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NEWS Wednesday, 10 March, 1999, 23:58 GMT
The Treasury answers your Budget questions
Financial Secretary to the Treasury Barbara Roche answers questions sent in by BBC News Online users.

Q: What measures are the government bringing in to boost e-commerce?

A: E-commerce is absolutely essential to the growth of our economy and that is very strongly recognised by the government and very strongly recognised by both the Treasury and by the Department of Trade and Industry.

The DTI published a competitiveness White Paper which was full of measures as far as e-commerce was concerned.

We do take the point that e-commerce is going to change the way we do business which is why the chancellor devoted quite a considerable part of his Budget to information technology.

Government can also help by giving advice to business - and some of the key things that we need to do are to encourage businesses to file their tax returns electronically and the chancellor outlined an incentive for them to do that.

But more than that what we also want to avoid is a society which is divided between the information haves and the information have nots.

Which is why the chancellor also announced yesterday initiatives to encourage companies to loan computers to their employees and measures to encourage teachers to have computers at home.

So all in all there's a really robust package of measures there.

Q: It is said that car tax for 1100cc cars is to be reduced, however many cars in this bracket are just above this level, i.e. 1108.

Will you be taking this into account when enacting the Budget proposals?

Brian Wilkinson

A: What the chancellor was trying to do there was put together a comprehensive package of proposals on cars.

Clearly the limit has got to be set somewhere but what's interesting about that is that the chancellor's moves have been warmly welcomed by the public transport bodies and the environmental lobby.

Clearly the 100 reduction in vehicle excise duty for the small car is being regarded as a tremendous step forward and has been welcomed as such.

What the chancellor was trying to do was give a well-rounded package as far as the environment was concerned.

Q: What benefit to the country is there in raising stamp duty? Home owners are obviously an easy target for you, but I would like to know if you have any justification for it?

Preventing people from moving is a restriction of labour mobility and is frankly a real demotivator. It is beginning to feel like it's not worth working hard in this country if we are going to get penalised for trying to improve our standard of living.

I was hoping to move at the end of April. I may pull out of the deal now. I simply can't afford to pay the government the extra money.

Andrew Whiteman

A: As far as stamp duty is concerned, 96% of properties in this country will be unaffected and, of course, this government has really delivered to home owners by having low rates of interest on mortgages and, of course, that is the key thing as far as home owners are concerned.

Q: What is the government doing to help pensioners?

A: Basically, there is a package for pensioners which helps them. First there is the five-fold increase in the winter allowance to 100 for every pensioner household and of the course the minimum incomes guarantee and that is going to be upgraded by earnings so that will make a real difference from April 2000.

There is also the minimum tax guarantee for pensioners so that really is going to take numbers of people out of paying tax.

So taken altogether with all the measures we are bringing in, there is a great deal for pensioners in this Budget.

Q: Hello there, I am a disabled person and was watching this afternoon's Budget with close interest.

There were no mentions of any benefit adjustments to help the disabled and I wondered if details had been left in the small print?

Stephen Ralph

A: Everybody is going to benefit from this Budget. Clearly from the measures we have made in cutting the basic rate income tax, but also having the new 10p starting rate is going to help people, particularly those who work on low incomes.

Working families tax credit and the measures there for the people with disabilities who work - they are all going to benefit from that .

As well as all the money, the extra money we have put into health, education and fighting crime - everybody is going benefit from that.

Q: I am a 43 year old higher rate tax payer trying to bring up four children without a partner for the last six years.

My soul is suffering from carrying on working because of life's financial pressures. Why should I go out to work, deprive my children of my attention until 6.30pm each day and be heavily taxed (22,000 income tax last year) and more after this Budget.

Why should I bother working? I should give up and rely on the state.

Paul Broderick

A: This is a Budget for families with children and as far as that's concerned there is the new child tax credit. There is the new increase that has been given to the working families tax credit - on top of what we were introducing in October and also there is the increase in child benefit.

Families with children - this is their Budget.

Q: The Budget arithmetic assumes a rate of GDP growth and inflation well in excess of consensus forecasts.

How much would the PSBR rise if the market consensus proved correct and how would future Budgets address the changed outrun?

Scott Jamieson

A: We've managed to produce the sort of Budget that we have because we have been prudent with public finances. We inherited an appalling record from our predecessors.

Because of our management of the economy, we've got things back on track. We've also been able, with the reforms that we've made, to have fiscal and monetary policy operating in the right direction

And because of our management of public finances we've been able to deliver in the way we have done.

All our projections, all our fiscal projections, are done independently by the National Audit Office. So people can feel confident about them.

Q: Why wasn't the money used to take a penny off income tax spent on health and education?

A: The themes of this Budget are helping families and children and enterprise and work.

What we've been able to do on the basic rate of tax, because of our prudent management of the economy, is a big incentive for people as far as work and enterprise are concerned.

But at the same time we have also been able to put additional money into health and education and also into fighting crime.

Gordon Brown said in his speech, which is quite an important point, that children are 20% of population but they are a 100% of our future and we have put more money into education.

Q: We are a partnership and we each pay the standard rate of income tax on our profits (currently 23%).

I note that small companies with profits of less than 50,000 which includes us can benefit from paying a small company rate of 10%.

It would, therefore, seem appropriate for us to convert from a partnership to a registered company. Is this correct?

K. Benson

A: As far as the government is concerned we see small business as being at the heart of our economy - certainly if we look at the United States we see their economic future being tied to entrepreneurial small businesses.

We know we have a productivity gap between ourselves and the United States of 40% and we want to try and reduce that gap.

That's why we have introduced the new 10p starting rate for corporation tax and we have also introduced a number of other measures to help small businesses such as research and development tax credits, and we have extended capital allowance.

Not only will that help the incorporated it will help the unincorporated as well - and they'll be more on this today when Stephen Byers, the Secretary of State for Trade and Industry speaks.

He will announce support for small business by establishing a small business service - so all these are big measures to help this section of the economy.

And that comes on top of halving the starting rate for small companies which goes down to 20% and the main rate of corporation tax goes down to 30%, which I think is the lowest ever.

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