Osborne delivers half-yearly budget update

LONDON (Reuters) - Chancellor George Osborne presented his half-yearly budget statement to parliament on Thursday. Following are highlights from his speech: RUNNING A SURPLUS "From the 11 percent back in 2010, the underlying deficit now falls to 6.8 percent this year - instead of the 7.5 percent they (OBR) were forecasting back in March. "It then falls to 5.6 percent next year, then 4.4 percent, 2.7 percent and in 2017-18, 1.2 percent. And by 2018-19 on this measure, the OBR do not expect a deficit at all. Instead, they expect Britain to run a small surplus. BORROWING FIGURES "This year we will borrow 111 billion pounds - 9 billion pounds less than was feared in March. That falls next year to 96 billion pounds, then down to 79 billion pounds in 2015-16, 51 billion pounds the year after, and 23 billion pounds the year after that. "So we're set to borrow 73 billion pounds less over the period than was forecast in March." BRITAIN'S ECONOMIC RECOVERY "Britain's economic plan is working. But the job is not done. We need to secure the economy for the long term. And the biggest risk to that comes from those who would abandon the plan." "Yes, the deficit is down. But it is still far too high and today we take more difficult decisions." GROWTH FORECASTS "At the time of the Budget in March, the OBR forecast that growth this year would be 0.6 percent. Today, they more than double that forecast - and estimate growth will be 1.4 percent. "Next year, instead of growth of 1.8 per cent, they are now forecasting 2.4 per cent. With faster growth now, it means they've revised the following four years to 2.2 percent, 2.6 percent 2.7 percent and 2.7 percent." UNEMPLOYMENT "Today in Britain, employment is at an all time high. And the OBR have revised their forecast for the future up. They were expecting jobs to stay flat over the year. But they now expect the total number of jobs to rise by 400,000 this year. "Unemployment is also lower than in 2010, and is forecast to fall further from 7.6 per cent this year to 7 per cent in 2015, before falling even further to 5.6 per cent by 2018." DEBT "At the Budget, the OBR forecast debt to be falling in 2017-18. It is now forecast to fall in 2016-17 - that's one year earlier. "The structural deficit is the borrowing that stays behind even when the economy improves. Thanks to our actions it has fallen from the 8.7 percent we inherited to 4.4 percent today - more than any other major advanced economy. It goes on falling but no faster than we previously expected. "This Autumn Statement is fiscally neutral across the period." TAX EVASION "Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years." CHANGES TO PROPERTY RULES "Britain is an open country that welcomes investment from all over the world, including investment in our residential property. But it's not right that those who live in this country pay capital gains tax when they sell a home that is not their primary residence - while those who don't live here do not. "That is unfair. From April 2015, we will introduce capital gains tax on future gains made by non residents who sell residential property here in the UK. "I can also announce, from January 1st next year, the rate of the bank levy will rise to 0.156 per cent." SHALE GAS "We have to say: we are prepared to push the boundaries of scientific endeavour, including in controversial areas, because Britain has always been a pioneer. "The country that was the first to extract oil and gas from deep under the sea should not turn its back on new sources of energy like shale gas because it's all too difficult. And today we go further. A new tax allowance to encourage investment in shale gas that halves tax rates on early profits." STAMP DUTY AND HELP TO BUY "Today, we also abolish stamp duty for shares purchased in exchange traded funds to encourage those funds to locate in the UK. "And I can today announce that Aldermore and Virgin to challenge the banks expect to join the scheme this month." BUSINESS RATES "We've also listened to the small business groups and we'll relax the rules that discourage these firms from expanding and opening extra premises. "But that doesn't go far enough. All businesses are expecting rates to rise by 3.2 per cent next year. Instead, I will cap the inflation increase in business rates for all premises at 2 per cent from next April." (Reporting by Sarah Young, Christine Murray, Alexander Winning; Editing by Kate Holton)