Budget: Income tax cut will benefit millions of workers

The chancellor will deliver his Budget in the Commons around 1230 GMT

The government is expected to announce in Wednesday's budget that millions of workers will have their income tax cut.

This will be achieved by raising the personal allowance by £600 but will not come into effect for another 12 months.

It is likely that the increase in fuel duty which had been due to rise at the end of the month will be cancelled.

Chancellor George Osborne is limited in what he can do by huge government debt.

Mr Osborne is also expected to help thousands of first time home buyers by announcing a £250m shared equity scheme.

Businesses are hoping for less regulation, and in Northern Ireland there is an expectation that he may have something to say on the reduction in corporation tax, the tax companies pay on their profits.

It is hoped such a move might help to attract more inward investment.

But with Northern Ireland's economy at a standstill, and unemployment rising faster than in any other UK region, businesses are hoping that there will be no further tax increases, which would have a serious impact on economic growth and business confidence.

Economist Neil Gibson said the expected rise in personal allowances would provide a "very welcome but modest" boost.

"The amount you'll save will only go some way to offsetting the amount of the cost that your weekly grocery shop is going up," he said.

Mr Gibson said the chancellor had very little room for manoeuvre because the "tank is virtually empty".

"What we will see is a chancellor who is going to talk about his budget for jobs, being very sensitive to unemployment levels," he said.

"He will try to talk sympathetically about the problems people are facing.

"The message for our executive here is that it is not going to change very much the budget we've got to work with and as a society, it is really over to us to solve our own problems.

"We can't look across the water for the chancellor to throw us any more revenue.

"We're going to have to find ways of better spending our own money or raising our own money, if we think there are things in NI that we don't want to tolerate."