Budget 2005 Coverage – The Chancellor’s Speech Live

Chancellor of the Exchequer, Gordon Brown, stood up at 12:32pm to reveal his tax and spending plans for the next year. Key points of the 2005 Budget are as follows…

The Chancellor stated that Britain was enjoying its longest period of sustained economic growth since 1701.

Inflation is 1.6%, expected to rise to 1.75% this year and 2% in 2006, this is within Government targets.

Predictions of a recession are wrong, the chancellor stated, with growth for 2004 at 3.1%, as forecast.

Economic growth has continued for the 50th consecutive quarter. Growth is expected to continue into quarters 51, 52, 53 and 54. 3% to 3.5% economic growth is predicted this year, more than twice that of Britain’s European competitors. The Chancellor stated that there is no sector of the British economy that has not experienced growth.

The key to long term growth was low inflation and low interest rates, Mr Brown said.

Employment is the highest ever, with living standards rising by 3% each year since 1997.

The chancellor also said that, if Britain had French or German levels of unemployment, the nation would have 2m fewer jobs.

Debt interest payments now consume a lower share of net income than ever before. Social security bills for unemployment have halved since 1997, saving £5 billion a year.

75% of new money goes towards investment in hospitals, schools and the public sector.

The chancellor announced that a series of assets and 7,800 civil service jobs will be located out of London.

Chancellor says he will meet his Golden Rule on sustainable investment by £6 billion.

Debt was, at all times, at 40% below the level of national income, Mr Brown said.

Defence spending will increase by an extra £400 million.

Mr Brown said he would remove unnecessary barriers to profitable enterprise.

The Chancellor recommends more “light touch” regulations on businesses.

There will now be nine regulatory bodies to cover consumer and trading standards, rather than the previous 35.

Mr Brown said there would be 1 million less inspections each year for companies with a good record, with tougher penalties for those repeatedly infringing rules.

Britain will create a national network for stem cell research, making Britain the “premier location for tracking disease and developing treatments to cure them.”

Creative industries now represent 8% of the national income.

Tax relief will be applicable to short and long film makers.

27 million is to be set aside for a new national sports foundation.

Capital gains tax, corporation tax, and air passenger duty will be frozen.

There will be a 7p rise on cigarettes from 6pm tonight.

Rises of 1p on beer, 4p on a bottle of wine. Freezes for spirits, cider and sparkling wine.

There will be a permanent memorial to the Queen Mother on the Mall, funded by a “new coin”.

The chancellor said that servicemen and women injured in the line of duty will qualify for new compensation, and would not be taxed if they choose to stay in the armed forces.

Vehicle excise duty frozen for green cars.

Stamp duty threshold to double to £120,000.

Inheritance Tax threshold rising to £300,000 over 3 years meaning that 95% of estates will not be taxed.

Tax breaks for ISAs extended to 2010.

Income tax allowances to rise in line with inflation.

Child Tax Credit to rise by 13% over the next three years in line with earnings.

“It is right to choose the prudent course for Britain” the Chancellor said, unveiling a “modest fiscal tightening.”

In 2007/8 expenditure on transport will rise by £2.4 billion, Police by £3.5 billion, Defence by £3.7 billion, Education by £12 billion and Health £23 billion.

The chancellor said he wanted every child to have the “best possible start in life,” providing help for early learning in every area, with VAT rebates on local council children’s services.

£9.4 billion investment in primary schools, with 8,900 being rebuilt or refurbished.

The 3 year plan for investing in IT will be increased to £1.67 billion.

The Chancellor announced that those in full time education would be offered £75 per week, stating that children should be in education from three to 18 years.

£1.5 billion to renovate further education centres.

£100,000 will be made in direct payments to primary schools over the next three years.

The Chancellor permanently abolished hospital charges in the NHS.

There will be £200 more for pensioner homes in council tax refunds.

There will be free local bus travel for every pensioner from next year.

The Chancellor sat down at 13:21.

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