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George Osborne
George Osborne will present the summer budget to MPs in the House of CommonsGetty

Chancellor George Osborne used today's budget to announce plans to raise the 40p income tax, introduce a new National Living Wage and commit to Nato's defence spending requirement of 2% of GDP.

In a sweeping budget statement, Osborne also gave Iain Duncan Smith breathing space to find cuts in the welfare budget as part of the first all-Conservative budget in 18 years.

He also:

George Osborne presented the summer budget to MPs in the House of CommonsIBTimes UK
15:42

After a rousing reception form Tory ranks in the House of Commons, Osborne has been installed as the favourite succeed Cameron as both party leader and prime minister.

Ravender Sembhy provides a round-up of the day the chancellor became the man to beat at the 2020 general election.

15:35
William Keegan: Osborne's 'Victorian' budget is an 'assault on the poor'IBTimes UK

Economist and IBTimes UK columnist William Keegan has his final say on a momentous budget speech from the chancellor.

14:59
Andy Burnham faces criticism
Shadow health secretary Andy Burnham is favourite for the Labour leader mantleReuters

More reaction, this time from Stuart Thomson, Public Affairs Consultant at Westminster based law firm Bircham Dyson Bell, who said Labour had been "floored" by the budget. However, he warned of a sting in the tale for the chancellor.

"There are four real losers from today's Budget – Andy Burnham, Yvette Cooper, Liz Kendall and Jeremy Corbyn. The Chancellor has played an absolute blinder in delivering a truly Conservative Budget full of tax reductions, welfare tightening and measures to support business – whilst also flooring Labour and its main leadership candidates with the announcement of a Living Wage.

"However, Osborne's budgets often receive great initial headlines followed by unfavourable comment in the days afterwards once the impact of all the measures are added together.

"Small businesses and young people may be feeling particularly worried about the cumulative impact of the measures announced in the Budget. Changes to rents could also cause unexpected shifts in the housing market."

14:55

After more than an hour at the dispatch box, Osborne ushered in radical changes to welfare, pay and housing. Read his speech in full here.

14:48

In its assessment of the budget, the OBR has said "loosened" its grip on public services.

"The new Government has used its first Budget to loosen significantly the impending squeeze on public services spending that had been pencilled in by the Coalition in March.

"This is being financed by welfare cuts, net tax increases and three years of higher government borrowing. The Government has delayed the expected return to a budget surplus by a year to 2019-20, but is then aiming for a slightly bigger surplus in the medium term."

To read the full 221-page report, click here.

14:33
Osborne and Boris
Getty

Two years ago, the Chancellor was 16/1 to be next Tory leader. However after today's budget speech, Osborne is now 5/2 to succeed Cameron, overtaking Mayor of London Boris Johnson as favourite, according to Ladbrokes.

The bookmaker also makes Osborne the favourite to become the next prime minister.

Next Prime Minister:

11/4 George Osborne
3/1 Boris Johnson
8/1 Andy Burnham
10/1 Theresa May
10/1 Sajid Javid
14/1 Yvette Cooper
20/1 Liz Kendall
50/1 Jeremy Corbyn

14:28
Keegan Buy to letIBTimes UK

William Keegan comments on changes to the Right to Buy scheme.

14:27

One policy that will grab headlines is Osborne's abolition of the non-dom status. From 2017, non-doms who've spent 15 of the last 20 years in the UK will pay UK tax.

But while the reforms are expected to land the Treasury £1.5bn, James Hender, partner and head of the private wealth group at Saffery Champness, said individuals could simply spend longer outside the UK.

"Abolishing the non dom status from April 2017 for long term residents will raise money for the Treasury, but I hope he hasn't killed the goose that lays the golden egg," Hender said.

"There is a risk that people affected will simply drop their number of days in the UK to ensure that they are not resident at all."

"New measures announced will also stop individuals who are born in the UK from inheriting non-dom status."

"Bringing UK properties held in offshore structures into the IHT (inheritance tax) net will unpick years of careful planning by non-doms, but it should level the playing field across the board."

14:20
London Shoppers
Reuters

Sundays might never be the same again after proposals were launched to loosen Sunday trading hours.

Sue Goble, CEO of accountancy software company KashFlow, said: "Many small businesses throughout the UK struggle to compete with the online goliaths and often restrictive Sunday trading hours continue to put SMEs on the back foot.

"Change has been long overdue and we fully support the move to even the playing field for the small businesses which should be the growth engine of the UK economy."

14:14

Landlords beware. Osborne said he would end the tax relief that allowed them to offset the interest on their monthly repayments against their income tax bills.

14:08
William Keegan on defence spendingIBTimes UK

One of the loudest cheers came when Osborne committed to Nato's 2% defence spending. This is what economist William Keegan thought of the policy.

14:00

Here is our story on the green paper that could pave the way to making pensions more like Isas.

13:57
Keegan Inheritance taxIBTimes UK

On plans to increase the inheritance tax threshold to £1m, William Keegan said this.

13:57
Harriet Harman

Labour's acting leader Harriet Harman has been on the attack.

So far she has said:

  • cutting tax credits for working people will leave them worse off
  • changes to inheritance tax were not as important as getting people on the property ladder
  • the new Living Wage will not be enough to live on once tax credits have been removed

13:52
William Keegan: Child benefit cuts are "Victorian" and "unpleasant"IBTimes UK

More from William Keegan, who describes child benefit cuts as "Victorian" and "unpleasant".

13:41
George Osborne

Osborne sits down to a pat on the back from Cameron.

A sweeping budget statement from the chancellor included:

  • The announcement that as of April 2016 there will be a new compulsory National Living Wage for over 25s
  • Starting in April 2016, a new National Living Wage will be introduced, Starting at £7.20 an hour, it will rise to £9 an hour by 2020
  • Tax credits were slashed, defence spending guaranteed to meet 2% of national income and devolution to Manchester, Sheffield, Liverpool and Leeds
  • Inheritance tax threshold was raised to £1m and the public sector was given a 1% pay rise for the next four years
  • Corporation tax will fall to 19% next year and 18% in 2017
  • There will be an 8% surcharge on bank profits introduced from January 2016
  • The personal allowance was raised to £11,000 and the 40p threshold sill start at £43,000

13:39

A rabbit out of the hat - from April, New National Living Wage will be compulsory. "Britain deserves a pay rise", says Osborne, and will reach £9 per hour by 2020.

13:38
UK army
Getty

Tories rejoice as chancellor guarantees defence spending will be 2% of national income "not just this year, but every year of this decade".

13:34

There is the 40p tax threshold being raised to £43,000 (up from £42,385) - lifting 130,000 out of higher tax threshold.

13:30

On tax credits, Osborne outlines that income threshold for tax credits reduced from £6,420 to £3,850.

There will also be similar reductions for Universal Credit work allowances. "Not easy, but they are fair," he says.

The benefits cap will also be reduced to £23,000 in London and £20,000 in the rest of the country.

13:21
IBTimes UK

Here, economist William Keegan discusses the political hot potato that is the NHS.

13:20
BBC
Reuters

As had been reported, BBC agrees to take on free-TV licences for over-75s.

13:18

Cutting corporation tax to 20% created "millions of jobs", Osborne says.

Slashing it to 19% in 2017 and 18% in 2018. "Britain is open for business," he adds.