UK Budget Live: Chancellor Osborne raises bank levy, cuts tax for North Sea oil

Live updates, comment and reaction throughout the day as Chancellor of the Exchequer George Osborne delivers his Budget speech to woo voters ahead of the 7 May's general election.

1617: Shares in UK listed booze makers and pub owners have fizzed higher after the duty relief announced earlier. JD Wetherspoon, Greene King, SABMiller and Diageo all gained.

1600: Is this a withering putdown from the Office for Budget Responsibility, or just economist caution? Page five of the OBR report says: "The coalition government’s policy decisions in this Budget are not expected to have a material impact on the economy." This comes after many of the measures introduced by the Chancellor in his previous Budgets and autumn statements have been criticised as not having any effect on the nation's finances.

1557: Digital Look's oil expert Gaurav Sharma has written a deeper analysis of the chancellor's proposed changes to boost the UK oil and gas sector. This notes that the country’s first comprehensive overhaul of hydrocarbon taxation since 1993, with lead to over £4bn of additional investment and at least 120m barrels of extra oil equivalent in the next five years. The move is likely to boost North Sea oil production by 15% by 2025, according to the OBR.

1641: Not been covered much, this, but amid the tax cuts Osborne unveiled a groundbreaking, green energy generating tidal lagoon worth £1bn, as a presumed counterpoint to the oil and gas cuts. If successful, similar structures will be developed around the country in what would ultimately be a £12bn project.

1536: The banking industry has unsurprisingly bemoaned the increase in the bank levy. Anthony Browne, chief executive of BBA lobby group said: “The bank levy imposes a significant cost on banking businesses in the UK, which is making many banks move work and jobs to other parts of the world, and is deterring international banks from investing in the UK. This major increase in the bank levy is likely to accelerate that process and damage the competitiveness of the UK economy.

“This will also further disadvantage UK headquartered banks by increasing tax on their overseas activities, while their competitors in those markets do not pay this tax at all.”

1515: Investors and businesses should remember that most of the measures depend on the Conservatives remaining in power at the general election.

One of these measures is the Help to Buy ISA, which Peter Williams, a director at the Intermediary Mortgage Lenders Association (IMLA), notes would be a welcome initiative, but "given we are just weeks away from the General Election, whether or not the new Housing ISA sees the light of day... remains to be seen".

He added that nothing in the budget looked to address the worsening affordability in the housing market: "The Help to Buy ISA will help some households but we must guard against a situation where house prices rise faster than savings – the fate suffered by previous interventions in this area."

1458: The CBI liked the look of the Budget, setting the tone for the stability and consistency that businesses need to grow and prosper. “The reduction of the headline rate of Corporation Tax to 20% next month, is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment," says director-general John Cridland. He points out that the oil and gas measures support an industry with 450,000 UK jobs and a major contributor to GDP.

He added: “Giving savers greater freedom over their pensions, including creating a secondary annuities market, boosts choice but after a period of flux what's needed now is breathing space for the industry and consumers to get to grips with all the changes.”

1431: The annuities changes are expected to be a further big boost for the property sector and financial advisers. With up to five million existing pensioners now able to swap their annuity for cash, research shows a third of those aged 45 to 64 with a pension would consider accessing these funds to purchase a buy to let property.

"Britain’s ranks of ‘silver landlords’ could increase significantly following the change in regulation," said Nick Breton, head of insurer Direct Line's business arm.

However, many annuity sellers will not be able to achieve the value they want from selling their annuities and tax treatment will need to be clarified, said Jeremy Leach, boss of fund provider Managing Partners, with the complicated process requiring "significantly more demand" for financial advice.

1403: Vicky Redwood, chief UK economist at Capital Economics, praises the Chancellor for sticking to his word and delivering a fully-funded budget despite the general election just around the corner. She predicts four years of "deep spending cuts" and "very low" interest rates throughout most of the next parliament in order to reach budget surplus by 2019.

"The Chancellor has scaled back the spending cuts a bit, ending them a year early," she notes, with spending in 2019/20 is now projected to rise in line with GDP, rather than falling further.

