The Budget at a glance

Key announcements

Economy
UK growth forecast for 2008 has been reduced to between 1.75 per cent and 2.25 per cent, compared to previous forecasts of between 2 per cent and 2.5 per cent.

Growth forecasts for 2009 are now set at 2 per cent to 2.5 per cent, a reduction on 2.5 per cent to 3 per cent expectations. For 2010, growth is forecast at 2.5 per cent to 3 per cent.

GDP will rise to between to 2.25 per cent and 2.75 per cent in 2008. In 2009, GDP will rise to between to 2.25 per cent and 2.75 per cent and in 2010 to between 2.25 per cent and 2.75 per cent.

The inflation target for CPI will remain at 2 per cent.
Borrowing will rise from £36 billion to £43 billion in 2008, equal to 2.9 per cent of national income. This will decline £23 billion, or 1.3 per cent, by 2012-2013.

Borrowing will total £140 billion over the next four years.
The current Budget deficit will be £10 billion in deficit in 2008-2009. It is forecast to decline to £4 billion in the following year and is expected to return to a surplus in 2010-2011 - a year later than was scheduled.

UK debt is now 36.6 per cent of GDP. Debt is forecast to reach 38.5 per cent in 2008.

Public sector investment will reach £33 billion next year.
Public spending

Public spending in next three years will grow by 2.2 per cent.

The Government will spend £2 billion more on British troops in 2008 including £900 million on equipment.

Schools to receive £200 million extra to raise GCSE results. A £30 million fund will be introduced to improve science studies.

By April 2010, all long-term recipients of incapacity benefits will face work assessments.

Environment
Government is to take advice on whether the carbon emissions reduction target can be raised to 80 per cent by 2050. Climate change levy increased in line with inflation from April.

Reform of the North Sea fiscal regime to encourage investment.

“Carbon Budgets” to be issued alongside regular Budgets from 2009.

Threat to introduce legislation to reduce plastic carrier bags in 2009 if voluntary action does not work, with funds going to environment charities.

Some £26m funding next year for the Green Homes Service to help people reduce the carbon output of their homes. New non-domestic buildings to become “carbon neutral” by 2019.

Charges on plastic bags may be introduced next year if shops fail to reduce their use on a voluntary basis.

Revenue from plane duty to rise by 10 per cent.
New measures at Heathrow and other airports to increase the use of biometric technology to speed up air travel.

A total £26 million will be committed to the Green Home Service to help families cut fuel bills. UK carbon emissions to be reduced by 80 per cent by 2050.

Energy companies to spend £150 million a year on energy tariffs.

Five million customers on pre-payment meters to be given a fairer deal. Legislation will be introduced if necessary.

Tax and national insurance
Changes to income tax confirmed from April. Basic rate drops from 22 per cent to 20 per cent and the 10 per cent band is abolished.

The upper earnings limit on national insurance contributions increased from £670 per week to £770 per week from April.

Non-domicile tax scheme implemented from April, charging a fee to those in UK for more than seven years who wish to retain non-domicile status. There will be no further changes to the regime in this parliament or the next.

Beer duty to increase by 4p per pint, wine up 14p a bottle, cider up 3p a bottle and spirits up 55p a bottle.
Tobacco duty increased by 11p per packet of 20 cigarettes and 4p for five cigars.

An escalator was introduced by the Chancellor on alcohol duties which will see charges increase by 2 per cent above inflation for the next four years.

Motorists
Fuel duty will rise by 0.5p per litre in 2010. A 2p increase in fuel duty is deferred until October this year.

Reform to road tax planned for 2009. Vehicle tax rates will depend on vehicle emissions from 2010. Low-polluting cars will pay no tax for the first year from 2010.

First year car tax on so-called "gas guzzler" vehicles will rise by £1,000.

Carbon emissions from vehicles to be reduced from 130 grammes to 100 grammes per kilometre by 2020.

