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1998 Budget at a glance

The 1998 Budget, "New Ambitions for Britain", is a Budget to help turn the ambitions of the many into achievements. It is a Budget which will secure economic stability, reward work, encourage enterprise and promote fairness for families and children.

The Budget will

secure economic stability:

• inflation target confirmed at 2½ per cent
• rapid progress towards achieving fiscal rules but still need to guard against risks to avoid return to "boom and bust".
• the Government will be legislating for a Code for Fiscal Stability
  
  

encourage work:

• New Deal to be extended to new groups excluded from the labour market
• major programme of tax and benefit reform to make work pay, including new Working Families Tax Credit and restructuring of employee and employer national insurance contributions (NICs)
• new help with costs of childcare through the tax system for lower and middle-income families, together with the other tax-benefit measure and minimum wage, will help people work their way up
• skills training package will help to tackle skill shortages
  
  

promote enterprise:

• corporation tax (CT) main rate cut for larger companies to 30 per cent and small companies' CT rate cut to 20 per cent
• small and medium sized companies will also benefit from exemption from move to quarterly payments
• capital gains tax reforms, including new long-term effective rate of 10 per cent on business assets will, along with CT changes, encourage long-term investment and growth of dynamic firms
• University Challenge fund to help commercially exploit university research
  
  

create a fairer society:

• significant boost to child benefit and childcare costs will help all families and tackle poverty
• main personal tax rates remain unchanged
• £500 million for health next year will cut hospital waiting lists
• £250 million extra for skills and schools next year will help to cut class sizes and modernise buildings and equipment
• environment package will improve air quality and reduce greenhouse gases
• £500 million transport package over two years, including a £50 million boost to rural bus services
• individual savings accounts, to be launched in April 1999, will extend savings habit to those on more modest incomes
• anti-avoidance package will help to ensure everyone makes a fair contribution to the tax base.

back to Budget 1998 index

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