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EDITIONS
Thursday, 14 November, 2002, 12:01 GMT
Pre-Budget report date set
Gordon Brown
Chancellor Gordon Brown is to deliever his pre-Budget report on Wednesday 27 November.

Mr Brown will outline his latest predictions for the UK economy and also a range of measures he is thinking of including in next year's Budget.

These may include further tax or national insurance changes - with pressure as well for action to halt runaway house prices and continuing pension problems.

Gordon Brown
Will Chancellor tackle housing and pension crisis
Mr Brown is believed to be considering an increase in stamp duty to stop housing speculation, and a cut in the tax relief given to higher rate taxpayers for their pensions.

But he may sweeten the pill with new tax-free baby bonds for all parents, and a loosening of the rules governing pension annuities, which have been falling in value.

Redistribution by stealth

Mr Brown will be under pressure not to alienate the middle class swing voters who have backed new Labour since 1997.

His tax changes since 1997, and especially his new 1% National Insurance levy that comes into effect on 1 April, has led to big increases in the tax burden at the higher end of the income scale, while his tax credits have helped those at the bottom.

And rising incomes have dragged many more people into the top rate of tax, which now starts at just one and a half times average earnings.

Although Mr Brown may want to raise stamp duty further, at 3% for houses over 250,000, and 4% for houses over 500,000, it is already having an effect on the middle class in London.

A BBC survey for Radio 5 Live predicts that within 10 years one in four people everywhere in the country will be in the higher rate bands for stamp duty, and many more will also face paying inheritance tax for the first time.

However, the government also has another way to help deal with the housing problem - changes in the planning system to make it easier to build new houses.

A Green Paper on pension reform is expected to be announced about the same time as the Pre-Budget Report, but it is unlikely to contain radical measures.

Instead, the government will want to try and reach a consensus with industry and the unions about the best way forward.

The unions, meanwhile, want compulsory occupational pensions with contributions of at least 10% from both employers and employees.

The government is thought to want to encourage cheaper private pensions and higher savings through tax incentives.

See also:

15 Jul 02 | Politics
10 Nov 02 | Business
15 Jul 02 | Business
15 Jul 02 | Business
06 Nov 02 | Business

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