Osborne's Budget: 'We Are Walking Tall Again'

Chancellor George Osborne has delivered an "intensely political" Budget he hopes will win the Tories the election in 50 days' time.

He offered sweeteners to taxpayers, savers, home-buyers and the regions, while doing his best to blunt Labour's lines of attack in what is expected to be the most neck-and-neck campaign of modern times.

At the heart of his giveaways, he announced a Help To Buy ISA , with the Government contributing £50 for every £200 saved towards a deposit on a first home - a 25% top-up.

He also announced voters would not have to pay tax on the first £1,000 interest earned on savings - meaning the vast majority of savings accounts would be tax free.

As he opened his sixth, and possibly last, Budget, Mr Osborne said the UK has grown faster than "any other major advanced economy in the world" and Britain was "walking tall again".

He said: "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.

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

Mr Osborne also said the 40p tax rate threshold will increase from £42,385 to £43,300 - with the Conservatives committed to raising it to £50,000 by 2020.

And the level at which people start to pay income tax will increase to £11,000 - meaning an extra £900 a year for 27 million people. It will also take 3.7 million Britons out of income tax altogether.

However, the Chancellor tried to dodge allegations of electioneering by insisting his plans were economically responsible.

Announcing a £9bn windfall from bank sales, falling welfare bills and lower debt interest, he said the extra money would be used to pay down the national debt and not be splashed on sweeteners.

Sky's Political Correspondent Sophy Ridge said: "With just 50 days until the election, George Osborne's Budget was always going to be intensely political.

"Much of it was spent shooting down Labour attack lines – specifically on the claim that the Tories would reduce spending to 1930s levels. By some clever number crunching, the Conservatives can now claim that spending will be at the level seen in 2000."

:: Budget: As It Happened

Other measures included a so-called "Google tax" of 25% for multinationals which move their profits abroad, as well as an increase of the bank levy to 0.21%, raising £900m a year.

There will also be investment in the regions - including the "northern powerhouse" and a tidal lagoon in Swansea.

:: Full list of the key measures in the 2015 Budget

Labour leader Ed Miliband said Mr Osborne continued to deliver for the rich and was sharply critical of the lack of investment for the NHS or public services.

"Britain needs a better plan, a plan for working families. Britain needs a Labour government," he said.

"This is a Budget people won't believe from a Government that is not on their side - because of their record, because of their instinct, because of their plans for the future."

Mr Osborne attempted to kill off Labour claims that a Tory government would take spending back to the depression of the 1930s by declaring that by 2019/20 public spending as a share of GDP would be at the same level as 2000 - when Tony Blair was in power.

However, the independent Office for Budget Responsibility (OBR) said his pledge to end austerity a year earlier than expected will see a tighter squeeze on public spending in the next few years.

"This leaves a rollercoaster profile for implied public services spending through the next Parliament: a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years, followed by the biggest increase in real spending for a decade in 2019-20," it said.

The City cheered the Budget as well as separate signals lessening the chances of an interest rate hike, with the FTSE 100 enjoying its strongest rise in two months, closing up 107.6 points at 6945.2.

Experts believe the election is the most unpredictable for a generation.

A Sky News projection , following analysis of the latest polls, suggests a hung parliament with the two main parties virtually neck and neck.

It also comes after new figures showed the number of unemployed falling by more than 100,000 to 1.86m - the lowest since 2008.