ECONOMY

Growth

Video: The FT’s Budget assessment

Martin Wolf, Philip Stephens, Rob Budden and Chris Giles give their view

Gross domestic product growth is forecast at 2.5-3 per cent in next two years.

Inflation

Inflation forecast to fall to 2 per cent this year and will be on target in 2008-09.

Public finances

Chancellor forecasts £11bn surplus in the current economic cycle.

Investment

Investment up 6 per cent in the last year, business investment up 7 per cent and inward investment up 10 per cent.

Public debt

Net borrowing for this year to total £35bn followed by £34bn next year, then £30bn, £28bn and £26bn. Net borrowing this year stands at 2.7 per cent of national income, then 2.4 per cent in 2008, 2 per cent in 2009 and 1.8 per cent in 2010.

Government spending

Capital expenditure to reach £43bn this year, then up to £48bn in 2008, £52bn in 2009, £55bn in 2010, £57bn in 2011 and £60bn by 2012. Total public spending to reach £674bn by 2010-11. Total expenditure to be £552bn this year followed by £587bn, then £615bn, £644bn and £674bn.

Asset sales

Extra asset sales over next four years to release £36bn.

INCOME TAX

Basic rate cut by 2p

Basic rate of income tax to fall from 22p to 20p from next April.

Top rate moves up

The top rate of income tax to be applied from earnings of £43,000 rather than from £38,000.

Scrapping of 10p band

Mr Brown says the 10p income tax band will be scrapped from April 2009.

Capital gains

Capital gains tax allowance rises from £8,800 to £9,200 this year.

Tax credits

Working tax credit up by £1bn per year. Level at which family with two children pay tax is now at £22,500 and set to rise to £24,250 by 2009.

BUSINESS

Corporation tax cut

Corporation tax rate to be cut from 30p in the pound to 28p from April 2008.

Small business tax up

Mr Brown to raise tax on small business from 20p to 22p in the pound by 2009.

Investment

Small firms able to claim 100 per cent tax relief for new capital investment up to £50,000.

Industrial buildings

Phasing out of relief intended for industrial buildings .

Long-life assets

Annual relief for long-life assets to be raised from 6 to 10 per cent.

ENVIRONMENT

More tax for 4x4s

Tax on the highest polluting vehicles or 4x4s up to £300 immediately and £400 next year. Tax cut for low-emission vehicles from £50 to £35.

Emissions

Mr Brown says vehicle emissions cut by 2m tonnes since 1997.

Green products

Value-added tax to be cut from 17.5 per cent to 5 per cent on  environmental products for the home.

Landfill

Landfill tax up £8 per year from next year until 2011.

Empty property

Tax relief on empty business property to be restricted to six months and to three months on empty retail space.

‘Zero carbon’ homes

New “zero carbon” homes up to £500,000 in value to be exempt from stamp duty until 2012.

Insulation

Insulation grants worth up to £4,000 to be offered.

Rainforests

A £50m fund established to protect rainforests.

Transport

Report on renewable energy innovation in transport.

EDUCATION

Spending

Total education budget to reach £74bn by 2010.

Student debt

Student debt worth £6bn to be sold off.

HEALTH

Spending

NHS to receive an extra £10bn this year. The investment levels for 2008-11 will be decided in the forthcoming spending review.

MOTORISTS

Fuel duty

Annual increase in fuel duty suspended until October. Mr Brown to  raise fuel duty by 2p a litre in 2008 and by 1.8p in 2009.

EMPLOYMENT

Jobs growth

Mr Brown says 220,000 new jobs created in the UK in the past year and that there are 2.6m more people in work since 1997.

Supermarkets

“Partnership for Jobs” programme established with big supermarket chains to encourage the unemployed back into work.

Training

Small businesses to get £2,000 or £3,000 for training out-of-work young people.

ALCOHOL

Beer and wine up

Beer up 1p per pint from midnight on Sunday, cider up 1p per litre. Wine up 5p a bottle and sparkling wine up 7p. No change for spirits.

TOBACCO

Rise of 20p a packet

The price of a pack of 20 cigarettes to rise by 11p from midnight tonight.

Cheaper to quit

Value-added tax on nicotine replacement products cut from 17.5 to 5 per cent.

INHERITANCE TAX

Thresholds

Inheritance tax allowance to rise from £285,000 to £350,000 by 2010.

National Insurance Contributions

NIC ceiling set at at £43,000, the same level as the new top rate of income tax,

OTHER TAXES

Gambling

Gaming duty to be aligned to 15 per cent of profits.

Oil revenue

Tax revenues from North Sea oil forecast to fall by £4bn per year.

SAVINGS

ISA allowance

Cash ISA allowance up 20 per cent to £3,600 from April next year.

WELFARE

Child benefit

Child benefit for the first child up 15 per cent by 2010 to £20 per week.

PENSIONERS

Tax allowances

Tax-free allowances for over 75s set to rise annually from £7,420 to £10,000 by 2011. Couples under 75 will have a tax-free married allowance up to £19,540.

Housing

Mr Brown says VAT on a specified list of housing alterations needed by elderly people reduced from 17.5 per cent to 5 per cent.

Pension credits

Pension credits to continue to rise in line with earnings.

DEFENCE

Spending

The defence budget will get an extra £86m this year, lifting the security and intelligence budget to £2.25bn this year. The armed forces will receive a £400m boost this year.

RESEARCH

Tax credit

The research tax credit to be raised by an extra £100m.

Science

Public investment in science up 25 per cent to £6.3bn by 2010.

Business

Corporation tax to be reformed to enhance research and development allowances.

CIVIL SERVICE

Efficiency

Public sector efficiency savings targets of 3 per cent over the next three years.

COMMUNITY

Fund for groups

An £80m fund established to help small community organisations.