Economics
Fiscal package: The Government will pump £20 billion into the economy
in an attempt to stave off a deep recession.
Growth: Mr Darling changed this year’s growth predictions, issued in
the March Budget, to 0.75 per cent from an earlier estimate of about 2 per
cent. He also downgraded the forecast for next year to between -0.75 per
cent and -1.25 per cent from 2.5 per cent. The Chancellor predicted growth
of between 1.5 per cent and 2 per cent in 2010.
Public
finances
Public spending: Real terms capital spending will increase by 1.2 per
cent a year. About £3 billion of capital spending will be brought forward
from 2010-11 to this year. The Government will inject £535 million into
energy efficiency, rail transport and environmental protection.
Efficiency cuts: The Government confirmed that an extra £5 billion
could be saved in the public sector on top of the original £30 billion of
efficiency savings it had planned for between 2007 and 2010.
Borrowing: The Chancellor said borrowing would reach £78 billion next
year, up from the previous forecast of £43 billion. Borrowing will rise to
£118 billion in 2009-10, or 8 per cent of GDP. From 2010 it will fall to
£105 billion, then £87 billion, £70 billion and £54 billion. By 2015-16 the
Government will borrow only to invest.
Net debt: will rise to 41.2 per cent this year, then to 48.2 per cent
in 2009-10; 48 per cent in 2010-11; 53 per cent in 2011-12, peaking at 57
per cent of GDP in 2013-14. The package confirmed that the Government would
suspend its rule that limits borrowing to 40 per cent of GDP.
Family
and investment
Individual savings accounts: The Government will pay 50p for each £1
saved for nearly 8 million low-income savers.
Debt advice: The Government will pump £15 million into the provision of
debt advice.
Tax havens: A review of the regulatory arrangements surrounding the
Isle of Man and the Channel Islands has been commissioned and will report in
the spring.
Pensions
and child benefit
State pension: Pensioners will see their payment increase from £90.70
to £95.25 a week. Pensioners on modest incomes will get an increase in
pension credit from £124 to £130 and for couples from £189 to £198 from
January 2009.
Disability: Pensioners and children with disabilities will gain an
extra £60 to go towards energy bills from January next year. This will be
£120 for couples.
Child benefit: Next April’s planned increase in child benefit to £20 a
week will be brought forward to January. Children will receive a one-off £70
payment for Christmas.
Energy
Energy prices: The Government may introduce statutory powers to cut
energy bills.
Insulation: Up to £100 million will be spent to help people to insulate
their homes.
Environment
Vehicle excise duty: New tax bands will be phased in. Vehicle excise
duty rates for all cars will increase by up to £5 next year. Differential
increases in duty will be introduced from 2010. More polluting cars will see
duty increased, up to a maximum of £30, while less polluting cars will see
no increase or a cut of up to £30.
Climate change levy: The renewables obligation, which requires energy
generators to use greener methods of production, will be extended for an
additional ten years to 2037.
Air passenger duty: A four-band tax duty is to be introduced. Long-haul
passengers will pay more.
Business
Corporation tax: The Government will defer the increase in corporation
tax for small businesses. Corporation tax for small firms was set to rise to
22 per cent from April 2009 from 21 per cent as part of a staged increase
set out in the March 2007 Budget.
Small and medium-sized enterprises: Mr Darling said he was delivering
£1 billion of tax cuts through the Small Business Finance Scheme and £2
billion of loan guarantees.
Lending to SMEs: Banks will be given an extra £4 billion to help SMEs.
Mr Darling said banks should follow RBS’s example of not increasing charges
to SMEs.
Business tax repayments: SMEs will be allowed to spread business tax
payments over a period to help to ease cashflow and credit constraints.
Export guarantees: Small businesses will gain £1 billion in export
guarantees from January through the Export Credit Guarantee Department.
Tax repayments: There will be an extention of a scheme to help
businesses which were previously profitable but are now making losses.
Losses of up to £50,000 can be offset against profits made in the past three
years rather than just one, a move that Mr Darling said would benefit 75,000
businesses.
Foreign dividends: Mr Darling introduced an exemption for companies’
foreign dividends from tax in 2009, in an effort to allay concerns over
proposed changes to taxation of foreign earnings that have led some
companies to shift their tax domicile out of Britain.
Rates: Empty commercial properties will be exempt from business rates
from 2009-10 if the rateable value is less than £15,000.
Personal
taxes
Income tax: From 2010, income tax will be charged at 45 per cent on
incomes over £150,000.
Allowances: Personal allowances will be scrapped for those earning in
excess of £140,000 a year from April 2010.
Ten pence band: The increase in the personal allowance to offset the
scrapping of the 10p tax band is to be made permanent and increased to £145
a year from £120.
National insurance: From April 2010 national insurance contributions
will rise by 0.5 per cent for employers and employees but those earning less
than £20,000 will be exempted.
Pension funds: The ceiling on tax relief given to people with pension
funds up to £1.8 million will be maintained until 2015-16.
Value
added tax
VAT: The tax on sales will be cut from 17.5 per cent to 15 per cent
from Monday until the end of next year after which it will return to
original rate. That reduction will be offset by increased duties on alcohol,
tobacco and petrol.
Property
Housing support package: The Government will offer an overall housing
support package worth £1.8 billion.
Affordable housing: An extra £775 million will be brought forward to
invest in new housing and modernisation schemes.
Mortgage rescue scheme: The Government said that the scheme would be
extended to those with a second mortgage.
Mortgage interest scheme: The limit on the mortgage interest scheme is
to be raised from £100,000 to £200,000.
Repossessions: Main lenders agreed to wait three months before starting
a repossession order against struggling home-owners.
Jobs
and unemployment
Adult training: Up to £1.3 billion in funding will be provided for
training. Tesco, Centrica and Royal Mail were named as being among
businesses that would work with Jobcentre Plus to help with training.
Unemployment The Government will extend its rapid response service for
those who have been made redundant.
Banks
Banks: The Government said that banks would have access to £100 billion
under credit guarantee.
