Pre-Budget 2008: The bare bones
No comment, no analysis: just the basic policies of today’s Pre-Budget Report.
Economic forecasts
UK economy to contract by between 0.75 and 1.25 per cent in 2009
Inflation to fall sharply to one per cent next year
UK economy grow by between 1.5 and two per cent in 2010 and continue to recover
Borrowing
Government to borrow £78 billion this year and £118 billion in 2009
By 2010 borrowing will fall to £105 billion, followed by £85 billion, £70 billion and £54 billion
By 2015/16 borrowing only to invest
Borrowing represents 2.8 per cent of GDP this year and 4.4 per cent next year
Government debt 57 per cent by 2013/14
Efficiency savings
£5 billion extra to £35 billion
Capital spending
£3 billion brought forward from 2010 to increase spending on transport, housing and education
VAT
VAT cut from 17.5 per cent to 15 per cent from December 1st for 13 months
10p tax
Moves to compensate losers from 10p tax fiasco now permanent
National Insurance
Contributions to rise 0.5 per cent
Starting point to rise to that of income tax
High earners tax
From April 2010 45 per cent income tax on people earning £150,000
Tax relief ceiling still in place
VAT
Cut will not apply to fuel, tobacco or alcohol
Business
Introduce exemption for foreign dividend for large and medium companies
Increase in threshold for empty property relief to small businesses
Government funded banks to maintain loans at 2007 levels
Increase in corporation tax to be deferred
Tax repayment scheme for unprofitable companies to be extended
New finance scheme for small businesses
Environment
European emissions trading scheme to now include aviation
Air passenger duty to be reformed
£100 million to help insulate homes
Ofgem to regulate price gap in household bills – government to step in if gas does not narrow
£530 million investment in energy efficiency and environmental protection
Housing
New body to monitor lending
Lenders to wait three months after entering arrears before repossession
£15 million for free debt advice
Upper limit for help for unemployed home owners up to £200,000
Mortgage rescue scheme extended to second mortgages
£774 million investment in homes and regeneration to be brought forward for 2008/09
Unemployment
Support in workplace will include redundancy and increase in training for those made redundant
New initiative to fill vacancies: national employment partnership to employ two million people with biggest companies
Additional funding for Jobcentre Plus
£1 billion in reserve to help in difficult times
Transport
Differential first year rates for new cars
2009 duty up by £5
2010 differential increase introduced
Children
50p added for every £1 in saving gateway for low income housing by 2010
Child tax increases implemented together
Child benefit up to £20 as part of child poverty bill
Benefits start in January
£70 benefit for disable children
Pensioners
Pension credit increase from £124 to £132
State pension increase in line with inflation
One-off payment of £60 for single pensions and £120 for couples in January on top of £10 gift
