year - will also rise by around £10 by 2020 helping the BBC recoup around £250million.
Legislation will be brought forward in the next year to 'modernise the licence fee' - allowing BBC bosses to begin charging for the iPlayer
A deal has also been struck to let the BBC decide whether or not to continue funding the free licence perk after the next election.
Culture Secretary John Whittingdale said the Government was pleased the broadcaster had agreed to 'play its part in contributing to reductions in spending like much of the rest of the public sector' while further reducing its 'reliance on taxpayers'.
George Osborne said the BBC needed to make savings like every other publicly-funded body.
He said: 'The deal we have agreed with the Corporation means that it will take on the significant cost of TV licences for the over-75s, easing some of the pressure on taxpayers who have to meet the country's welfare bill, while also ensuring that our promise to maintain pensioner benefits is met in full over the next five years.'
BBC Director-General Tony Hall, said it was the 'right deal for the BBC in difficult economic circumstances for the country'.
The BBC could recoup a lot of the money from the rising number of households each paying the licence fee.
The £650million bill is more than 10 times the cost of Radio 1 (£52million) and Radio 2 (£60million), while hit shows like The Voice cost £55million over five years.
Big name stars are also expensive. Chris Evans has reportedly been handed a £3million deal to host Top Gear for three years alongside presenting the Radio 2 breakfast show, while Graham Norton and Gary Lineker are both said to earn more than £2million.
Can George Osborne can write like an injket printer?
As Chancellor of the Exchequer, writing the Budget speech is one of the biggest parts of George Osborne's job.
But he was mocked online this morning after posting a picture online which appeared to show him writing in a perfect Times New Roman font.
Mr Osborne tweeted the picture of his Budget speech, but social media users were quick to point out that the sheet of paper in front of him had been typed and not handwritten.
George Osborne was mocked online this morning after posting a picture online which appeared to show him writing in a perfect Times New Roman font
In a tweet posted online this morning, Mr Osborne said: 'Today I will present a Conservative Budget - a Budget that puts economic security first.'
The picture was taken at his desk in Number 11 Downing Street, with his official red leather folder to his left and the red Budget book to his right.
While Mr Osborne hoped to communicated the message behind his Budget measures, some on Twitter were more interested in what he was doing with his pen.
Andrew Wilson asked: 'Why is Osborne holding a pen in this photo? Is that supposed to be his handwriting? Or is he colouring in the O's?'
Benjamin Partridge wrote: 'George Osborne can write Times New Roman with a pen!'
Dave W added: 'That awkward moment when you're George Osborne and your pen is an inkjet printer.'
Read more: http://www.dailymail.co.uk/news/article-3153214/George-Osborne-uses-summer-Budget-announce-tax-cuts-welfare-cuts.html#ixzz3fIyKgI00
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