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Overview
The Chancellor forecast 2.0%-2,5% growth in the whole economy for this
year, and 3._0_%_-3.5% in 2004 and-20-05. Underlying inflation is expected
to be 2.75% this year, falling to 2.5% next year. The Government's inflation
target remains at 2.5%.
Public Spending
Spending on health remains as previously set in the 2002 Comprehensive
Spending Review (CSR 2002) with expenditure to rise at 7.4% p.a. in real
terms between 2002/3 and 2007/8. Educational spending is also as per the
CSR 2002, and is forecast to rise by 5.7% p.a. in real terms. Transport
spending, forecast to rise in real terms by 8.4% p.a. together with other
sectors such as housing, defence and criminal justice, are all as laid
out in the CSR 2002.
Duty
Stamp duty on homes and business property transactions is frozen. The
stamp duty regime is to be modernised including: measures to tackle stamp
duty avoidance; exemption levels increased from £60,000 to £150,000
for non-residential properties from 1 December 2003, and a new lease duty
rate of 1.0% above exemption levels from 1 December 2003, but this is
subject to further consultation.
Taxation
- The personal allowance for income is frozen for 2003/4 at £4615.
- Capital Gains Tax (CGT) and insurance tax rates are frozen and the
CGT annual exemption amount rises to £7,900. There were no changes
to Corporation Tax or the Climate Change Levy.
- The standard rate of Landfill Tax is to be raised by £1/tonne
p.a. until 2004/5, thereafter rising at £3/tonne p.a. until it
reaches £35.
- From 6 April 2003, National Insurance contributions are raised by
1.0% for both employees and employers. Employees will pay 11.0% on earnings
between £4,615-£30,940 p.a. and 1.0% on earnings above this
amount. The employers rate will rise from 11.8% to 12.8%.
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