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Last Updated: Monday, 5 December 2005, 18:12 GMT
At a glance: Pre-Budget report
All the main points from Chancellor Gordon Brown's pre-Budget report on Monday, 5 December, 2005:

Economy

  • This was the "toughest and most challenging year" for the British economy, but recession had been avoided.

  • Growth this year would be 1.75% - despite Mr Brown's predictions earlier this year that it should be nearer 3-3.5%.

  • Forecast growth would be 2-2.5% in 2006 and 2.75-3.25% in 2007 and 2008.

  • Britain was on course to meet its inflation target of 2%.

    Fuel duties

  • Supplementary North Sea charge on energy companies will be increased from 10% to 20%.

  • Petrol and road fuel taxes will be frozen for the whole of this financial year.

  • Capital allowances for the production of the most environmentally friendly bio-fuels will be enhanced.

  • There will be a new partnership with Norway for incentives to speed up this technology. Britain will become a leader in clean coal and carbon abatement policies.

  • Ofgem will use its powers to intervene where necessary to ensure that gas importers either use or lose their capacity to import gas as Britain faces forecasts of a cold winter.

  • The winter fuel allowance for pensioners will continue for every year in this Parliament and be worth 300 for over 80s.

  • The government's "warm front" programme will offer free installation of central heating to old people on pensioner credit. All other pensioners will receive 300 towards the cost of installing central heating.

    Education and employment

  • Employment was now 28.8m - the highest in the country's history.

  • Wages should rise for NHS workers on the assumption that inflation was 2%. The total wages bill in education will rise 2.8%.

  • In eight areas of the country, teenagers currently getting no training will be offered training agreements - "a training wage in return for gaining skills".

    Housing

  • Deputy Prime Minister John Prescott will be asking local authorities to bring forward more brownfield areas for development.

  • There will be new real estate investment trusts to increase funding for new property developments.

  • Three of the biggest building societies and banks have joined the government to offer shared equity schemes to help first time buyers get on the property ladder.

  • The first 4.7bn of efficiency savings identified by the Gershon Report into ways to cut wasteful public spending have now been made.

    Business and investment

  • Small businesses will be able to take advantage of more flexible VAT payments. A new film tax credit will be worth 16% to big budget productions and 20% to smaller films.

  • Mr Brown said he would be asking European finance ministers to set up competitiveness tests for new and existing EU regulations.

    Security and counter-terrorism

  • An extra 135m for national security and 580m for the armed forces and their work in Iraq and Afghanistan.

    Children and young people

  • Rules on paying out child tax credits will be over hauled to make them more flexible and take more account of changes in people's income.

  • Unclaimed assets in bank accounts will be used to invest in youth and community facilities. There will be a new community youth service to help fund gap year students doing voluntary work in the UK.

  • Each local authority will receive half a million pounds over the next two years to fund activities for young people.

    Conservatives' response

  • Shadow chancellor George Osborne said the report showed Britain's deficit was up to 10bn and Mr Brown was borrowing 151bn over the next five years.

  • He said Mr Brown's golden rule was tarnished and he was "discredited". "Business investment has collapsed."

  • Mr Brown had "single handedly destroyed" public finances and "devastated" pensions savings.

  • The British economy was growing slower than 18 of the 25 members of the EU.

  • The chancellor talked about the great challenge Britain faced from the emerging economies of China and India, yet his policies were now "holding Britain back".

  • He accused Mr Brown of being the "biggest roadblock to reform" of education, health, welfare reform and pensions.

  • The chancellor had "sabotaged" Lord Turner's report on pensions and "destroyed" savings through means-testing.

  • He had been "forced into the humiliation of admitting he got it wrong". He was "past his sell-by date" and was "holding Britain back".

    Brown's rebuttal

  • Under Labour Britain had experienced the longest period of sustained growth, the lowest inflation, and lowest interest rates in 30 years, plus the highest employment rates.

  • Business investment in 1997 was 87bn - it is now 110bn.

  • He accused the Tories of wanting to abolish the New Deal and cut child tax credit.

    Liberal Democrats' response

  • Vincent Cable, the Lib Dems treasury spokesman, asked why private investment in the economy was half what the chancellor had forecast in the budget.

  • He asked if Mr Brown had put "any kind of financial limit on the prime minister's expressed enthusiasm for nuclear power".

  • He asked Mr Brown why he could not say "I have made mistakes" and had "exaggerated" his projections.

    Brown's rebuttal

    He accused the Lib Dems of continuing to make public spending commitments despite dropping the tax proposals.

    He said Mr Cable needed to stop the "barrage" of public spending commitments made by his colleagues.

    Scottish National Party's response

  • SNP treasury spokesman Stewart Hosie said the announcement on oil would amount to a "25% hike in tax on the North Sea".

  • It could lead to "rapid and irreversible" loss of skilled people and equipment, which could have a knock on effect on jobs.

  • "Are you confident that in the medium and long term, the billion pound cash grab you've made today will not lead to a massive reduction in revenue in the future?" he asked.

    Brown's rebuttal

  • The chancellor said he had given new incentives for smaller oilfields to be developed. Tax rates on new development in other areas of the world were higher than in Britain.

  • "The last people that can complain about taxation in relation to Scotland are the SNP," he said, citing a list of recent spending pledges from the party.

    Democratic Unionist Party's response

  • DUP's Nigel Dodds asked if the measures for heating pensioner homes would also apply to Northern Ireland.

  • Mr Brown said funds had been allocated for Northern Ireland. "I hope that will mean insulation and central heating programmes will go ahead," he said.

    Others

  • Ex-Tory chancellor Kenneth Clarke claimed the chancellor's announcements of "new taxes" on oil and land development were "dangerous".

  • He said oil tax slowed down development of the North Sea gas fields in 2002. Land development tax had never worked in the past and will work against government measures to restore the housing market.

  • The chancellor would have to show it was possible to slow public spending without sacking policemen, doctors and nurses.

    Brown's rebuttal

  • The chancellor said measures on land development were at the stage of being a consultation document and he disagreed with Mr Clarke's analysis of the situation on oil.

  • "Over the last three years, $1.2 trillion has been transferred from consumers to producers because of the escalating price of oil. I think you would be the first if you were chancellor to want to do something about that," he said.


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