Tom Brake

Ahead of the budget Liberal Democrats made our priorities clear. Make sure that in hard times, with rising living costs and stagnant earnings, the government helps those on low and middle incomes as much as possible. We also made clear that paying off the deficit must fall principally on those who can most easily shoulder the burden.

This budget achieves this - and is a budget of which Liberal Democrats can be proud. It is fiscally neutral - so that tax and benefit changes do not bring in any less money and we can continue to pay off the record deficit we inherited from Labour. This budget also redistributes wealth - with over 20 million people on low and middle incomes given a tax cut, paid for by raising the burden of taxation on the wealthy.

This budget has brought the biggest ever increase in the threshold before people pay income tax - £9,205 from next year. This is within touching distance of delivering the commitment on the front page of the Liberal Democrat manifesto to raise the tax free allowance to £10,000.

Liberal Democrats have made sure that this government has done what Labour never did - make sure the richest pay their fair share.

In this budget, our coalition government sent the strongest message possible that accounting tricks used by the rich to get out of tax are unacceptable. The chancellor closed tax loopholes on stamp duty and said he would be prepared to legislate retrospectively if tax accountants found new ways of avoiding it.

Under the general anti-avoidance rule proposed this week any financial transaction which has the sole purpose of reducing a tax bill will be made illegal.

The chancellor also announced a cap on tax free allowances which are often used by the rich to reduce their tax bills.

The coalition has increased property taxes, raising stamp duty on properties over £2m to 7%, and said it will consult on a 'mansion tax' for homes worth over £2m owned by companies.

All of these changes mean that despite a cut in the top income tax rate to 45p next year, the wealthiest will pay five times more in taxes than they with a 50p tax rate.

Today's media has been filled with talk of a 'granny tax'.

Let me be absolutely clear - there is no such thing as a granny tax.

No pensioner will lose any money which they already receive as a result of freezing the higher personal allowance they are currently entitled to.

And this year all pensioners will receive a rise in the basic state pension of £5.30 each week. This is the largest ever cash rise in the state pension since Lloyd George was the PM and 112 year old Grace Jones was a little girl!

This is a direct result of the Lib Dem 'triple lock' on pensions, and means that that from April the basic state pension will be £120 a year more than it would have been under Labour government policy.

If pensioners' higher personal allowance was not frozen, a pensioner who did pay tax (and fewer than half of all pensioners do pay tax) could have expected to gain an extra £1.29 a week. This is more than compensated for by the rise in the state pension, and the government has not touched other non-means tested benefits such as winter fuel allowance and free travel.

Finally on pensions, the Chancellor has announced that the government will proceed with plans for a 'citizens pension' which we have campaigned on for years. This will mean that in the future anyone with 30 years of paying in will receive a pension of £140 a week. Today the basic weekly state pension is £97.65.

This budget has been the toughest budget for the wealthy that I have seen in my 29 years in parliament - and it would not have happened without Liberal Democrats in government.

Coalition with the Tories is never easy and there are definitely some things, such as the lowering of the 50p tax rate, which were not our priority.

However making the rich pay more towards paying off the deficit, by whatever means, was the Liberal Democrat priority in this budget, and we have delivered this.

Below I have summarised some of the other key measures in the budget:

Taxes:

• Vehicle excise duty to rise by inflation
• No change in duty on alcohol
• Tobacco up by 5% above inflation - putting 37p on a packet of 20
• Personal tax statement to be sent to all 20 million taxpayers from 2014

Business

• Corporation tax cut to 24% from next month; by 2014 it will fall to 22%
• Bank levy to be increased to 0.105% from January 2013 - raising £2.5bn a year - to make sure that corporation tax cuts do not benefit the banks
• Simplified tax system for small firms with a turnover of under £77,000
• Government considering enterprise loans for young people to start their own business

Child Benefit

• Child benefit will be phased out when one earner in a household has an income of more than £50,000
• It will fall by 1% for every £100 earned over £50,000
• And scrapped completely for those earning over £60,000

Green Government:

• Secured £3 billion for the Green Investment Bank
• £860m for the renewable heat incentive, expected to increase investment in green heat technologies by £7.5bn by 2020
• £2.9bn of funding to international climate mitigation and adaptation measures over the next four years
• £200 million for low carbon innovation

Armed forces:

• Extra £100m to improve military accommodation
• Family welfare grant and council tax relief for armed forces doubled
• Personnel serving overseas will receive 100% relief on an average council tax bill