A TAX cut for 31 million people, more money to tackle flooding and extra help for the homeless was announced in today's Budget by George Osborne.

The Chancellor also announced a powerful 'sugar tax' on the soft drinks industry to confront obesity head-on and froze both alcohol and fuel duty, helping hard-pressed motorists and pubs.

But the spending plans, which included a radical overhaul of the school system in Britain, came amid warnings that Britain's economic growth will slow down – with an extra £3.5 billion of cuts needed by 2019/20 to get Britain into a surplus after deficit reduction targets were missed.

The personal allowance, the amount workers earn before income tax kicks in, will rise from £11,000 next month to £11,500 next year - meaning an extra 1.3 million of the lowest earners will be taken out the system entirely.

In a bid to appeal to savers, the tax-free ISA limit will rise from a maximum of £15,000 to £20,000 - while a new 'under-40s' saving scheme is launching.

People under 40 will get £1 from the Government for every £4 they put in, with a yearly maximum of £1,000 for a £4,000 saving, to be used towards a home or pension.

The key measures, which also included £115 million to provide an extra 2,000 units of homeless accommodation across the country, were given a lukewarm reaction across Worcestershire today.

Pub landlord Ted Marshall, who runs Worcester's Cap 'N' Gown pub in Upper Tything, said: "It's always welcome to have no rise in beer and cider duty, but despite that the breweries are still putting their costs up.

"I will have been here two years in June and my costs will have gone up five per cent, pubs are still closing.

"So that freeze will make no difference whatsoever, we already pay three or four times the duty pubs pay in Germany, it's a considerable amount."

University of Worcester student Hugo Sugg, aged 25, a former rough sleeper who now lives in a flat in the city, said: "I'm happy with the £115 million for homelessness but we don't know the details, or where it will be spent yet.

"Two thousand extra units for homeless people is positive, but they need to realise it's not just the big cities with this problem.

"Yes, it's promising, but budgets say one thing and then do another five minutes later - let's see."

Ted Boulton, 37, an IT consultant of Alexander Road, St John's, said: "The saving scheme for the under-40s is brilliant.

"My only problem is that it feels like I'm too old for it already, maybe he should extend it to 45 - but I can't complain about free money."

During heated exchanges in the Commons today Mr Osborne called it a Budget which "puts the next generation first".

Labour leader Jeremy Corbyn said the economic recovery was "built on sand" and accused him of overseeing "six years of failure".

After the debate Worcester MP Robin Walker said: "It's a good Budget which is full of relatively tweaks, but ones I like - the personal allowance tax cut is huge.”

The Office for Budget Responsibility has downgraded its forecast of economic growth in 2015 from 2.4 per cent to 2.2 percent, and expects that to drop to two per cent this year.

Mr Walker added: “Delivering two per cent growth does allow us to deliver investment in schools, hospitals, roads, which is crucial and the sugary tax is very good too.

“There’s a lot of good stuff in there which will help people.”

Mid-Worcestershire MP Nigel Huddleston called it a Budget which is “backing small business”, as it included £7 billion in business rate relief and more cuts in Corporation Tax, taking it from 20 per cent now to 17 per cent by 2020.

Some 600,000 very small businesses will pay no rates at all under the new changes to business tax relief.

Mike Ashton, chief executive of Herefordshire and Worcestershire Chamber of Commerce, said: “This is the budget we wanted to hear.

“Businesses of all sizes in the county will be pleased to see the Chancellor’s latest announcements.

“Small businesses in particular will be pleased with positive changes to Small Business Tax Relief, while all of our membership – big and small – will be glad to see cuts in Corporation Tax and further moves to deal with big business tax avoidance.

“We are also pleased to see the Chancellor’s commitment to bridging the gap between the business and education community and welcome moves to forge a closer relationship between the two.”

Daniel Walton, chairs of West Worcestershire’s Labour Party, said Mr Osborne was “in a mess” after “cutting for ideological reasons”, saying living standards could not rise with growth being revised downwards.

West Worcestershire MP Harriett Baldwin said: "Today’s budget was a plan for keeping our economy on course while continuing towards delivering a budget surplus which puts the next generation first.

“There are measures that will be welcomed by Worcestershire people including the freezing of fuel duty for the sixth year in a row to help commuters and keep business on the move.

“Many more local traders will benefit from the doubling of the business rates threshold with 600,000 business now being removed from paying business rates again.

“The British economy is stronger because we confronted our country’s problems and took the difficult decisions. Britain is well prepared to handle this challenge, but only if we act now so we don’t pay later."

The tax cut will benefit 45,362 people in Worcester, with 2,153 low earners taken out of it altogether under next year’s personal allowance rise.

* Recap with our LIVE Budget blog from today HERE

* In a rush? Here's five key things about today's Budget

* See every new announcement in detail by reading the red book for yourself HERE


A new sugar tax on the soft drinks industry to be introduced in two years' time, raising £520m a year to be spent on doubling funding for primary school sport

Pure fruit juice and milk-based drinks to be excluded and small supplies will be exempt

Secondary schools in England to bid for new funding for extra after-school activities like sport and art

Plan for all schools in England to become academies by 2022

Compulsory maths lessons until 18 to be looked at

£500m to ensure "fair funding" formula for schools in England Libor funds to be spent on children's hospital services, specifically in Manchester, Sheffield, Birmingham and Southampton

Growth forecasts down but the UK still forecast to grow faster than any other major Western economy

The threshold at which people pay 40% income tax will rise from £42,385 now to £45,000 in April 2017

Tax-free personal allowance, the point at which people pay income tax, to rise to £11,500 in April 2017

Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers

0.5% rise in insurance premium tax

Annual threshold for small business tax relief to be raised from £6,000 to a maximum of £15,000 and the higher rate from £18,000 to £51,000, exempting 600,000 firms

Anti-tax avoidance and evasion measures to raise £12bn by 2020

More than £230m earmarked for road improvements in the north of England, including upgrades to M62

£700m for flood defences schemes, including projects in York, Leeds, Calder Valley, Carlisle and across Cumbria