"So instead of a £23bn budget surplus in 2019/20, he will now run a smaller surplus of £7bn. But that still leaves four years of deep spending cuts to get through first. Indeed, the big picture is that the fiscal squeeze is still only halfway through, meaning that interest rates will need to remain very low throughout most of the next parliament."

1351: Let's get some comment from economists and analysts. BNP Paribas highlight the upward revision to growth and the Chancellor's major focus on debt reduction and economic responsibility, with little by way of pre-election largesse.

"The Chancellor has taken a gamble that fiscal responsibility, rather than pre-election largesse, will be a vote-winner. Clearly raising the tax-free allowance and reducing taxation on savings will help at the margin, but there is little in the Budget to take the sting out of Labour’s criticism on health service funding or public spending cuts generally. Time will tell if a remarkably restrained Budget will pay dividends at the ballot box."

1346: Here's a link to the Budget document itself. All 124 pages of it.

1341: Opposition leader Ed Miliband now gets a chance to respond, and it's fairly withering. A sample: "It's a budget people won't believe from a government they don't trust." And he adds: "Never has the gap between the Chancellor's rhetoric and the reality of people's lives been greater." Later, still smarting from the two-kitchens jibe, he slings in this zinger: "The only thing long term about his plan is that it will take twice as long to balance the books."

1331: The chancellor has taken his seat with pat on the shoulder from the PM. That seemed like a strong vote winner. But let the debating begin, with Labour given their turn to pick apart Osborne's rhetoric.

1328: A new "fully flexible ISA" is announced, allowing people to take money out of ISA and put back within year and not lose your allowance. Also, in a boost to the housebuilding sector as the current Help to Buy scheme tails off, a 'Help to Buy ISA', where for every £200 saved for a housing deposit, the government will top up with £50. "Effectively a tax cut for first time buyers", says Osborne.

1321: Osborne says the beer duty is cut by a penny as is cider, with Scotch whisky duty down 2% along with other spirits and wine duty frozen. He also has cancelled his planned petrol duty increase.

1316: The Chancellor has perhaps introduced a package to helping the 'internet of things' tech companies just so he can slip in a jolly jibe at Labour leader Ed Miliband. To take a "ridiculous example" to demonstrate how this works, he explains, "should someone have two kitchens they'll be able to control both fridges from the same mobile phone". Commons rings with laughter on both sides... even from Red Ed himself.

1311: He taketh away with one hand but then giveth with the other. The Chancellor wants to raise the bank levy to 0.21%, raising an additional £900m a year. But announces £1.3bn support for the oil and gas industry. First, from start of next month a new simple, generous tax allowance to stimulate investment, the government will invest in new seismic surveys, the petroleum revenue tax will be slashed from 50% to 30% to support investment in older fields, and cutting the supplementary charge from 30% cent to 25% and backdating this. He says this will boost expected North Sea oil prod by 15% by end of the decade.

1303: Chancellor announces new measures to close tax loopholes and announces penalties for tax avoidance to raise £3.1bn over next few years. "Let the message go out this country's tolerance for those who will not pay their share of tax has come to an end."

1259: The pensions lifetime allowance has been cut to £1m and from 2018 will be indexed. Osborne says the share of income tax paid by the top 1% has risen from 25% in 2010 to 27% this year.

1254: Debt is falling a year earlier than forecast at Autumn Statement, Osborne says, which means austerity can finish a year earlier. He says the state is neither "smaller than we need, nor larger than we can afford". Britain will be running a surplus for the first time in 18 years...in 2019, he pledges, with 2018/19 expected to see budget surplus of 0.2% of GDP. Lower borrowing and falling debt as a share of GDP can only continue with a credible approach to welfare, he argues.

1252: The government plans to sell £13bn of Northern Rock assets, together with £9bn of Lloyds shares to be sold in the coming year. "We will use resources from the bank sales, lower interest payments and lower welfare bills to pay down the national debt... Higher national debt leaves our nations exposed."

1244: The OBR revised down inflation forecast to 0.2% this year, not 1.2% previously forecast. Means £35bn less to be paid on new debt.

