2008 Budget at-a-glance

2008 Budget at a glance

2008 Budget at a glance

The key measures of the 2008 Budget include:

The economy

– GDP growth: 1.75 – 2.25 per cent in 2008, a cut from the two per cent to 2.5 per cent forecast in the pre-Budget report. Growth for 2009 now predicted at 2.25 per cent to 2.75 per cent in 2009 and 2.5 to three per cent by 2010.
– Government debt: £36 billion, £1.4 billion lower than forecast at time of pre-Budget report.
– Borrowing: Will rise to £43 billion next, some 2.9 per cent of national income. It will then fall to 1.3 per cent by 2012/13, or £23 billion.
– Budget deficit: £18 billion surplus by 2012, forecast to meet the golden rule over economic cycle.
– Sustainable investment rule: To be met, peaking at 39.8 per cent before 2012/13.

Family policy, benefits

– Council tax benefit: Families with one child on lowest income will gain £17 a week, lifting 150,000 out of poverty.
– Child benefit: Up to £20 a week from April 2009, a year earlier than planned.
– Child element of child tax credit: Up £50, meaning family with two children earning up to £28,000 will be up to £130 a year better off.
– £125 million over next three years targeting help to those “who need it most”.
– Pensioners: Further 600,000 taken out of paying income tax and pension credit guarantees minimum £124 weekly income from April.
– Winter fuel allowance: For over-60s raised to £250, for over 80s from £300 to £400/.

Housing

– Stamp duty: Not required on shared-ownership homes until buyers own 80 per cent.
– Mortgages: Review of housing finance concludes that long-term fixed rate mortgages can reduce some of the risks. Consulting on how to deliver right framework for UK.
– Housing construction: In addition to 40,000 already under construction, sites identified for 75,000 more houses.
– Green home service: £26 million of funding towards helping homeowners reduce consumption.
– Smart meters: Plans to extend use in domestic properties.

Taxation

– Non-doms: After seven years, reasonable charge to maintain right to be taxed differently. New charge implemented from April. No further changes to this regime for rest of this parliament or the next.
– Capital gains tax: Ninety per cent will continue paying CGT at ten per cent.
– Tory proposals on non-doms: “The sums didn’t add up.” Proposals abandoned.

Public services

– Public spending to grow by 2.2 per cent in coming three years. Under Labour it will have increased 500 per cent by 2011.
– £10 million over next five years towards £30 million enthused science fund, helping schools
– £60 million over next three years to improve skills including additional apprenticeships.
– UK science and innovation: to 2010, over £6 billion a year of funding. Further education innovation fund on the way in tomorrow’s white paper.

Environment

– Fuel duty by half a pence per litre from 2010 – but due to rise again in April. Postpone increase until October.
– Pre-payment meters: Energy companies should spend £150 million on social tariffs, up from £50 million.
– Climate change: Legal targets compelling action are unprecedented globally. Asked committee to consider 80 per cent emissions cut by 2050.
– Carbon budget to 2022: Announced in next year’s Budget.
– Electricity generator allowances: Auctioning to be raised from seven to 100 per cent.
– Carrier bags: Legislation to introduce charge on carrier bags in 2009 if no progress is seen. Ninety per cent reduction expected.
– New non-domestic buildings: All zero carbon by 2019. Consultation on that target planned.
– Climate change levy: Increase in line with inflation from April.

Defence

– Over £2 billion more this year spent on supporting front-line troops – £900 million on military equipment.

Business

– Corporation tax: Fall from 28 per cent to 18 per cent.
– North Sea oil fiscal regime: Reforms confirmed.
– SMEs: Tax simplification scheme introduced.
– Small firms loan guarantee scheme: Funds increased by £60 million for coming year. Scheme extended from next month to all small firms.
– Women entrepreneurs: £12.5 million fund to encourage more.

Sin taxes

– Alcohol: Beer up 4p a pint, cider up 3p a litre, wine up 14p a bottle, spirits up 55p a bottle. Alcohol duties to increase by six per cent above inflation from midnight on Sunday.
– Tobacco: 11p rise on pack of 20 cigarettes, 4p on pack of five cigars.
– Smoking cessation products: Five per cent reduced rate of VAT will continue beyond June 30th.

Savings

– Isas: Allowance increased to £7,200 from this year.
– Savings gateway: First accounts available by 2010.

Transport

– Fuel duty by half a pence per litre from 2010 – but due to rise again in April. Postpone increase until October.
– Crossrail: Funding secure, adding £20 billion to national income.
– Road pricing: Funding set aside to investigate this important initiative.
– Aviation taxation: To be included in European emissions scheme. Revenue from duty increased by ten per cent in second year of operation.
– Cars, vans and lorries – 22 per cent of emissions.
– Gas-guzzlers: High-emitting cars should pay more. Renewable transport fuel obligation to be introduced.