Budget
Summary Leaflet
Prudent for a Purpose:
Working for a Stronger and Fairer Britain
Key Budget measures include:
- the largest ever sustained increase in NHS resources;
- extra spending in the coming year of £1 billion for education; and an extra £285 million to tackle crime and £280 million to improve transport;
- a £4.35 a week increase for children under 16 in the Working Families? Tax Credit and a 50p a week increase next year in the Children's Tax Credit;
- a further increase in the pensioners? winter fuel payment to £150 a year;
- road fuel duties and most alcohol duties increased in line with inflation and tobacco duties raised by 5% in real terms to help fund the NHS; and
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extending the vehicle excise duty reduced rate to cover cars up to 1,200cc - benefiting an extra 2.2 million car owners.
How the Budget impacts on you and your family...
By April 2001, personal tax and benefit changes in this and previous Budgets mean that:
- on average, households will be £460 a year better off;
- families with children will be £850 a year better off; and
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the tax burden on a single earner family on average earnings with 2 children will be the lowest since 1972.
Modernising public services...
Budget 2000 announces further additional resources for the Government's key priorities.
For health:
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an extra £2 billion for the National Health Service for the year from April, including extra revenue from the tobacco duty increase;
- 6.1 % average annual real terms growth over the next four years - the longest period of sustained high growth in the history of the NHS;
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a 50% cash increase in NHS spending over the 5 years from the beginning of the first Comprehensive Spending Review - 35% in real terms - equivalent to a rise in NHS cash spending per household from £1,850 in 1998-99 to £2,800 in 2003-04.
The new allocations for the NHS in the UK are set out below.
NHS spending in the UK, cash (£ billion)
| 1998-99 | 1999-00 | 2000-01 | 2001-02 | 2002-03 | 2003-04 | Average | |
| Previous plan | 45.1 | 49.3 | 52.2 | 55.5 | |||
| New provision | 45.1 | 49.3 | 54.2 | 58.6 | 63.5 | 68.7 | |
| Year on year real growth (%) | 7.4% | 5.6% | 5.6% | 5.6% | 6.1% |
Note: these figures include additions to the devolved administrations and the Northern Ireland departments.
For other key public services:
- a further £1 billion for education, providing more money for schools and helping young people to stay on at school; and
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an extra £280 million for transport and an additional £285 million for tackling crime.
Building a fairer society...
Budget 2000 takes further steps to support families and pensioners, ensure a
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fair tax system and protect the environment:
- an extra £4.35 a week for the under 16 child credit in the Working Families? Tax Credit from June (and for the child allowance in Income Support from October) and an extra 50p a week on the Children's Tax Credit when it is introduced in April 2001. The value of the Children's Tax Credit will be more than twice the married couple's allowance (withdrawn from April 2000) which it replaces.
- a £100 increase in the Sure Start Maternity Grant to £300 from the autumn;
- as a result of measures announced in this Parliament, 1.2 million children will be lifted out of poverty;
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support for pensioners including a further increase in the winter fuel payment from £100 to £150 for every household with someone over 60;
- a boost for savings, with the current £7,000 Individual Savings Account (ISA) contribution limit retained for 2000-01;
- a 5% real increase in tobacco duty, with the additional revenue raised going towards investment in the National Health Service;
- a freeze in spirits duty, while increasing other alcohol duties in line with inflation; and
- protecting the environment through reforms to vehicle excise duty including an extension of the reduced rate to cars with engines up to 1,200cc from March 2001 - benefiting 2.2 million more cars; increases in road fuel duties in line with inflation; reforms to company car tax to encourage the use of environmentally-friendly vehicles and fuels; an increase in landfill tax to promote better waste management; and a new levy on the extraction of aggregates from 2002.
Increasing employment opportunity and making work pay...
The Government is introducing a comprehensive set of measures and reforms to ensure that everyone who is able to work has the chance to do so.
Media links
There are 800,000 more people in jobs than in Spring 1997. The Government's New Deal has already helped over 185,000 young people into jobs. Long-term unemployment has been halved, and youth unemployment cut by 70%.
Building on the steps already announced, including a cut in the basic rate of income tax to 22p from April, reform of national insurance contributions, including higher earnings limits, and an increase in the National Minimum Wage from October, Budget 2000:
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increases the Working Families? Tax Credit, guaranteeing a minimum income of £214 a week from April 2001 for working families with a full-time earner;
- ensures that from April 2001 no family earning less than £255 a week will pay any income tax overall;
- introduces a new Job Grant from spring 2001 to ease the transition from welfare to work;
- creates Action Teams from autumn 2000 to help match unemployed people in the areas of highest unemployment to suitable vacancies in neighbouring areas;
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extends and enhances the New Deal programmes for 18-24s and 25+; and
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offers lone parents enhanced choices for work, education and training. All lone parents on Income Support with children over 5 will meet with a specialist adviser to guide them through these choices.
Delivering a stable economy...
Over the past three years the Government has been working to deliver a stable economy. Its commitment to prudence and stability has delivered low inflation and returned the public finances to health, ensuring no return to the boom and bust of the past.
This prudence is for a purpose. It means the Budget can ensure that the public finances remain under firm control while releasing significant new resources for health and education:
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underlying inflation is expected to remain close to its 21/2% target;
- stronger economic growth has spread to most regions and sectors of the economy over the past year. The abolition of mortgage interest tax relief from April 2000, and Budget increases in stamp duty for higher value properties will help to promote stability in the housing market;
- there are now more people in work than ever before - up 800,000 since May 1997. Unemployment is at a 20-year low; and
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the public finances remain well on track to meet the Government's strict fiscal rules to control borrowing while at the same time releasing significant new resources for health and education.
Summary of Economic Prospects
|
Forecast |
||||
| 1999 | 2000 | 2001 | 2002 | |
| Economic Growth (%) |
2 |
2 3/4 to 3 1/4 |
21/4 to 23/4 |
2 1/4 to 2 3/4 |
| Underlying Inflation (%) |
2 1/4 |
2 1/4 |
2 1/2 |
2 1/2 |
Building stronger British businesses...
Media links
Britain's productivity lags behind that of its main competitors - our output per worker shows a gap of up to a third with countries like the US, France and Germany. Closing this gap and raising Britain's productivity growth will mean more jobs and higher living standards in years to come.
Budget 2000 announces further measures to boost productivity:
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reductions in capital gains tax for entrepreneurs and employee shareholders;
- permanent 40% capital allowances to encourage investment by small and medium sized firms, and introducing enhanced 100% capital allowances for small firms buying information and communications technology equipment;
- further steps to promote electronic commerce including a £60 million package to provide advice and information to small firms on-line, help them get on-line, and new discounts for electronic filing of tax returns;
- final details of the new all-employee share ownership plan to be introduced in April to encourage employees to take a stake in the success of their companies; and
- a new £1 billion target umbrella fund for enterprise growth to increase early access to venture capital for small growth potential businesses across all regions of the UK.
Where taxpayers? money is spent...
Public spending is expected to be around £370 billion next year: around £6,000 for each man, woman and child in the UK.
Media links
Internal links
- Link to Budget 2000 Index Page
Related links
