Osborne Budget offers hope on debt

The Chancellor revealed he expects to have a Budget surplus by 2020, bringing to an end 10 years of public spending cuts.

Mr Osborne repeated that there would still be £30bn worth of savings needed in the next parliament, but that measures to tackle these are expected to finish sooner than originally planned.

Some £12bn of savings will come from the welfare budget, with the growing number of people in work reducing the pressure on state handouts, as well as further sales of bailed out banks’ assets.

“The hard work and sacrifice of the British people has paid off. The original debt target I set out in my first Budget has been met,” he said.

“We will end this parliament with Britain’s national debt share falling. The sun is starting to shine - and we are fixing the roof.

“Because the national debt share is falling a year earlier than forecast at the Autumn Statement - the squeeze on public spending ends a year earlier too.

“In the final year of this decade, 2019-20, public spending will grow in line with the growth of the economy.

“We can do that while still running a healthy surplus to bear down on our debt.”

Mr Osborne said the Government will sell £13bn of mortgage assets still held from the bailouts of Northern Rock and Bradford and Bingley, and a further £9bn of Lloyds shares, with the proceeds used to pay off UK debt.

The continuing cuts though will see another 800,000 public sector post disappear by 2019, a total of 1.1 million since 2011, the Office for Budget Responsibility predicted.