Key points of British government’s budget announcement

Key points of British budget

Key points in the budget announced Tuesday by Treasury chief George Osborne:

—Government borrowing to decline from 10 percent of gross domestic product to about 1 percent in five years.

—Spending cut by 32 billion pounds ($39 billion) a year by 2014-15.

—Value-added tax on goods and services to rise from 17.5 percent to 20 percent on Jan. 4; food, children’s clothing, books and newspapers remain exempt.

—Two-year freeze on public sector pay except for those earning 21,000 pounds a year or less.

—Corporation tax cut from 28 percent to 24 percent over four years.

—No income tax on those earning less than 7,475 pounds effective next year, an increase of 1,000 pounds; estimated to benefit 880,000 people.

—Capital gains tax to rise from 18 percent to 28 percent for high earners.

—A levy on balances of U.K. banks and foreign banks’ U.K. operations, to raise 2 billion pounds a year. Details of who pays and who is exempt are not announced.