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Budget in Brief

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Economy

Inflation target will be 2.5%.

Growth expected to be between 2.25% and 2.75% in 2001.

Net cash debt repayment in 2001 to be £34bn.

Net borrowing at surplus of £16.4bn for 2000/1£4bn extra will be made available for the government’s priorities each year.

Health and Education

In total £1bn to hospitals and £1bn to schools over three years.

New £200m fund for extra teachers.

Education spending set to rise by 5.2% a year after inflation.

Headteachers of every primary school will receive £13,000 with larger schools receiving £63,000.

Headteachers of every secondary school will receive for the smaller schools £68,000 and larger schools £115,000.

£135m fund for recruitment of front line staff for the NHS.

Between £500,000 and £1m for acute hospital trusts.

£200m to fight war on drugs.

Taxes and Benefits

Capital gains rate for employees in all types of companies cut to 10p from 40p.

Annual company accounts will become basis for calculating tax.

All lone parents on income support required to have regular interviews from 2002.

Landfill tax up to £12 per tonne from £11.

Guaranteed minimum income for severely disabled people on benefit of £142 a week

Seven and a half million pensioners will now pay no tax or tax at the 10% rate.

For the next five years up to £7000 a year of savings can generate income and capital gains that will be tax free.

£1bn a year tax a year first £1,880 will be taxed at 10%.

Pension credit will rise with earnings every year and pensioners tax allowances will be increased with earnings from 2003.

Maternity pay will be increased from £60 to £75 in successive stages.

Statutory obligation to maternity pay will be raised from 18 weeks to 26 weeks.

Two weeks paid paternity leave to be introduced.

Children’s tax credit be paid at £10 per week and for families with new babies to be set at a higher level and paid to people earning up to £50,000.

Families receiving the higher children’s credit and maternity pay will up to £2,240 a year better off.

Threshold for inheritance tax raised to £242,000 – meaning 96% of estates will pay no tax.

100% tax relief for investrment in environmental techology.

Minimum wage to be increased to £4.10 per hour from £3.70.

Duty

No real terms duty rise on cigarettes – an increase of 6p.

Petrol tax cut by 2 pence per litre for unleaded petrol until June and for ultra low sulphur petrol by the same amount.

Duty on ultra low sulphur diesel by 3p indefinitely from Wednesday night.

Lead replacement petrol will be cut by 2p a litre.

Duty frozen on wine, beer and whisky

Duty on road fuel gases will be frozen until 2004.

Vehicle excise duty abolished for all tractors.

70% all newly purchased cars will get a reduced licence fee – applies to engines under 1.5 litres.

Miscellaneous

Film industry tax incentive will be to 2005 at a cost of £50m next year.

Development and Regeneration

VAT reduction on church repairs from 17% to 5%.

New community investment tax credit.

100% capital allowances to renovate empty flats over shops.

Stamp duty abolished in designated areas to bring disused properties back into use.

£1bn package to speed up regeneration.

Regional development agencies to get new financial flexibility.

VAT threshold raised to £54,000 for small businesses.

150% tax relief for cleaning up contaminatated land.

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