Wednesday March 12, 03:08 PM
UK Budget Report: At-a-glance guide to main points
LONDON (Thomson Financial) - Following is an at-a-glance guide to the main points of UK Chancellor of the Exchequer Alistair Darling's Budget report speech
ECONOMY
-UK 2008 GDP growth forecast cut to 1.75-2.25 pct from pre-budget forecast of 2.0-2.5 pct
-UK 2009 GDP growth forecast cut to 2.25-2.75 pct from 2.50-3.00 pct
-UK 2010 GDP growth forecast unchanged at 2.5-3.0 pct
-Annual 2008 CPI (NYSE: CPY - news) inflation forecast raised to 2.5 pct from 2.0, before returning to 2.0 pct target in 2009
PUBLIC FINANCES
-Government to meet 'golden rule' of balancing the budget excluding investment across the economic cycle
-Debt seen at 38.5 pct of GDP in 2008/09, 39.4 pct in 2009/10, 39.8 pct in 2010/11, 39.7 pct in 2011/12, and 39.3 pct in 2012/13, enabling government to meet sustainable investment rule requiring net debt to be kept below 40 pct of GDP
-Current budget balance seen at -8.0 bln stg in 2007/08, in line with pre-budget forecast, increasing to -10 bln stg in 2008/09, narrowing to -4 bln stg in 2009/10, then moving back in surplus to 4 bln stg in 2010/2011. Surplus of 11 bln stg seen in 2011/12 and 18 bln stg by 2012/3.
-UK public net debt forecast cut to 37.1 pct of GDP in 2007/08
-Public sector net borrowing forecast cut to 36 bln stg in 2007/08 from 38.0 bln, but rises to 43 bln stg in 2008/09
SPENDING REVIEW
-Government spending to rise by 2.2 pct in coming three years
-To spend over 2 bln stg on British troops during 2008
TAXES
-Fuel duty rise of 2 pence a litre postponed until October
-Fuel duty to rise by 0.5 pence per litre in real terms from 2010
-No further changes to non-domicile tax seen this parliament or next, new tax regime to start in April
-Changes to capital gains tax to proceed as announced in January
-To simplify tax for small companies
-Tax relief on enterprise investment raised to 500,000 stg from 400,000
-Employee share limit for tax relief raised to 120,000 stg from 100,000
-Alcohol duty to rise by 6 pct above inflation from midnight on Sunday
-Duty on beer to rise by 4 pence, cider 3 pence, wine 14 pence, and spirits by 55 pence
-Tax on 20 cigarettes increased by 11 pence, five cigars by 4 pence
-To maintain 5 pct VAT rate on smoking cessation products beyond June
-To consult on limiting regulation imposed by government departments
GREEN
-Climate change levy to increase in line with inflation from April
-Revenue from plane duty to rise by 10 pct
-May introduce legislation to charge for plastic bags from 2009
-To seek cap on car emissions to 100 grams/co2/km from 130 grams/km by 2020
-To seek major reform of vehicle excise duty from April 2009
-To introduce reform to encourage lower emitting cars for business use
-To take steps to cut road congestion over next 20-30 years
-To set aside new funding for national road pricing scheme, and plans to invite tenders to test the scheme
-To announce in 2009 Budget first carbon budgets to 2022
-To allow energy companies to auction 100 pct of carbon credits
HOUSING
-To review housing finance to increase availability of long-term fixed-rate mortgage for 10-, 20-, and 25-year periods
-To invest 8 bln stg in new affordable homes over next three years, for which additional sites have been identified for 70,000 homes
-To scrap stamp duty on new shared equity schemes up to 80 pct of equity value
-Shared equity house buying scheme extended
MISCELLANEOUS
-To change housing, council tax benefit rules
-Working families with one child to gain up to 17 stg per week from 2009
-Child benefit for first child raised to 20 stg a week
-To seek increase in spending on energy companies' social tariffs to 150 mln stg from 50 mln
-To introduce legislation to help customers on pre-pay energy meters
-Transitional gift aid rate for charities of 22 pct
DMO
-Gilt remit raised to 80.0 bln stg in 2008/9 from 58.5 bln in 2007/8, mainly through increase in short-dated gilt issuances
-Longer-dated conventional gilts 24.2 bln stg over 11 auctions, up from 23.4 bln the previous year
-Index-linked issues at 18.0 bln stg over 18 auctions, up from 15.0 bln
-Medium-dated gilts 12.8 bln stg over five auctions, up from 10 bln stg
-Short-dated gilts 25.0 bln stg over seven auctions, up from 10.1 bln stg
-Treasury bill sales to total 5.8 bln stg over 2008/9, taking the total financing remit to 78.8 from 57.3 bln in 2007/8
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