1243: Osborne pleases Northern members with the nice stat that Yorkshire has created more jobs than the whole of France. "Britain's manufacturing output has grown more than four-and-a-half times faster than it did in the entire decade before the crisis." And over the last year, the North grew faster than the South, he says. "We are seeing a truly national recovery."

1241: Latest forecast from Office of Budget Responsibility showed that, at 2.6%, Britain grew faster than any other major economy in the world. But, since autumn statement has been the fall in the oil price which has seen the OBR revise down growth of world economy but has revised up 2015 GDP forecast to 2.5% from 2.4%. The projections for 2016 is for 2.3%, and 2017 2.3%.

1236: "We will use whatever additional resources we have to get the deficit falling. No unfunded spending."

1234: "Today I report on Britain this is growing creating jobs and paying its way.. Britain is walking tall again," the Chancellor has begun, initially reeling off a list of achievements of the government.

1211: The House of Commons is currently ringing to the sounds of David Cameron's jousting with MPs for Prime Minister's Questions. George Osborne steps up at 12.30.

1145: Ahead of the Budget the UK’s jobs data from the ONS was fairly mixed. The unemployment rate remained stuck at 5.7% over the three months to January, while earnings growth slowed.Employment hit its highest ever mark of 73.3% since comparable records began, according to the ONS. "However, and it’s a big however ahead of the post-Budget remarks, wage growth slowed once again, falling short of both last month’s figure and this month’s forecasts," noted Spreadex analyst Connor Campbell.

1132: The Prime Minister's official spokesman told reporters, in response to a question about the cabinet's response to the Chancellor's Budget: "I think you will see a very strong package of measures and that view was shared right around the table. There was a clear expression of views from around the table that it was a good and strong package."

1130: Tom Newton Dunn, political editor of the Sun, tweets about rumours that the budget will be aimed at damaging Labour's campaign with some light-fingered borrowing of the centre-left party's policies.

1100: Chancellor George Osborne is expected to use upgraded GDP growth for this year and next as an argument to ease planned spending cuts while trying to clear the deficit and fund tax cuts for workers, The Times reported.

The OBR is expected to increase its growth forecast for 2015 from 2.4% to 2.7% and for 2016 from 2.2% to 2.5%, making Britain the second strongest of all G7 leading countries after the US in both years, according to HSBC. Simon Wells, the bank’s chief economist, said that faster growth would prove a "boon to the public finances”.

1038: Capital Economics says the Office for Budget Responsibility (OBR) looks set to nudge up its near-term growth forecasts slightly. "However, the big picture is that these changes will be only marginal and will just offset the shortfall in 2014 growth relative to the OBR’s forecast. The OBR will probably deem stronger near-term growth to be a temporary response to the fall in energy prices, rather than an increase in the economy’s supply capacity."

Economists see possible new measures for 2015-16 including tax cuts such as support for oil and gas sector, reduction in beer duty and extra NHS and defence spending. An increase in the bank levy, rise in tobacco duty and cuts in pensions lifetime allowance are also expected.

1015: The proximity of the general election and the uncertainty of the outcome, with recent polls putting the incumbent Conservative and opposition Labour party roughly equal, make this Budget an even more significant event, say Deutsche Bank analysts.

"While little time has passed since the last fiscal event – the Autumn Statement back in December – the public finances look in better shape which may afford the Chancellor some room for manoeuvre in providing a very modest fiscal giveaway without compromising his existing plan. Still, we would expect any high profile sweeteners to be roughly matched by more surreptitious tightening such that the speed of deficit reduction is not altered significantly."

0932: Oil stocks have already started to move in anticipation of a tax cut from the Chancellor. Britain’s oil production will be boosted by nearly 25% over the next 35 years if the expected North Sea tax cuts are delivered today.

A study by the University of Aberdeen, a city built on North Sea oil, have estimated that the UK North Sea’s production will spurt to 14.7bn barrels by 2050 from 11.9nn barrels today if the budget can generate cost reductions and tax cuts for the industry, according to The Times.

0915: Here's our fuller Budget preview from earlier in the week.

0900: Having promised to balance the books by 2017/18, the Chancellor will require £30bn in either spending cuts or tax rises in the first years of the next parliament.

However, a major boost is expected for the oil industry, with pubs and pensioners also predicted to benefit.