Budget 2006 Coverage – The Chancellor’s Speech Live

Chancellor of the Exchequer, Gordon Brown, stood up at 12:34pm to reveal his tax and spending plans for the next year. Key points of the 2006 Budget are as follows…

Inflation is at 2%, down from 2.5% last quarter. This is on target.

Inflation target met every year since 1997, targets expected to be met going forward.

Economic growth 2-2.5% in 2006.

Interest rates are the lowest for 40 years.

Public sector pay increases on average of 2.25%.

Economic growth is forecast at 2.75% to 3.25% in 2007 and 2.75% to 3.25% in 2008.

Britain is now the second in the G7 in terms of national income per head, behind America at number one.

Chancellor says he will meet his Golden Rule by £16 billion.

Current budget -£11 billion in 05/06, -£7 billion in 06/07 and £1 billion in 07/08.

Borrowing at £37 billion in 05/06, £36 billion in 06/07 and £30 billion in 07/08.

Net debt 36.4% of GDP in 05/06, 37% of GDP in 06/07.

“Medical science and excellence” will be strengthened by a £1 billion budget under a single body, encompassing NHS research.

3,000 extra science posts to be created in schools.

Business investment will grow by 4.5% this year.

Expansion of R&D tax credit.

Trade with China and India expanded.

Review of national insurance and income tax alignment.

170,000 more people in work than one year ago.

New deal will “not be abolished,” but “strengthened.”

Minimum wage to be increased to £5.35 per hour in October.

Doubling of training for women with low skills.

£970 million for shared equity schemes for new home buyers, with a minimum equity share of 25%.

Commitment to reduce emissions in line with climate change levy, which will be increased in line with inflation from 2007.

£20 billion fund for developing economies to invest in alternative sources of energy and more energy efficiency.

New environmental and energy research institute to be set up, making Britain a leader in addressing environmental issues.

Extra home insulation help for pensioners.

From tomorrow a zero rate on duty for cars with the lowest emissions.

Vehicle excise duty of £210 on the newest gas guzzling cars.

Fuel duty frozen until September 2006.

Income tax allowances to rise in line with inflation.

Child element of child tax benefit increased by 14% over the next three years.

Child Trust Funds to include £250 and £500 payments at age seven.

Tax Free Childcare voucher rise from £50 to £55 per week.

Cigarettes up 9p per packet from tomorrow. Duty frozen on whiskey and spirits. Wine to rise by 4p from Sunday. Beer to rise by 1p.

“In anticipation of English success in the World Cup,” duty to be frozen on champagne and British sparkling wine. Duty also frozen on cider.

Exemption on Stamp duty raised to £120,000.

Inheritance tax threshold raised from £275,000 to £325,000 over the next four years.

New charitable fund of £1 million to be established for British victims of terrorism at home and abroad.

£800 million extra for armed forces in Iraq and Afghanistan.

Sports training and facilities to benefit from an extra £200 million of public money, as well as £100 million through sponsorship and £300 million from the National Lottery.

Annual national ‘Olympic’ competitions to be funded in order to encourage schoolchildren to take up sport.

£34 million for new National Sports Foundation, launching next week.

£150 million budget for gap year and youth volunteering scheme.

Government asset sales of £30 billion by 2010, including the sale of radio spectrum.

Average investment per pupil in state sector to rise to private level.

£34 billion new investment in schools over the next five years.

By April next year the number of community support officers is to be doubled to 16,000.

Free local bus travel for pensioners and the disabled. Free national off peak bus travel also to be introduced.

The chancellor sat down at 1:35.