Budget: Osborne's 'tough' package puts VAT up to 20%

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VAT is to rise from 17.5% to 20% in January after George Osborne unveiled the biggest package of tax increases and spending cuts in a generation.

He said his "tough but fair" Budget was "unavoidable" although he told MPs in the Commons there would be no extra tax on alcohol, tobacco and fuel.

Child benefit will be frozen for three years, public sector pay frozen and 25% cut from government department budgets.

Labour said the Budget was "reckless" and would "throw people out of work".

James Landale reports.

READ MORE: Osborne increases VAT rate to 20%

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