Tax and benefit changes affecting millions of people have come into force amid a political row over their impact.

Labour are arguing that a child benefit freeze, tax credit changes and the way benefits are linked to inflation will leave many families worse off.

The Treasury said there would be “some losers” but the poorest 80% of households would, on average, be better off with some taken out of income tax.

The changes have come into effect as the new tax year starts.

The parties are at odds over who will lose out the most – with the government denying Labour claims that the changes are “regressive”, hitting the poorest hardest.

http://www.bbc.co.uk/news/uk-politics-12981021

Key Points from the BBC:

1. Chancellor George Osborne has delivered the Budget in the House of Commons
2. Fuel duty to be cut by 1p and expected 4p rise cancelled – all paid for by a £2bn tax on oil companies
3. Further £600 increase in personal tax allowance from April 2012
4. Financial help for 10,000 first-time buyers to get on property ladder
5. Tobacco duty rates up by 2% above inflation from 28 March, and alcohol duty rises – 4p extra on a pint, 15p on a bottle of wine and 54p on a bottle of spirits
6. Forecast for how much UK economy will grow in 2011 downgraded

For live update on the Budget: http://www.bbc.co.uk/news/uk-politics-12759543

Reuters:

Families are facing a “cost of living” crisis which will persist for years to come, Labour leader Ed Miliband said on Monday.

Miliband said the expectation that the next generation would always do better than the last was now under threat at a time of rising inflation and growing wage inequality.

Looking at potential remedies, Miliband said that the banking system should be reformed to support business and a range of ownership structures should be considered when the state sells its stakes in high street banks.

The Labour leader accused the coalition government of making things worse for families with children by decisions such as pushing up VAT sales tax and changes to tax credits.

“The crunch will be felt first and worst by low and middle income families, particularly those with children,” Miliband said.

http://uk.reuters.com/article/2011/02/28/uk-britain-labour-idUKTRE71R3NK20110228

BBC News reports:

UK public sector borrowing in June was almost twice as much as a year ago, after the downturn shrank tax receipts.

Borrowing reached £13bn – a record high for the month of June – compared with £7.5bn in June 2008, the Office for National Statistics (ONS) said.

Total outstanding government debt rose to £799bn, or 56.6% of UK GDP – the highest since records began in 1974.