Budgetline
The Chancellor stood up at 3.31pm.
The Chancellor predicted 2.75% economic growth for this year and 3% growth next year. Inflation should remain under control, reaching its target of under 2.5% by the end of next year.
Public Sector Borrowing Requirements- PSBR £29 billion for this year(1995/96) £7bn less than last year, £16 billion less than previous year.
More money for police, schools, hospitals; public spending on National Health will increase by over £1bn next year. Reductions in NHS management costs will be spent on patient care. £700m from private finance over next 3 years.
Spending on schools –an increase of £878m. Of this, over £770m will be channelled through local authorities
Crime – extra 5,000 police over next 3 years.
Civil Service reforms- £860m lower spending for Whitehall in three years than today, or 12% in real terms.
Social Security spending up by 1% in 3 years. Campaign against fraud; seekers of asylum will cease to receive benefit after unsuccessful hearings.
Increase in Child Care Allowance from £40 to £60 per week. Amount of housing benefit to singles under 25 will be restricted.
Reduction in Social Security spending, £5bn by 2000.
Private Finance Initiative is spending £2bn per year – £14bn of Private Finance contracts by 1998/99.
“Challenge Funding” for local services extended.
Overall public spending forecasts, 42% of GDP 1995/6 1997-1998 onwards, ratio will be below 40%.
Latest projections for public borrowing means can start to cut taxes.
Tax Tax cuts equivalent to spending reductions; PSBR will continue to fall from £29bn now to £22.5bn 1996/7, and £15bn 1997/8. Zero by 1999/2000. Has shifted away from direct towards indirect taxes, on spending and consumption.
INDIRECT TAX –
Fuel will raise road fuels by 5% in real terms, by 3.5p per litre from 6pm tonight. Super unleaded petrol up by 4p from next May.
Car Road Tax will go up by £5, lorries still frozen. All cars over 25 years old exempt from road tax. National Lottery has affected other gambling industries; cut in general betting duty by 1% by next March. Pools Betting Duty cut by 5% by December.
From 6pm, cigarette tax will go up 15p, cigars 6p, pipe tobacco 8p.
Alcohol – affected by Europe; our duty levels higher. Concerns of industry so freezes duty on beer and wine.
Other duty rates; very strong cider, up by 8p per pint from next October (not ordinary ciders).
Spirits duty reduced by 4% from tonight, 27p off bottle of whisky (as he took a swig).
Utilities – No windfall tax.
Tax law will be simplified and rewritten.
MIRAS will remain unchanged.
DIRECT TAXATION:
Benefits from long-term care insurance will be exempt from tax. From April lower threshold limit up from £3000 to £1000; upper threshold asset limit doubled to £16,000 for people in care.
Pension bonds qualifying age reduced from 65 to 60.
Employee share ownership to be encouraged; share schemes will be improved. Hopes it will become norm for all employees. Wants Britain to be “enterprise centre for Europe.”
Business rates increases capped down from 10% to 7.5%; small businesses to 5%.
Will abolish Inheritance Tax when possible. Threshold up to £200,000 from £154,000. Capital Gains Tax relief extended.
Income Tax: Allowances for married couples up by £70. Basic personal allowance increased by £240. Higher rate threshold raised by £1,200. Will increase 20% band by further £700; will bring extra 1 million people into that band. Will reduce rate of tax on all savings income for basic rate taxpayers to 20%. Small companies Corporation Tax rate cut to 24%. Basic rate of income tax down by 1p to 24p.
He sat down at 4:39pm.