Thursday, 13 March 2008

UK 2008 Budget Highlight

Gross domestic product growth on target at 2.5 per cent in the last quarter. Economic growth forecast unchanged at 2 to 2.5 per cent this year and 2.75 to 3.25 per cent in 2007 and 2008. Exports to rise by 5 to 5.5 per cent this year.
Public finances
Current account deficit to fall from £11bn this year to £7bn next, followed by surpluses of £1bn, £7bn, £10bn and £12bn in following years. Public investment to be £26bn this year and rising in the years ahead to £29bn, £31bn, £32bn, £34bn and £36bn.
Inflation
UK inflation at 2 per cent and on target.
Public debt
New remit for Debt Management Office published today. Long-dated bonds to account for nearly two-thirds of total issue this year, up from less than half.
Government statistics
Proposals to be published for the independent statistics board.
Asset sales
Plans for total public asset sales of £30bn by 2010. Government confirms it will sell Westinghouse this year and expects to raise £3bn. It will also sell the Tote and part of its stake in British Energy and related assets.
RESEARCH
Medical research
Budgets to be combined for Medical Research Council and National Health Service research, totalling at least £1bn per year. Proposals to simplify research funding that goes direct to universities, to be refocused on business needs.
EMPLOYMENT
Unemployed and low paid
Unemployment claimant count at 920,000. Review of national insurance and income tax system for lower paid workers. The number of low skilled jobs will fall from 2.1m to 600,000.
Women
New help for working women to close the pay gap with men. Doubled funding for training for low-skilled women as part of measures to bring more than 30,000 lone parents into work.
INCOME TAX
Allowances
Personal income tax allowance rises from £4,895 to £5,035. Child element of child tax credit to rise 14 per cent over three years - worth up to £88 a week by 2009 for two-child family. Children to get an additional £250, or £500 for those in low paid families, in their Child Trust Funds at age seven. Tax-free child care voucher to rise from £50 to £55 a week.
INHERITANCE TAX
Thresholds
Inheritance tax threshold to rise from £275,000 to £325,000 over four years.
PROPERTY
Stamp duty
Stamp duty exemption on property transfers to rise by £5,000 to £125,000. Details published on real estate investment trusts. Measures worth £970m for shared equity to help new homeowners on to housing ladder.
OTHER TAXES
Value added tax
Continued VAT refunds for renovations to churches and monuments.
ALCOHOL
Beer and wine up
Beer duty up by 1p a pint and wine by 4p a bottle from Sunday. Duty on spirits frozen for ninth year in a row. Duty on champagne and sparkling wine to be frozen.
TOBACCO
Rise of 9p a packet
Excise duty on packet of cigarettes to go up by 9p from tomorrow.
MOTORISTS
Emissions
Vehicle excise duty - zero rate for lowest emission cars, £40 (reduced from £75) for new cars with low emissions, up to new £210 band for the highest polluting new cars. Fuel duty to be frozen until September 1. Help worth 35p a litre for vehicles powered by biofuels.
EDUCATION
Science learning
Programme to recruit 3,000 more science teachers. New entitlement to study full range of science subjects at GCSE.
Access and spending
Education to A Level standard to be free for those up to the age of 25. Extra capital investment of £500m to close funding gap between private and public sector education. Public investment in state schools to rise to £8bn a year in the next five years from £5.6bn.
PENSIONERS
Travel
Free off-peak bus travel for pensioners and the disabled anywhere in the country.
DEFENCE
Terror fund
A £1m endowment for fund of families that have been affected by terrorist acts at home and abroad.
BUSINESS
Overview
Business investment will be £113bn this year, expected to grow 4.5 per cent to 5.25 per cent a year in 2007 and 2008. Productivity growth averaging 2.3 per cent in current economic cycle, against 2 per cent in the previous cycle.
Taxation
The size of companies that can claim higher tax credits for research and development to be doubled. Tax credit for creative industries will be expanded. Tax incentives for venture capital to be reduced to 30 per cent relief for investments in venture capital trusts. Corporate tax to remain competitive with international rates. Small companies to get £100m of new money. Scholarships to US business schools.
Trade
UK trade and investment procedures to be overhauled with targets to expand trade with China, India and emerging economies.
POLICING
Community
Extra £100m to more than double the number of community support officers.
ENVIRONMENT
Climate change
Climate change levy to be inflation indexed. Proposals to strengthen and extend the European Union emissions trading scheme will be introduced. Industry consultation on carbon capture technology.
Energy
Energy companies to create energy and environmental research institute, with £1bn finance raised from public and private sector.
CIVIL SERVICE
Spending review
Four key departments have agreed 5 per cent yearly reduction in real terms below 2007-08 baseline.
SPORT & CULTURE
Olympics
About £200m for training facilities for athletes, matched by £100m sponsorship and £300m of Lottery money. Olympic trust fund launched. Initial funding of £34m for new national sports foundation.

Source: Economy Watch

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