Road pricing could reduce congestion and help environmental measures. The Government will invite tenders to develop road pricing technology.

Employment
Public sector employment has fallen in the past year. Private sector employment has risen to record levels.
Some £60m to be spent over the next three years to encourage people to enter work and progress.

Education
Government to spend £10m over the next five years to create a new science fund for teachers in secondary schools.

There will be an increase in the amount of funding for adult training. Investment of £200m in under performing schools in an effort to improve GCSE grades by 2011.

Property
Measures to keep mortgage rates low and stable to include encouraging banks to offer long-term fixed rate mortgages following the turbulence in world credit markets.

Sites identified for 70,000 more new houses in addition to the 40,000 already under construction.

Some £8bn to be made available for affordable housing.
Key workers and first-time buyers to be able to borrow from new shared equity schemes to provide up to half of the price of new homes.

Stamp duty on shared ownership homes will not be required until the occupant owns 80 per cent of the equity.

£8 billion in funds to be committed to new, affordable and social housing.

Teachers, nurses and first-time buyers can borrow money for shared equity schemes, and the minimum stake has been reduced from 75 per cent to 50 per cent.

Labour is seeking views on how long-term fixed mortgages can help first-time buyers to get on the housing ladder.

All new offices, shops and other commercial buildings are expected to be zero carbon by 2019.

Pensions
Fuel benefits for the over 60s rises from £200 to £250 and for the over 80s rises from £300 to £400.

Transport
Funding for the Crossrail project in London secured.
Increased biometric measures to be introduced at Heathrow to reduce airport congestion.

Government to set aside new funding to encourage road pricing schemes.

Aviation duty to increase by 10 per cent in the second year of operation.

Welfare
Long-term recipients of sickness benefits to attend “work capability assessments” from April 2010.

Government plans to reform council tax and housing benefit.

New contract to help parents into work involving a commitment to find employment. Benefits for working families will be boosted.

Government to invest an extra £125 million over three years to stop child poverty.

From April 2009, child benefits will rise to £20 for the first child. An extra £50 above inflation will be added to child tax credit for low and middle-income families.

Government will work with energy companies on a voluntary and statutory basis to help low-income households meet fuel bills. The government wants energy companies to triple spending on social tariffs to £150m.

Winter fuel payment up to £250 from £200 for over 60s and up to £400 from £300 for the over 80s.

Savings
Government to launch the Saving Gateway, a cash saving scheme for those on lower incomes, will be introduced nationally, with the first accounts available to savers in 2010.

To encourage people to save money, the government will increase the ISA investment limit to £7,200 from April with the amount that can be held in cash rising to £3,600.

Defence
Chancellor expects to spend £2bn more on defence, including £900m on new equipment.

Business and corporation tax
New flat rate capital gains tax charge of 18 per cent for individuals introduced from April as previously announced, up from 10 per cent.

Small firms loan guarantee scheme increased by £60m this year. Enterprise management incentive tax relief scheme increased from £100,000 to £120,000.

Government launches £12.5m fund for female entrepreneurs.

Target for small and medium-sized businesses to win 30 per cent of public sector contracts in the next five years.

No further cut on corporation tax above the 2 per cent reduction to 28 per cent announced last year. Main corporation tax rate falls from 30 per cent to 28 per cent from April.

Small business corporation tax rate to rise to 21 per cent in 2008-2009 and 22 per cent in the following year.

Government to go ahead with plans to charge a levy, set at £30,000, for non-doms in the UK who will not be charged on offshore income.

An extra £60 million has been committed to filling the UK “skills gap.”

Aims for small businesses to win 30 per cent of public sector business.

Funds for loan guarantee scheme for small businesses will be increased by £60 million.

Government will introduce a capital fund of £12.5m to encourage more female entrepreneurs.

The threshold for businesses to account for VAT on a cash basis increases from £660,000 to £1.35 million from April.

Levels and bases of, and reliefs from, taxation are subject to change.