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 You are in: Special Report: 1998: 11/98: Pre-Budget Speech  
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EDITIONS
Pre-Budget Speech Tuesday, 3 November, 1998, 22:39 GMT
What the chancellor announced
Gordon Brown
Chancellor of the Exchequer Gordon Brown's pre-Budget spending report included the following announcements:

Economic forecasts

  • Inflation forecast to stay on target at 2.5% in coming years

  • Support reaffirmed for Bank of England's independence as being in long term interests on the country

  • Spending this year to be 2bn less than planned - current budget expected to be 5.5bn in surplus

  • 1.5bn debt to be repaid this year, 4bn net borrowing next year and 5bn in following year

  • Golden rule being achieved - no borrowing to pay for current spending over the cycle

  • UK economy expected to grow by 1-1.5% in 1999, 2.25-2.75% in 2000 and 2.75%-3.25% in 2001

  • Current budget surplus of 33bn forecast over the next five years

  • Public investment to double

  • Public sector debt set to fall to 39% next year, 38% the year after and 36.5% the following year - well within Maastricht criteria for joining European Monetary Union if the UK decides to do so

Helping business

  • 250m investment in new traineeship scheme

  • Business to take world of work and business into classrooms - tax relief for secondment of staff

  • Long-term commitment of employees to be rewarded - double number of firms to offer employees the chance to own shares in company

  • Small businesses - temporary investment allowance to become permanent tax break

  • Inland Revenue and Contributions Agency to be merged - will offer one-stop advice service for small businesses

  • Examining changes to planning permission laws - cited by business as bar to productivity

  • Banks to look at ways of better serving needs of business (review by Don Cruickshank, previously of Oftel)

  • Tax credit to be discussed for research and development among businesses

  • Eight new institutes of enterprise to be created in British universities to encourage scientific research

  • New incentives to be considered for venture capital investment

  • 50 reduction being considered in road licence tax for smallest and most efficient cars

Making work pay

  • New Deal to be extended - 60,000 extra posts to be created

  • From April employers will start to pay national insurance from 83

  • Minimum family income guarantee be raised to 190 from October 1999

  • Extra help for childcare - childcare tax credit to be extended to 14 year olds

  • Disabled person's tax credit to be raised

  • Pensioner couples to be guaranteed a minimum weekly income of 117

Extra cash

  • New investment in schools, 25 hospitals totalling 11bn over three years

  • Extra 250m announced for National Health Service for winter

  • Previously announced extra investment of 40bn for health and education guaranteed
Links to more Pre-Budget Speech stories are at the foot of the page.


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