National Policy Forum - Your Southeast CLP representatives

Pre-Budget Report, October 2007

The Pre-Budget Report sets out plans for spending over the following year, but is increasingly used to make policy and taxation announcements. This year’s statement made the headlines over proposals on inheritance tax in particular. Alistair Darling made the following announcements:

Personal Taxation:

Inheritance tax was reformed, allowing married couples and civil partners to double up on their tax allowance – from £300,000 to £600,000. By 2010, this will rise to £700,000.

Non-UK domiciled tax-payers will have to pay a flat charge of £30,000. This should raise £800m pa at first.

Business Taxation:

The taxes paid by private equity firms rose from 10% to 18% when capital gains tax taper relief was reformed.

Spending:

Public spending will continue to grow in real terms, although the rate will slow down.

Health
In the pre-budget report, the Chancellor announced that NHS spending will increase by 4% above inflation per year, raising it from £90bn now to £110bn per year in 2010.

Health research also received a boost, given the largest ever increase in government funding for health research.

Social care budgets also increased as local government revenue increased by £2.6bn pounds, and a green paper will be published on reforming social care, to try and establish a consensus for a new funding model.

Education

Spending will rise by 2.8% pa in real terms.

Every local authority will get a new or refurbished school, in a £200m programme.

There will also be an extra £250m for personalised learning assistance, providing personal tutors for all primary school children and extra help for those who need assistance with literacy and numeracy.

Crime

The counter-terrorism budget will rise by £1bn. The extra spending will be split between the police and the security services.

There will be extra funding for neighbourhood policing, to provide a neighbour police team in every part of the county.

Sustainable Communities

Transport funding will rise at 2.25% above inflation, to fund large infrastructure projects such as Crossrail, Thameslink, rebuilding Birmingham New St station and other rail projects.

Taxation on flights will change from being per passenger to per flight.

The government will work with the financial industry to try and provide long-term (10 year+) fixed rate mortgages.