Darling: More schools and hospitals for Britain
Tuesday, 09 Oct 2007 19:55
Alistair Darling faces his first key test as chancellor
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Education and the NHS are the big winners from Alistair Darling's pre-Budget report as the minimum threshold for inheritance tax is doubled to £600,000.
The chancellor said that by raising the combined tax-free allowance for inheritance tax from £300,000 to £600,000, as opposed to the higher £1 million level proposed by the Conservatives, he would be saving £2 billion which could be given to public services.
The funds will be poured into a total investment in health to £110 billion from £90 billion this year which will together deliver "20 new hospitals, 140 new walk-in centres open seven days a week, 100 new GP practices and [an] aim to ensure a regular check-up for every adult in the NHS".
Education and skills would see an increase in its share of total government spending from 4.5 per cent in 1997 to 5.6 per cent now, rising to £74 billion in 2010 which the chancellor said would pay for a new primary school in every local area within three years.
Mr Darling said he had decided against granting inheritance tax relief for estates worth over £950,000 as these represented the top one per cent in the country.
"I could have spent that £2 billion on an inheritance tax reduction for the few wealthiest estates," he said.
"Instead I am able to raise the inheritance tax allowance and invest more in schools and hospitals for all the British people."
Earlier in his statement Mr Darling said turbulence on the international markets, which caused last month's run on the Northern Rock bank, would be weathered by the "resilient" British economy.
Although readjusting the Treasury's forecast for economic growth in 2008 to between two and two and a half per cent, Mr Darling insisted that total borrowing and debt had fallen below forecast and remained controllable.
He predicted that inflation would remain at the Treasury's two per cent target "next year and the year after" and reiterated the government's commitment to its two "fiscal rules".
Shadow chancellor George Osborne criticised Mr Darling and his predecessor Gordon Brown, now prime minister, for giving a "pre-election budget without the election".
"For ten years the prime minister has been sucking millions of families into the inheritance tax net," he said.
"For ten years he did nothing. Now a week after we put forward our plans, the prime minister and the chancellor scrabble around in a panic.
"He talks about setting out his vision of the country but he has to tell us what it is. This is not leadership of this country, it is 'followership'. He is a puppet of recent events."