2011 United Kingdom budget

The 2011 United Kingdom budget, officially called 2011 Budget – A strong and stable economy, growth and fairness, was delivered by George Osborne, the Chancellor of the Exchequer, to the House of Commons on 23 March 2011.

It was the second budget of the Cameron government formed in 2010, and the second to be delivered by Osborne.

Osborne quoted data and projections from the OBR relating to economic growth, inflation and borrowing. Key measures taken or introduced included increasing the personal tax allowance, cuts in corporation tax, a cut in fuel duty, and a new equity loan scheme designed to help first-time buyers in the property market.

Economy
Osborne announced that the Office for Budget Responsibility had cut its growth forecast for 2011 from 2.1% to 1.5%, and for 2012 from 2.6% to 2.3%.

In the June 2010 Budget and autumn spending review, he had already committed the Government to spending cuts to tackle the UK's deficit. He therefore made no further sweeping changes, but announced a Budget "about reforming the nation's economy, so that we have enduring growth and jobs in the future."

Forecasts for borrowing had fallen to £107 billion in 2011, £80 billion in 2012 and £12 billion by 2015–16. The national debt was estimated at 58% of current national income, rising to 65% in 2012 before starting to fall back to 63% by 2015.

Taxes
Osborne announced that, from April 2012, the personal tax allowance would be automatically increased each year in line with CPI inflation.

Additionally, Osborne announced a consultation on long-term plans to merge income tax and National Insurance in order to simplify the tax system.

Corporation tax would be cut by 2% in April 2011, as planned in the previous budget. Further reductions of 2% in each of the next three years would reduce it to 20%. The temporary tax rate relief for small businesses would be extended to October 2012.

Council tax was frozen or reduced in 2011 in every English council. Air passenger duty was also frozen for a year.

Osborne deferred until 2012 a rise in fuel duty that had been planned for April 2011, and cancelled the previous government's fuel duty escalator for the remainder of the parliament.

No changes were made to alcohol duty rates but a rise of 2% above the rate of inflation in excise duties for wine and beer did go ahead as planned. Tobacco duty rates were also raised by 2% above inflation.

Spending
Public spending measures included an extra 40,000 apprenticeships for young people out of work, 100,000 new work experience placements, and 12 new university technical colleges (UTCs), doubling the number to at least 24. Osborne also allocated £100 million of new money for science, financed by the bank levy, £80 million of which would be invested in new research centres in Daresbury, Norwich and Cambridge, and the remainder would be for projects in Harwell.

£100 million would be allocated to repairing potholes in England, following the severe winter, and £200 million to regional railways, including the construction of the Ordsall Chord in Manchester.

Britain's role in the military intervention in Libya would be financed entirely by the Treasury and Treasury reserve.

The Budget also provided £250 million to boost the home construction industry and to help first-time buyers with incomes of up to £60,000 to buy a new-build property. The scheme, available for one year, requires buyers to save a deposit of 5% of the purchase price, with the government and housebuilders each providing 10% through an equity loan, enabling the buyer to qualify for a 75% loan-to-value mortgage. The equity loan would be interest-free for the first five years.