09 November 1999

New Ambitions for Stability and Steady Growth

Chancellor Gordon Brown today set out the Government's strategy for enterprise and fairness where everyone can share in the benefits of economic success. Publishing the Pre-Budget Report today, the Chancellor set out four new economic ambitions for the next decade, based on a platform of stability:

Britain will raise its productivity faster than its competitors, as we close the productivity gap;
A higher percentage of people in employment than ever before;
A majority of Britain's school and college leavers to go on to higher education for the first time; and
Child poverty to be reduced by half, on the way to the Government's 20 year target to end child poverty.

The Pre-Budget Report updates forecasts on the economy and the public finances, and sets out the direction of economic policy and further measures that are under consideration in the run up to the 2000 Budget.

Stability and steady growth

Since the Government took office, the new monetary and fiscal frameworks have been delivering low inflation and sound public finances. The Government is determined to avoid the mistakes of the past and not return to boom and bust. The Government's latest economic forecast, published today, shows:

for this year, inflation remaining close to target; stronger GDP growth than expected in March at 1¾ per cent; and a current budget surplus of around 1 per cent of GDP;
in future years, the economy growing at close to trend rates with inflation at target, reinforcing the platform of stability necessary for lasting increases in output and employment.

Meeting the productivity challenge

Britain's productivity levels lag behind those of other major economies. Raising productivity performance is vital to meeting the Government's objective of delivering high and stable levels of growth and employment. Taking forward the Government's ambition to raise its productivity faster than its competitors within the next decade, and

building on Budget 99 measures, the Chancellor announced:

a consultation on a new package of Capital Gains Tax reform;
a £10 million package to boost enterprise skills in schools;
a £30 million package of measures to promote enterprise among disadvantaged groups;
further details of the new Enterprise Management Incentive and the All Employee Share Ownership Scheme.

The PBR also outlines a package of measures focussing on improving and extending IT skills, including a network of 1000 computer learning centres and 80 per cent discounts on computer literacy courses for holders of Individual Learning Accounts, and provision for 50,000 more people to study for basic qualifications in information technology.

Increasing employment opportunity for all

The Government's strategy is to move people from welfare to work, make work pay and ease the often difficult transition into work. The provision of employment and opportunity for all goes hand in hand with responsibilities and, alongside new measures to increase New Deal support for those aged 25 and over, new technologies will provide a more intensive and proactive job brokering service. Building on the New Deal programme, the Government today announced:

that it intends to intensify and extend the New Deal 25+ on a national basis from April 2001, building on the principles of the New Deal for the under 25s, and bringing the rights and responsibilities closer into line with those for young people. In preparation, from April 2000, the support available for those out of work for two years or more will be intensified;
setting up a national network of job-broking call centres to help employers fill the one million vacancies in the economy and help the unemployed move from welfare to work;
a national rollout of the Intensive Gateway Trailblazers within the New Deal for 18-24 year olds;
enhancements to the New Deal for Lone Parents, including inviting those on income support with children from the age of three to participate;
establishing a New Deal Intermediaries Fund to develop new and innovative ways to help the most disadvantaged back into work; and
funds for child care in further education, to look after 10,000 children, and thus help their parents study and improve their employability.

The hidden economy is a significant problem. A review tackling this, to be carried out by Lord Grabiner QC, was announced today. The review will report by the time of the Budget.

Fairness for families and communities

The Government is committed to building a fairer and more inclusive society. The Pre-Budget Report today sets out further measures to support families and communities

and deliver strong public services:

a new Children's Fund to support voluntary and community organisations in their work with children in poverty;
a further £150 million of spending on schools through the Private Finance Initiative and the New Deal for Schools;
free TV licences for people over 75 from Autumn 2000;
the extension of the 10p tax rate to savings; and
a new tax package to encourage individuals and businesses to give more to charity.

The Chancellor today announced a tough range of measures designed to crack down on tobacco fraudsters, including the compulsory marking of cigarette and tobacco packs to show that UK duty has been paid, a national network of container x-ray scanners to help detect shipments of smuggled tobacco hidden in commercial freight, and new offences and tougher penalties for those caught with smuggled tobacco.

There is a strong ongoing health case for year-on-year real terms increases in the price of cigarettes and tobacco. The Chancellor will in future form his Budget judgements on the appropriate level and timing of any increases taking into account a wide range of factors, including the Government's health objectives. Any additional revenue raised from real increases in tobacco duties in future would be spent on improved health care. For example, the extra revenue from a 5 per cent real terms rise in tobacco duty next spring would raise £300 million that would go to a further additional investment in the National Health Service from next April.

Protecting the environment

Today, the Chancellor announced further progress in meeting the Government's environmental objectives.

refinements to the climate change levy package will increase the environmental effectiveness of the levy, and deliver bigger carbon savings than the illustrative package outlined in Budget 99, whilst protecting business competitiveness.
increases in fuel duties since 1996 are estimated to produce carbon savings of between 1 and 2.5 million tonnes of carbon by 2010. The Government is committed to meeting its environmental targets. The time has now come to review the way that any increases in the fuel duty are determined. The Chancellor has, therefore, decided that the appropriate level of fuel duties will be set on a Budget by Budget basis, taking account of the Government's economic and social objectives as well as the UK's environmental commitments;
the Chancellor has decided that revenues from any real terms increases in fuel duties will, in future, go straight in to a ring-fenced fund for improving public transport and modernising the road network; and
the Government welcomes the enhanced package of voluntary measures from the Quarry Products Association but is concerned that it does not go far enough to address the environmental impacts of quarrying. The Government is minded to introduce an aggregates tax unless further negotiation with the quarrying industry can deliver an improved package of voluntary measures.

HM TREASURY PRESS OFFICE

If you have access to the Internet you can find this news release at http://www.hm-treasury.gov.uk/. Other Treasury material can also be found at this address.

© Crown Copyright

New Ambitions for Stability and Steady Growth

Related Links