Brown grabs 1pc to pay for better health
A CONFIDENT Gordon Brown today presented a Budget he said would keep the economy on track throughout the current parliament.But families will have to pay for improvements to public services – National Insurance rates are going up by one per cent next year.
By Paul Geater
A CONFIDENT Gordon Brown today presented a budget he said would keep the economy on track throughout the current parliament.
But families will have to pay for improvements to public services – National Insurance rates are going up by one per cent next year.
Excise duty on alcohol and fuel is remaining unchanged – but cigarettes are going up 6p a packet.
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Bingo players were shouting "House" when the Chancellor abolished tax on their favourite flutter – bringing it into line with other forms of gambling.
And Mr Brown also had cheer for country pubs and small breweries – he knocked 14p a pint off locally-brewed beer in rural pubs.
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He is using part of the money to give the NHS a major cash boost – he plans to increase its spending by 10 per cent a year over the next five years.
Health spending will rise from 6.7 per cent of GDP this year to 9,4 per cent of GDP by 2007-8, Mr Brown said.
The Chancellor said this would be funded by raised national insurance contributions and frozen personal tax allowances.
The two moves would mean a full-time earner on the average £21,400 a year would pay £3.70 a week more, Mr Brown told MPs.
The Chancellor said the measures were needed "to fund the National Health Service that we want".
In the first year they would raise an extra £6.1 billion, rising to £8.3 billion in 2005/6, the Chancellor said.
The Chancellor of the Exchequer was presenting his sixth budget to a packed House of Commons.
Mr Brown said his budget had three main aims:
To promote enterprise.
To increase family prosperity.
To renew public services – especially improve the NHS.
Mr Brown was also portraying himself as the green Chancellor by offering tax incentives for businesses producing and using environment-friendly energy.
He also reduced vehicle excise licence for the least polluting vehicles – green vans will have £55 knocked off their vehicle tax, green cars will cost £30 less to tax, and green motorcycles will cost £35 less each.
The Chancellor introduced new changes aimed at helping families on low incomes – every lone parent working 16 hours a week would be guaranteed £179 a week, and all families with a parent working full time would be guaranteed £237 a week.
A single person in full-time work will be guaranteed £154 and a couple with no children would be guaranteed £183 a week.
A new child tax credit would be paid to all mothers in families with an income of up to £58,000.
Mr Brown said he would be spending an extra £4 billion on public services over the next year.
An extra £2.5 billion will be spent on supporting families over the next year.
Schools would get extra money direct from the government. Secondary schools would see their extra cash increased from an average of £98,000 this year to £114,000 next year.
The average primary school will see its extra grant go up from £33,700 to £39,300.
The fight against crime will get an extra £280million to ease the overcrowding in the prisons and carry on the war against terrorism and street crime, the Chancellor said today.
Home secretary David Blunkett will be allowed to raid the criminal justice reserves for £100m, and get £180m of new money.
The cash will pay for 2,300 new prison places and new secure accommodation for persistent child offenders.
The economy is expected to rise by between 2 and 2.5 per cent over the next year, Mr Brown said. During 2001, it grew by 2.2 per cent.
The Chancellor of the Exchequer told the House of Commons that his proposals would keep the economy on track to possibly join the Euro in the future.
Vat rules for small companies will be simplified, making it easier for them to collect the tax for the government.
Tory leader Iain Duncan Smith was scathing in his reply to the budget as he accused the Chancellor of breaking Labour's election pledge not to increase income tax, by putting 1p on National Insurance.
Union leaders welcomed the Budget and praised the Chancellor for pumping extra money into public services.
John Edmonds, general secretary of the GMB, said: "This was a rare event in British politics - an honest and courageous Budget.
"By putting investment into the NHS and other public services, before tax cuts, Gordon Brown has put need before greed.
"This is the Budget the Labour movement and the country has been waiting for."