Osborne bids to bring voters onside with pre-poll Budget

George Osborne will on Wednesday unveil arguably his most political Budget to date as he attempts to translate the economic recovery into votes, promising tax cuts, a crackdown on tax avoidance and a loosening of austerity.

Conservative strategists want Mr Osborne to set the tone for the election campaign and wrongfoot Labour, in the hope that the chancellor's sixth Budget is not his final one.

Mr Osborne will warn that Britain's public finances are still vulnerable, but will use the statement to set out a brighter future for ordinary families and a moderation of planned spending cuts if they stick with the Tories on May 7.

Since the most economically significant Budget of 2015 will take place in the weeks after the general election - whichever party is in power - Mr Osborne's statement will be notable mainly for its political impact.

Tory strategists are hoping Mr Osborne will draw a link between the economic recovery and the individual circumstances of voters, with polls putting Conservatives and Labour neck-and-neck.

"He needs to show not only that there is a long-term economic plan but that the voters he wants to win over are part of it," said Rick Nye, managing director of the pollsters Populus. "The question is: a plan for who?"

Mr Osborne's answer will be to raise the personal income tax allowance to about £11,000, and to give current pensioners the right to cash in their annuities as revealed in the Financial Times last week. Measures to help savers are also expected: the Treasury played down speculation of a new £1,000 tax-free allowance for savings income.

The chancellor will also flag up a Tory manifesto commitment to raise the inheritance tax threshold to £1m - a flagship party policy since 2007 which was omitted from the Budget because of Liberal Democrat opposition.

Populist policies such as a cut in beer duty will be offset by a crackdown on tax avoidance by individuals and by multinational corporations - an attempt by Mr Osborne to put himself on the side of ordinary voters.

The chancellor may also cut from £1.25m to £1m the lifetime limit for tax-free pension contributions, another attempt to show he is prepared to tax the wealthy more to help poorer families.

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Mr Osborne will also increase the rate of the annual bank levy: because banks have been shrinking their balance sheets, the chancellor will charge them a higher rate of tax to ensure that the exchequer continues to receive its target yield of £2.5bn.

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Mr Osborne said on Tuesday night the country faced a choice between a return to economic "chaos" or sustained prosperity. He said: "We choose the future. We have a plan that is working - and this is a Budget that works for you."

Ed Balls, shadow chancellor, said: "The Tories are planning more extreme spending cuts after the election, which go way beyond balancing the books and will put our NHS at risk."

But recent economic developments have given Mr Osborne more fiscal room for manouevre; he is expected to use that freedom to reduce the scale of cuts in key public services in the next parliament.

<>The Office for Budget Responsibility will upgrade economic growth in 2015 and 2016 as a result of cheaper energy boosting household incomes and lower inflation and interest rates reducing the cost of government borrowing.

Together with the £23bn surplus in 2019-20 already penciled-in at the time of the Autumn Statement, the chancellor has significant room for manoevre to run a surplus, promise tax cuts in a future Tory government and reduce the severety of the planned austerity in public spending after 2015-16

But the chancellor, who has promised "no gimmicks, no giveaways", also has an interest in persuading voters that the economic situation remains parlous and that a switch to Labour would endanger the recovery.

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