17 March 2004


The Budget 2004:

The Chancellor has announced his latest budget proposals. The key features are as follows:

• Growth forecast at up to 3.5% this year and next; 2.5% - 3.0% in 2006.
• 'Golden rule' will be met - budget surplus will be £11 billion at the end of the economic cycle.
• Borrowing in 2003 - 2004 will be £37.5 billion falling to £23 billion by the end of the decade.
• Duty on cigarettes up 8p per packet of 20
• Duty on a pint of beer up 1p
• Duty on wine up 4p per bottle
• Spirits, cider and sparkling wine - duty unchanged
• Inheritance tax threshold raised to £263,000
• Inheritance tax rates, betting duty, stamp duty, corporation tax, airport tax, car tax (vehicle excise duty) all frozen
• Delay in annual rise in fuel duty for cleaner fuels
• Bureaucracy cuts for public sector - jobs to go in Department for Work and Pensions
• Inland Revenue and Customs and Excise to be merged
• All departments to cut 'back room' costs by 5%
• Spending on key government departments will continue to rise in real terms
• NHS - 7.2% real terms increase, Education, 4.4% real terms increase
• Increase in international development budget
• Churches and religious places to become exempt from VAT liabilities
• More spending on health research and on developing science based skills and expertise
• Government spending rising from £459 billion per year to £488 billion next year and £579 billion by 2007/8
• Debt interest payments at lowest level since 1915
• Pensioners over 70 to get £100 payment to help pay Council Tax bills

Remember to look at the Mind Your Business article for this week to do some analysis of what these changes mean to the economy and to the non-economic priorities of the government.