Portrait of the week | 26 June 2010

In the Budget, Mr George Osborne, the Chancellor of the Exchequer, said that the balance of cuts to tax rises would be 77 per cent to 23 per cent. Whitehall departments would have to cut spending by 25 per cent. Borrowing would fall from £149 billion this year to £20 billion in 2015-16. Debt would be 67 per cent of GDP by 2015-16, compared with the 75 per cent planned by Labour in its budget in March. Current expenditure of £637 billion this year would rise to £711 billion in 2015-16, to meet debt interest. Mr Osborne raised VAT from 17.5 per cent to 20 per cent, from 4 January 2011. For basic-rate income tax payers, the personal allowance will rise by £1,000 in April, to £7,475. Capital gains tax for higher-rate taxpayers rose to 28 per cent immediately. Councils would be offered funds to allow them to freeze council tax for a year.