The Chancellor of the Exchequer announced many things in his budget,
the best of which an extra £3500m to be spent on schools and the health
service in his maiden budget speech yesterday.
No chnage to basic rate or top rate of income tax,but rises in the cost of motoring, smoking and drinking.
Extra cash for NHS and schools from the windfall tax and reserves.
Windfall tax on privatised utilities ought to raise £4.8bn, will be used to
fund the USA lookalike welfare-to-work programme for the long-term unemployed.
The Chancellor said the measures would bring "stability, investment,
employment and opportunity for all" and "advanced the long-term interests of
the many".
main points of the Budget are :
TAX
No changes to basic or top rate. 10p rate of income tax "as soon as prudent".
Corporation tax cut by 2% to 31% - to apply from April 1997. Corporation tax
for small firms cut from 23% to 21% backdated to April. Tax credits paid to
pension funds and companies abolished immediately.
Charities to have special provision.
WINDFALL TAX
Tax to raise £4.8 billion.
Utilities to be able to pay windfall tax in two instalments -- December 1 this
year and December 1 1998.
WELFARE
New welfare state to be created for the 21st Century
From next year people aged 18 to 25 unemployed for more than six months will be
given step on jobs ladders in measures to be announced today. Benefits will be
cut if opportunities are not taken.
£75 a week subsidy to firms to employ long-term jobless.
£3.5 billion for Welfare to Work.
£200 million from windfall tax to help support lone parents.
Lone parents to be offered job search aid after their children are at school.
Help for single parents on benefits with child care costs. Lottery money for
after school clubs.
£200 million help for training the disabled.
£5 million from Welfare to Work budget to start up University for Industry.
MOTORING
Road fuel tax to increase - 4p a litre on all fuels from 6pm yesterday
evening.
Car tax rises in line with inflation from November 17 - up to £150 a year.
To reduce pollution, cut in vehicle tax for green lorries.
TOBACCO
19p on packet of 20 cigarettes from December 1.
ALCOHOL
Duty to rise in line with inflation. From January 1998, bottle of
spirits up 19p, pint of beer by 1p, bottle of table wine 4p, higher strength
alcohol 1p.
HEATING AND LIGHTING
VAT cut on fuel and power from 8% to 5% from September.
Gas levy reduced to zero from April 1998, cutting gas bills by 2% on average.
With other measures, next year's fuel bills to fall by £90 compared with last
year's.
HEALTH
NHS spending up 2.25% over the next year. Tax relief on health insurance
for over 60s abolished. New hospital building programme to be announced soon.
Extra £1.2 billion to go to NHS during 1998-99.
Insurance companies to pay for treatment of road accident victims.
HOUSING
Mortgage tax relief to fall from 15% to 10% from April 1998.
Stamp duty up immediately by 1% to 1.5% on property sales above £250,000 and to
2% for sales over £500,000.
EDUCATION
Extra £2.3 billion - including £1.3 billion over the course of the
parliament from Windfall Tax to be used for investment in schools - £150 for
every pupil.
