Budget 2007 - Key Points

Here are what i consider to by the key headline points of today's budget. Further anaylsis to follow.

The Economy:

• UK economy growing faster than other G7 countries
• UK growth forecast at 2.5-3 per cent in 2008/9
• Inflation will fall this year to 2 per cent (from 2.8 per cent)
• For 2008/2009 inflation forecast on target
• UK has closed productivity gap with Japan and Germany, narrowed it with America and halved it with France
• UK has met "Golden Rule", with spending surplus of £11bn over economic cycle
• Debt from 2007-08 to 2012 forecast at 38.2, 38.5, 38.8, 38.8 and 38.6 per cent - meeting second fiscal rule
• Government borrowing to be £35bn this year - £24bn by 2012
• Budget to be broadly neutral in fiscal terms

Tax:

• Basic rate of income tax cut to 20p from 22p from April 2008
• Lower starter rate of 10p to go
• Top-rate income tax threshold to raise to £43,000, from £38,000
  Main corporation tax cut to 28p from 30p
• Tax rate on small companies to be raised from 20p this year to 22p in 2009.
• Pensioners tax-free allowance up to £9,770
• Inheritance tax will threshold to rise from £285,000 now to £350,000 in 2010.

Duty:

• Beer up 1p a pint, wine up 5p a bottle, duty on spirits frozen
• Cigarettes up 11p for a packet of 20

The Environment:

• Fuel duty up 2p a litre - rise delayed 6 months, until October
• Top-rate road tax up, eventually, to £400
• For most fuel-efficient cars, road duty cut to £35, from £50
• Up to £4,000 for home insulation for pensioners
• VAT reduced to 5 per cent for energy saving
• Landfill tax to rise by £8 a year
• No VAT rise on air travel
• Until 2012 all new zero carbon homes up to £500,000 will be exempt from stamp duty.

New Income:

• Asset sales to double to £36bn
• £6bn sale of student loan book
• Below inflation spending settlements for some departments: Work and Pensions; Revenue and Customs; Cabinet Office; Treasury; Department for Constitutional Affairs; Attorney General's Office.
• Efficiency savings of 3% each year to mean the government can release £26bn a year by 2010/11 for frontline services.

New Expenditure:

• Counter-terrorism services to get extra £86m
• Armed forces to get extra £400m this year
• NHS to get extra £8bn
• Education "to become a right" for everyone up to age 18
• All 125,000 people who lost their pensions because of company insolvency will get help with a financial assistance scheme increased from £2bn to £8bn.
• Cash Isa limit up to £3,600