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.