In a separate part of the initiative, the Government will offer interest-free
loans for five years if people want to buy new-build homes.

The loans will be worth up to 20 per cent of the value of a newly-built homes,
with the buyer contributing 5 per cent as a deposit.

The loans will be available to anyone who wants to buy a new-built home worth
up to £600,000 and repaid only when the property is sold.

The Help-to-Buy schemes will support millions of people who currently cannot
afford deposits to buy a new home, as long as they pass credit checks.

Previous schemes have only helped first time buyers and those with an income
of less than £60,000.

“It’s a great deal for homebuyers,” Mr Osborne said. “It’s a
great support for home builders. And because it’s a financial transaction,
with the taxpayer making an investment and getting a return, it won’t hit
our deficit.”

The new Help to Buy scheme was a surprise bit of good news for families
struggling with the cost of living and high house prices.

Mr Osborne also cut a raft of planned increases in beer duty and scrapped a 3p
rise in fuel duty due later this year.

The Chancellor also extended help to low earners by raising the personal
allowance to £10,000, meaning people earning less than this threshold do not
have to pay any income tax at all.

He also cut the National Insurance contributions paid by small businesses, so
it will be easier for them to hire new staff.

However, the overall picture on the economy was gloomy, as the Chancellor
admitted growth will be half as much as expected at 0.6 per cent this year.
There will also be an extra year of austerity as it will take an longer to
start bringing down the national debt.

He said the economy will avoid a recession but take “longer than anyone
hoped” to get back on tarck.

“The problems in Cyprus this week are further evidence that the crisis is not
over, and the situation remains very worrying,” he added.

To help cope with the outlook, Mr Osborne ordered an extra £11.5 billion of
Whitehall spending cuts.

He said capping public sector pay increases at one per cent will have to
continue for another year into 2015 and 2016. Thousands in the civil service
will also lose the right to automatic annual increases in their salaries
just for long service.

Corporation tax will also be cut by a further percentage point to 20 per cent
by 2015 in an effort to boost business investment. The Treasury will also do
deals with Jersey, Guernsey and the Isle of Man to crack down on tax

In another effort to boost the economy, Mr Osborne gave Mark Carney, the new
Governor of the Bank of England, a bigger role in setting monetary policy to
help rescue the nation’s finances.

Budget 2013: Millions get help to buy new homes, says George Osborne –
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