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Budget 2001 Wednesday, 7 March, 2001, 21:49 GMT
Brown's 'families first' Budget
Chancellor Gordon Brown has delivered a "families first" Budget which Labour hopes will win the party a second term in office at the general election expected in May.

Mr Brown unveiled a string of measures which he said would boost living standards and give children a better start in life.

Key points
Extension of 10p tax bracket
Paternity leave introduced
Child and Working Families Tax Credit boosted
Freeze on wine, beer and spirits duty
Cigarettes up 6p a pack
Betting duty scrapped
He announced a pre-election tax-cut giveaway of 1bn, with 25 million people benefiting from an extension of the 10p tax band to cover the first 1,880 of earnings, along with a further 1bn targeted to families with children.

Conservative leader William Hague attacked the Budget, telling Mr Brown: "You are like the thief who steals someone's car and comes back the next day to return the hubcaps.

"That is the story of your five Budgets."

Liberal Democrat leader Charles Kennedy said Mr Brown was simply "up to his old tricks" of re-announcing previously announced spending.

'Investment in children'

The government's greatest long-term investment was in children, Mr Brown declared, with a Budget putting families first "after 100 years of neglect".

You are like the thief who steals someone's car and comes back the next day to return the hubcaps

William Hague
Among the "family-friendly" measures announced was an increase in maternity pay from 60 to 100 a week by 2003, as well as extending the length it can be claimed from 18 to 26 weeks.

For fathers, two weeks' paid paternity leave was introduced at the same rate.

The child tax credit, which replaced the married couple's allowance, will be boosted from 8.50 to 10 a week.

Cheer for drinkers and smokers

Drinkers, smokers and gamblers also received some cheer as duty on spirits, beer and wine was frozen, while that on cigarettes was increased by just 6p - in line with inflation.

Families and children first in Brown's Budget
Mr Brown also confirmed pre-Budget leaks that betting duty was being abolished, to be replaced with a bookmakers profits tax of 15%.

The chancellor also unveiled 650m new cash next year for health and education, plus 100m for fighting crime.

Mr Brown said that under Labour, Britain was now well placed to reach a position of "prosperity for all in the years to come".

He said that by balancing long-term investment and affordable tax cuts, the government would meet the needs of not just some but all of Britain's families.

Under Labour, Britain now enjoyed the lowest inflation for 30 years, the lowest interest rates for 35 years, more people in work than ever before and the lowest level of unemployment since 1975.

Massive surplus

Mr Brown confirmed that there would be a sizeable Budget surplus this year - 16.4bn instead of the 10bn he forecast last November.

He also said that the government would this year repay a record-level 34bn of national debt - more than the total repayment put together by all UK governments in the last 50 years.

Despite the slowdown in the world economy, he forecast growth to be between 2.25 and 2.75% in 2001.

Smokers' cheer: Only a 6p rise
Inflation is forecast to be 2.25% this time next year, on target to be 2.5% - Mr Brown's target - by the end of next year.

The chancellor also introduced a series of measures aimed at helping business and encouraging enterprise.

He said that he would consult on the modernisation of corporation tax and extending tax breaks on research and development to larger firms.

Childcare help

Mr Brown also announced a cut in the long-term capital gains tax rate for all employees to 10p from 40p, aimed at encouraging wider employee share ownership.

We will tell people how much they will pay in tax and what their money is being spent on - so there will be no stealth taxes with the Liberal Democrats

Charles Kennedy
And he confirmed that stamp duty would be axed for certain areas to aid regeneration.

In further measures for families, as expected Mr Brown announced a 5 a week hike in the Working Families Tax Credit from June.

He also signalled that there would be further help for working families with the costs of childcare.

Motorists were not left out of Mr Brown's pre-Budget bonanza, as he confirmed the 2bn previously signalled in last autumn's pre-Budget report.

All car tax rates were frozen again and the cheaper 55 rate for smaller cars was extended to an extra 5 million cars, backdated to November.

The chancellor also confirmed cuts in vehicle tax rates for hauliers and the scraping of the tax on tractors.

'Up to his old tricks'

Liberal Democrat leader Charles Kennedy said Mr Brown was "up to his old tricks" of trying to re-announce previously announced spending.

"After all the hype Labour will have spent less, after this Budget, than the Conservatives as a proportion of GDP on hospitals, schools and pensions," he said.

Only the Lib Dems, Mr Kennedy said, would invest significantly more in public services.

The BBC's Mark Mardell
"It was a balancing act aimed at voters who want a little bit of everything"
Leader of the opposition William Hague
"All is not what it seems"
Chancellor Gordon Brown
"Our country now has the lowest inflation for 30 years"
Shadow Chancellor Michael Portillo
"The surplus he had today, it was not Gordon's surplus, it was the people's surplus"
The BBC's John Pienaar
"He had billions in his back pocket and could afford to lavish gifts on anyone he wanted"

Key stories

Spending and saving




See also:

07 Mar 01 | Budget 2001
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