Gordon's first go - Budget '97

The main points of the Chancellor's first Budget on Wednesday July 2,1997.

Effective in 1997-98 Financial Year

Stamp duty. New rates of stamp duty for property transactions introduced, increasing from 1% to 1.5% for transactions over £250,000 and to 2% for transactions over £500,000.

Tax credits. Advanced Corporation Tax credit to pension funds and companies (other than charities) abolished, effective on all dividends paid from Budget day onwards.

Film industry. A 100% write-off for production and acquisition expenditure incurred after Budget day on British qualifying films costing £15 million or less to make and completed in a period of three years from Budget day.

Windfall tax. Liability of privatised utilities calculated as a proportion of the difference between the value placed on the company at the time of sale and a calculation figure derived from profits in the first four years of trading. First instalment payable on 1 December 1997, yielding £2.6 billion.

VAT on domestic fuel and power. Rate reduced from 8% to 5% from 1 September 1997.

Tax relief on private medical insurance. Relief for the over 60s (received by around 1/3 million people) withdrawn for contracts taken out on or after Budget day.

Anti-avoidance measures. Various tax avoidance measures outlined.

Road fuel duties. All fuel duties increase by 4 pence per litre, effective Budget day.

Vehicle excise duty. Increased by £5 to £150 effective 15 November 1997.

Tobacco duty. Duties to be increased by approximately 5.2% in real terms for cigarettes and 5% for cigars and other smoking tobacco.

Welfare to Work. Schemes to get the young long-term unemployed, lone parents and the disabled back to work outlined, with pilot schemes starting in 1997/8 and going national in 1998.

Effective in 1998-99 Financial Year and beyond

Mortgage interest tax relief. Reduced to 10% from 15%.

Corporation tax. Main rate reduced from 33% to 31%. Small companies rate reduced from 23% to 21%, both effective from 1 April 1998.

Windfall tax. Second instalment payable on 1 December 1998, yielding a further £2.5 billion from the privatised utilities.

Road fuel duties. Last government's commitment to increase duties by 5% in real terms increased to 6% for this and future years.

Tax Credits. Tax credits for shareholders with no tax liability abolished from April 1999.

Tobacco duty. Government committed to increasing duties by at least 5% in real terms (compared to 3% under the last Government).

Health and education spending. Contingency reserve for 1998/99 cut by £2.2 billion (to £ 2.8 billion) to fund extra £1.2 billion NHS spending and extra £1 billion spending for schools.

Help with childcare costs. Increase in the childcare allowance for those on low incomes with two or more children from £60 to £100 a week, as of April 1998.