Brown looks ahead with tenth Budget
Brown looks ahead with tenth Budget
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Wednesday, 22, Mar 2006 10:36
Gordon Brown presented his tenth Budget to MPs this lunchtime setting out his determination to build on record growth, improve competitiveness and tackle climate change at home, while responding to global economic challenges and meeting ongoing commitments overseas.
In what some commentators expect to be his last Budget before taking over from Tony Blair as prime minister, Mr Brown announced plans to fund after-school science clubs; extend tax credits for research and development; and spend close to £1 billion on shared equity schemes to improve access to the property market.
Competitiveness was a key theme in this year's speech and it is an area in which the chancellor has been criticised in past. Spending money on less productive areas of the economy like public services, his detractors claim, has undermined growth.
Following on from yesterday's launch of a new business advisory council comprising of the likes of Microsoft chairman Bill Gates and Lord Browne of BP, the chancellor said today that the UK would look to expand trade links with emerging economies like India and China through the revamped UK Trade and Investment. He also announced plans to send more British students on scholarships to study at US business schools in a bid to foster entrepreneurial talent.
On the same theme, Mr Brown announced plans to make it easier for skilled immigrants attending UK universities to work in Britain for a year and proposals to refocus tax incentives for venture capital (VC) by offering 30 per cent relief for investment in VC trusts.
There was a commitment on red tape with the chancellor pledging to open talks with the European Council this week to discuss a move towards risk-based regulation. He also said the government was committed to liberalising employment markets throughout the EU.
The UK needs a growing number of highly skilled workers, and a falling number of low-skilled workers, Mr Brown warned. The New Deal would therefore be reformed as a New Deal for skills, he explained, pointing to the work of the Leach inquiry in this area. Mr Brown promised to address discrimination in women's pay, and provide training incentives for women.
Moving on from his pro-business agenda, the chancellor told MPs that the UK had met its Kyoto target by reducing carbon emissions by 28 million tonnes and that it intended to reduce emissions by a further six million tonnes. A key tool in meeting this target will be cutting vehicle emissions, which contribute to a quarter of the UK's total CO2 output.
A new zero band of vehicle excise duty (VED) will be introduced, while the bottom band will be cut to £40 and a new band of £210 will be introduced for the heaviest-polluting one per cent of cars, Mr Brown said, adding that by 2010, the government hoped five per cent of fuels would come from biofuels. This will be bad news for some motorists, but the inflationary rise in fuel duty was deferred until September, as expected.
The price of a packet of cigarettes will increase by 9p "for public health reasons" from tomorrow, but duty on whisky, champagne and cider will be frozen. A bottle of wine will go up by 4p per bottle and 1p will be added to a pint beer from Sunday.
Responding to the chancellor's statement, Conservative leader David Cameron said what he had heard was neither a Budget nor a leadership bid, criticising Mr Brown for failing to mention the health service despite its recent well-publicised financial problems.
This was Gordon Brown's tenth Budget. The last chancellor to deliver ten Budgets was Nicholas Vansittart in 1882.