Growth for the UK economy predicted to be 1.2 per cent this year, 2.3 per cent for 2011.

• VAT to rise by 2.5 percentage points to a rate of 20 per cent from January 4th 2011.
• A banking levy introduced from January 2011. Tier 1 assets will be exempt from levy which is expected to raise £2 billion.
• Corporation tax to be cut by one point a year over the next four years, taking it to a rate of 24 per cent by 2014-15.
• Structural budget deficit should be in balance by 2015-16. Borrowing to fall to 1.1 per cent of GDP by 2015.
• Unemployment forecast to be 8 per cent of GDP this year, falling to 6.1 per cent by 2015-16.
• Government departmental spending to be cut by 25 per cent.
• Two-year pay freeze for the public sector, but £250 pay rise for those earning under £21,000.
• State pension age to be raised to age 66. Public service pensions to be investigated.
• Welfare spending rises to be in line with consumer prices, not retail prices.
• No duty increase on tobacco, alcohol or fuel. Cider duty rise reversed.
• The Government will look at selling shareholding in air traffic body Nats and the student loan book will be sold.
• UK not joining the euro in this Parliament, and euro preparation unit in the Treasury disbanded
• Housing benefit in "dire need of reform". Maximum limits reduced to £400 a week for a house.
• Civil List remains frozen at £7.9 million for this year.
• Capital gains tax reform: Higher rate taxpayers to pay 28 per cent from midnight. The 10 per cent CGT rate for entrepreneurs extended to the first £5 million of lifetime gain.
• Child benefits to be frozen for three years.
• Higher rate income tax threshold frozen.
• Planned tax relief for the video games industry cancelled.
• Green investment bank planned and investment in digital infrastructure.
• Planned landline duty to be abolished and private broadband expansion to be encouraged.
• Link to earnings for State pensioners restored from next April or a 2.5 per cent rise, whatever is greater.

Source: PA