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Budget 2001 Wednesday, 7 March, 2001, 18:42 GMT
Budget 2001: At-a-glance
The main points of Chancellor Gordon Brown's 2001 Budget:


  • Maternity pay will be increased from 60 to 75 next year and then up to 100 in 2003.

  • From June the child care tax credit will pay up to 70% of child care costs - instead of 100 per week as at the moment.

  • Statutory obligation to maternity pay will be raised from 18 weeks to 26 weeks.

  • Two weeks' paid paternity leave to be introduced.

  • Children's tax credit be paid at 10 per week.

  • Families receiving the higher children's credit and maternity pay will be up to 2,240 a year better off.

  • All lone parents on income support required to have regular interviews from 2002.

    Pensions and benefits

  • Winter allowance, the Christmas bonus and free TV licence for the over 75s will be retained.

  • Seven and a half million pensioners will now pay no tax or tax at the 10% rate.

  • Pension credit will be linked not just to prices but to earnings every year and pensioners' tax allowances will be linked to earnings from 2003.

  • 40m help for the 30,000 benefit claimants who have been drug addicts.


  • First 1,880 earned will be taxed at 10%.

  • Six pence increase on a pack of 20 cigarettes.

  • Duty frozen on wine, beer and whisky.

  • Threshold for inheritance tax raised to 242,000.

  • For the next five years up to 7,000 a year of savings can generate income and capital gains that will be tax free.

  • 100% tax relief for investment in environmental technology.

  • Minimum wage to be increased to 4.10 per hour from 3.70.

    Vehicle and fuel duty

  • Petrol tax cut by 2p per litre for unleaded petrol until June.

  • Duty on ultra low sulphur diesel to be cut by 3p.

  • Lead replacement petrol will be cut by 2p a litre.

  • All fuel duty changes to be in place by 1800 GMT on Wednesday.

  • Landfill tax up to 12 per tonne from 11.

  • Duty on road fuel gases will be frozen until 2004.

  • Vehicle excise duty abolished for all tractors.

  • 70% all newly purchased cars will get a reduced licence fee - applies to engines under 1.5 litres.


  • Consultation on a simplified VAT regime for firms with a turnover of up to 600,000.

  • Proposal to introduce a lower VAT rate for firms with turnover from 54,000 to 100,000.

  • VAT threshold raised to 54,000 for small businesses.

  • Annual company accounts will become basis for calculating tax.

  • Capital gains rate for employees in all types of companies cut to 10p from 40p.

  • Move to allow pension funds to invest in venture capital.

  • Ensure there is a clearer duty on pension fund managers to promote the interests of beneficiaries.

  • Extension of the enterprise management incentive scheme so all employees can benefit from share options in the qualifying companies.

  • Modernisation of the corporation tax system to meet the needs of a more knowledge based economy.

  • The government will launch a consultation on the best way to extend a research and development tax credit to larger companies.

  • New tax credit in a bid to accelerate research on diseases like Aids and Malaria.

    Education and health

  • In total 1bn to hospitals and 1bn to schools over three years.

  • New 200m fund for extra teachers.

  • Education spending set to rise by 5.2% a year after inflation.

  • Headteachers of every primary school will receive 13,000 with larger schools receiving 63,000.

  • Headteachers of every secondary school will receive for the smaller schools 68,000 and larger schools 115,000.

  • 135m fund for recruitment of front line staff for the NHS.

  • Between 500,000 and 1m for acute hospital trusts.

    Inner city regeneration

  • 1bn package to speed up regeneration.

  • New community investment tax credit.

  • 100% capital allowances to renovate empty flats over shops.

  • Stamp duty abolished in designated areas to bring disused properties back into use.

  • Regional development agencies to get new financial flexibility.

  • 150% tax relief for cleaning up contaminated land.

    Other changes

  • Guaranteed minimum income for severely disabled people on benefit of 142 a week.

  • 4bn extra will be made available for the government's priorities each year.

  • 200m to fight war on drugs.

  • VAT change to ensure free entrance to museums.

  • Film industry tax incentive will be extended to 2005 at a cost of 50m next year.

  • VAT reduction on church repairs from 17% to 5%.

    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




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