The Simplest Budget Explainer You'll Read Today

The interesting bits from George Osborne's budget. "A billion here, a billion there, sooner or later it starts to add up to real money."

Yui Mok / PA

1.

As was heavily hinted ahead of the budget, the amount spent on welfare is going to drop significantly. Most of the welfare budget is pensions, but the government has promised to keep pensions rising in line with inflation, so those cuts are going to fall exclusively on people of working age.

2.

Those cuts were originally to be made by 2017, but plans have been put back a year.

3.

Now that maintenance grants have been replaced with loans, a student living away from home in London who needs support could end up borrowing £9,000 a year for tuition fees and £8,009 for maintenance. £17,009 x 3 = £51,027.

4.

That's unchanged, and will in fact be frozen for the next five years, meaning that in real terms it will fall by about 12% over the parliament.

5.

The Office for Budget Responsibility reckons that most of those cuts will benefit the profits of big corporations.

6.

Up from £10,600. This is slightly faster than inflation, so it will reduce poorer people's tax in real terms.

7.

Up from £40,000, and again, this is an above-inflation rise.

8.

When the coalition came into power in 2010, it promised to stop the British state spending more money than it earned by 2015. Obviously it failed in that respect, and in fact since its final budget in March this year, the OBR's forecast has slipped another year, until 2019.

9.

That's the deficit. It is forecast to drop to £69 billion next year, £43 billion the year after that, and to reach zero around 2019, although that date – as mentioned above – has been put back several times over the last five years.

10.

A pay freeze of 1% for five years – on top of a similar freeze for the last four years – means that public sector workers will have faced almost a decade of real-terms wage cuts, because their pay rises have not kept pace with inflation.

11.

Although that's for over-25s only. George Osborne is calling it a "National Living Wage". It starts next year at £7.20 an hour, rising to £9 by 2020. The current minimum wage is £6.50.

The current UK "Living Wage", according to the Living Wage Foundation, is £7.85. However, that Living Wage is calculated to include tax credits, which have just been cut in this budget. Families will start to have their tax credits reduced when they earn above £3,850, down from £6,420, and it is not clear what this means for the Living Wage calculation.

12.

In the last budget, George Osborne promised £1.25 billion for children's mental health services. This was supported in the Conservative manifesto ahead of the May general election with a pledge to increase funding for mental health care. However, there is no mention of "mental health" or "mental illness" in the new budget Red Book.

13.

Previously the threshold for paying tax on assets passed to your children upon your death was £325,000 per person or £650,000 for a couple. Now it's £500,000 per person.

14.

From April 2017, families who have a third child will gain no extra support through the tax credit system or the housing benefit system.

15.

That's to keep up with our responsibilities as a member of NATO, and adds up to about £34 billion a year.

16.

All the money earned by everybody in Britain put together – our national GDP – adds up to about £1.7 trillion. Britain owes about £1.36 trillion to banks and foreign countries.

17.

It will fall from 20% to 19% in 2017, and further down to 18% in 2020. In 2010, under the then Labour government, it was 28%.

18.

In 2010/11, the maximum an out-of-work couple with children living outside London could receive was £28,300. That dropped to £26,000 this year. By 2020/21, it will fall to £20,000.