Budget 2004 Coverage – The Chancellor’s Speech Live

Chancellor of the Exchequer, Gordon Brown, stood up at 12:22pm to reveal his tax and spending plans for the next year. Key points of the 2004 Budget are as follows…

Mr Brown said since 1997 Britain has sustained growth through two economic cycles without suffering the “all British disease of stop go”.

Britain has enjoyed the longest period of sustained economic growth for 200 years.

Mr Brown said the purpose of his Budget statement was to lock in the economic stability “that can and will endure”.

Britain has met his forecast economic growth target of 2.3%.

Growth in 2004 will be 2.7% in Europe, 2.8% in Japan and is expected to be between 3% and 3.5% this year in Britain.

Mr Brown said imports and exports are expected to grow by more than 5%.

2004 inflation will be 1.75%.

Economic growth forecast for 2005 remains at 2.5% to 3%

On housing, Mr Brown said the Government accepted the recommendations by economist, Kate Barker, in relation to the rented sector.

Mr Brown said it “must be in the interests of the whole country” for the environment to be safeguarded, there to be more affordable housing and low interest rates

The Treasury is to review progress towards the Euro Tests in 2004.

Growth forecast for 2005 is 3%-3.5% and 2.5%-3% in 2006.

2003-2004 net borrowing will be £37.5 billion.

2004-2005 net borrowing will fall to £33 billion

Debt this year is 33% of national income and should be kept below 40% of national income.

Unemployment is costing the UK £3 billion a year less than in 1997.

Stamp duty and inheritance tax will be frozen.

Corporation tax, air passenger duty, insurance premium tax, vehicle excise duty and capital gains tax will remain unchanged.

20,000 public service jobs will be relocated outside of London.

From 1 April, firms with turnovers under £58,000 will not have to register for VAT and 13,000 companies will qualify for simplified VAT accounting. This will include a new tax on small company dividends.

Tax relief for film makers will be set at 20%.

The annual rise in sulphur-free fuel duty will be delayed for six months. From 1 September, fuel companies will begin to move to more environmentally friendly fuels.

Beer will rise by 1p per pint. Wine will rise by 4p per bottle, duty on cider and sparkling wine will be frozen. Duty on spirits will also be frozen until the next election.

Cigarettes will rise in price by 8p per packet.

The Chancellor said the cap on pension pots is set at £1.5 million.

Department of Work and Pensions budget down by 5% by 2008.

Customs and Excise is to merge with the Inland Revenue to reduce complications for businesses. 14,000 jobs will be cut across both departments.

2006-2007 public spending to rise 2.5%.

2007-2008 public spending to rise 2.5%

Mr Brown said he proposed real terms increases in defence spending.

The Chancellor announced a New Deal for Skills which will guarantee every adult an opportunity to gain Level 2 skills.

Up to 1,000 more specialist schools planned.

Education spending is to rise to £8.1 billion by 2008. By 2015 every secondary school can be refurbished or rebuilt with world class technology.

Spending on early education is to rise to £669 million by 2008.

An extra £100 on winter fuel payments for each pensioner household.

The Chancellor sat down at 1:26pm.

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