[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 10 December, 2003, 15:19 GMT
At-a-glance: Pre-Budget report
Chancellor Gordon Brown has delivered his pre-Budget report. Here are his key announcements, as well as the opposition parties' reaction:

Economic growth

  • Growth will be 2.1% in 2003, inside Mr Brown's 2-2.5% forecast

  • Growth targets for 2004-5 will be 3-3.5%

  • Britain has enjoyed its longest period of sustained growth since records began in 1870
  • British inflation has been at its lowest for 30 years and interest rates the lowest since 1955
  • Public spending and borrowing

  • The new borrowing forecast for 2003 is 37bn, up 10bn on Mr Brown's prediction in his April Budget

  • Borrowing in 2004 will be 31bn, up from the 27bn he predicted in April

  • Sustained economic growth made Britain's investment plans affordable
  • Debt in the UK this year and in future years will be well below 40%, meeting one of Mr Brown's "golden rules"
  • The chancellor said he was on course for meeting his "golden rule" of balancing the current Budget and would even have a surplus of 14bn over the economic cycle
  • Alcohol and tobacco

  • An estimated one spirits bottle in every six is evading taxes, so bottles will now be stamped to try to curb abuse

  • Duty on spirits will be frozen for the lifetime of Parliament

    Inflation and monetary policy

  • The Bank of England will switch to using the Harmonised Consumer Price Index, used by the Eurozone, to measure inflation, instead of the Retail Price Index
  • Under the new measurement system, the new inflation target will be set at 2%, but pensions and benefits will remain linked to the old inflation measure
  • Housing

  • Mr Brown says he will consult on a new incentive to encourage "real estate investment trusts" - to counter the shortages of private rented housing highlighted in a new report on Wednesday
  • Enterprise

  • The flat rate VAT schemes will be extended, especially for start up businesses
  • There will be a new framework of incentives for small firms, and tax relief will be enhanced to encourage businesses to invest in North Sea oil exploration
  • Tax credits for research and development will be widened
  • Children

  • The child element of child tax credits will rise by the equivalent of 3.50 a week
  • Over the next five years there will be more than 1,000 children's centres in Britain
  • Employers will be able to give staff a tax-free 50 a week for childcare
  • Jobs

  • The windfall tax reserve, previously used for job creation, will now be used to fund training pilots, in an effort to boost skills
  • Without the New Deal, youth unemployment would be twice as high and unemployed men would be 20% less likely to get a job
  • British unemployment stood at 5% - lower than every one of its competitors
  • Since 1997 inflation has averaged 2.3% and the numbers of jobs created exceeds 1.7m jobs
  • War costs

  • So far 5.5bn has been set aside for the war on terror, with a further 500m for the Iraq conflict this year and 300m extra next year - bringing the total to 6.3bn

    Regions

  • From April 2004, local authorities will receive an additional 406m
  • Some 20,000 civil service jobs will be moved out of London and the South East to give benefits to other regions
  • The government was publishing full employment plans for each region of the country for the first time
  • Pensions

  • Mr Brown is proposing setting the tax-free lump sum at 25% of the value of an individual's pension fund and allowing older workers to draw occupational pensions

  • The National Audit Office will do an independent evaluation before the next Budget of the idea of a single lifetime tax allowance for pension saving

    Sports

  • Pointing at England's Rugby World Cup success, the chancellor promised 80% rates relief for amateur community sports clubs, as well as new exemptions from corporation tax
  • The government will review the Inland Revenue's treatment of football supporters' clubs
  • Environment

  • The Budget will set out measures for the next three years to encourage use of green fuels

    Conservative response

  • Mr Letwin said people would need to look at the small print of Mr Brown's plans, arguing that he had failed to mention a host of problems
  • Families were being warned not to borrow too much on their credit cards, said Mr Letwin: "But you're doing the same on the nation's credit card."

  • The pre-Budget report showed the government was taking 50% more in tax than it was in 1997
  • Mr Brown's tax revenues had not kept pace with his over-optimistic forecasts
  • In the last seven years, Mr Brown has allowed bureaucracy to grow by 60%
  • "There's very little sign that all this spending is delivering improvements on the scale that people want to see," said Mr Letwin
  • He questioned whether Mr Brown was putting his reputation for sound monetary policy at risk by switching his inflation measures as part of a compromise with Tony Blair over the euro
  • Despite being the longest serving chancellor since Lloyd George, Mr Brown had lost 300 manufacturing jobs for every day he had been in the post
  • The chancellor was "the biggest single obstacle to reform in Whitehall"
  • Business was paying now in lost profitability and competitiveness from "your suffocating blanket of stealth tax and red tape"
  • Liberal Democrat response

  • Lib Dem Treasury spokesman Vincent Cable accused the chancellor of adding "a long stream of complex new tax gimmicks" to an already over-complicated tax system

  • Experts believed there was a 50-50 chance that Mr Brown would break his "golden rule" on borrowing over the economic cycle

  • Dr Cable urged Mr Brown to acknowledge that spiralling consumer debt could lead to an economic downturn
  • "Why is it unfair and damaging to the economy to have a 50% tax rate on earnings over 100,000?" asked Dr Cable, pointing to the contrast against the effect of top-up fees on graduate teachers



  • RELATED INTERNET LINKS:
    The BBC is not responsible for the content of external internet sites


    PRODUCTS AND SERVICES

    News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
    UK | Business | Entertainment | Science/Nature | Technology | Health
    Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
    Americas Africa Europe Middle East South Asia Asia Pacific