Finance Bill Tracking Service 2007 | Budget 2007

Press Notices

21 March 2007

CONTENTS:

PN 01 Building Britain's long-term future: Prosperity and fairness for families

PN 02 Income tax allowances, National Insurance Contributions, Child and Working Tax Credit rates 2007-08 and other rates

PN 03 Ensuring fairness for all taxpayers

BUILDING BRITAIN'S LONG-TERM FUTURE: PROSPERITY AND FAIRNESS FOR FAMILIES

The Government's economic objective is to build a strong economy and a fair society, where there is opportunity and security for all.

The long-term decisions the Government has taken – giving independence to the Bank of England, new fiscal rules and a reduction in debt – have created a strong platform of economic stability. The UK economy is currently experiencing its longest unbroken expansion since quarterly records began, with GDP now having grown for 58 consecutive quarters.

The global economy is in the midst of radical transformation with far reaching and fundamental changes in technology, production and trading patterns. This transformation will present both challenges and opportunities for the UK. Individuals, businesses and communities all need to be ready to respond to the changing global environment. This Budget sets out further reforms to lock in stability and to invest in the UK's future, including a major package of reforms to the corporate tax system to enhance international competitiveness, encourage investment and promote innovation, reducing the main rate of corporation tax to 28 percent by April 2008, the lowest in the G7.

The Government is committed to promoting fairness alongside flexibility and enterprise to ensure that everyone can take advantage of opportunities to fulfil their potential. The Government has undertaken a comprehensive programme of reform to the tax and benefit system with the aims of encouraging work and saving, supporting families, and ensuring security for all in old age. The Budget announces the next stage of these reforms, including removing the 10 pence starting rate and cutting the basic rate of income tax from 22 pence to 20 pence in April 2008, alongside increases to the Child Tax Credit and the threshold for the Working Tax Credit.

The Government's aim is to deliver world-class public services through sustained investment matched by far-reaching reform. The Budget announces that education spending in England will rise by 2.5 per cent each year in real terms (5.3 per cent in cash terms) on average between 2007-08 and 2010-11. As a result total education spending in England will rise from £63.7 billion in 2007-08 to £66.9 billion in 2008-09, £70 billion in 2009-10 and £74.4 billion in 2010-11.