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Brown cuts basic tax rate by 2p Brown cuts basic tax rate by 2p
(10 minutes later)
Gordon Brown is cutting the basic rate of income tax by 2p to 20p from April 2008 in a surprise move at the end of what is likely to be his last Budget.Gordon Brown is cutting the basic rate of income tax by 2p to 20p from April 2008 in a surprise move at the end of what is likely to be his last Budget.
But the chancellor also scrapped the 10p lower rate, which means most people are unlikely to be better off.But the chancellor also scrapped the 10p lower rate, which means most people are unlikely to be better off.
He also cut corporation tax from 30p to 28p, while this year's 2p fuel duty rise will be delayed for six months.He also cut corporation tax from 30p to 28p, while this year's 2p fuel duty rise will be delayed for six months.
Duty on beer and cider rises 1p a pint, wine 5p and cigarettes 11p. Road tax on "gas guzzlers" rises to £300 this year.Duty on beer and cider rises 1p a pint, wine 5p and cigarettes 11p. Road tax on "gas guzzlers" rises to £300 this year.
BUDGET HIGHLIGHTS 2p off basic rate of income tax10p starter rate abolished 2p cut in corporation taxGas guzzling car duty up to £300 this year and £400 next Beer and cider up 1p, wine 5p, spirits duty frozen11p on cigarettes2p petrol increase frozen for six months Budget at-a-glance
Mr Brown also cut VAT from 17.5% to 5% on nicotine patches and similar products and said duty on spirits was being frozen.Mr Brown also cut VAT from 17.5% to 5% on nicotine patches and similar products and said duty on spirits was being frozen.
Conservative leader David Cameron said Mr Brown was "the Chancellor who has taken one tax down but put 99 up". Conservative leader David Cameron said Mr Brown was "the chancellor who has taken one tax down but put 99 up".
READ THE REPORT class="" href="http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/21_03_07_budget_report.pdf">Budget 2007 in full [1.76MB] Most computers will open this document automatically, but you may need Adobe Reader Liberal Democrat leader Sir Menzies Campbell said it was "a budget of missed opportunities" and abolishing the 10p starting tax rate income tax would be increased for many people.
"We are asking the poor to subsidise the rich," Sir Menzies told MPs.
Assets sales
Mr Brown told the Commons the British economy was growing, alongside the US, faster than all the other G7 economies - between 2.5% to 3% for 2008 and 2009.Mr Brown told the Commons the British economy was growing, alongside the US, faster than all the other G7 economies - between 2.5% to 3% for 2008 and 2009.
In this economic cycle, current spending and revenues show a surplus of £11bn, which the chancellor said met his Golden Rule. He said: "This is a Budget to expand prosperity and fairness for Britain's families - and it is built on the foundation of the longest period of economic stability and sustained growth in our country's history."
Mr Brown said: "My report to the country is of rising employment and rising investment; continuing low inflation, and low interest and mortgage rates. READ THE REPORT class="" href="http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/21_03_07_budget_report.pdf">Budget 2007 in full [1.76MB] Most computers will open this document automatically, but you may need Adobe Reader
"This is a Budget to expand prosperity and fairness for Britain's families - and it is built on the foundation of the longest period of economic stability and sustained growth in our country's history."
He said more cash would be made available for public services from efficiency savings and the £36bn sale of government assets, ahead of the publication of the Comprehensive Spending Review, which will take place in the autumn rather than July as previously expected.He said more cash would be made available for public services from efficiency savings and the £36bn sale of government assets, ahead of the publication of the Comprehensive Spending Review, which will take place in the autumn rather than July as previously expected.
For the coming year, cash for investment and reform in the NHS in England will rise by £8bn, said Mr Brown.For the coming year, cash for investment and reform in the NHS in England will rise by £8bn, said Mr Brown.
In the whole of the UK, total additional NHS expenditure to rise by almost £10bn, he said.In the whole of the UK, total additional NHS expenditure to rise by almost £10bn, he said.
Intelligence and counter-terrorism will receive an additional £86m for the coming year.Intelligence and counter-terrorism will receive an additional £86m for the coming year.
Prime minister
He announced what he said was a 25% increase in science funding.He announced what he said was a 25% increase in science funding.
Budget changes will be broadly neutral for public finances.Budget changes will be broadly neutral for public finances.
In this economic cycle, current spending and revenues show a surplus of £11bn, which the chancellor said met his Golden Rule.
HAVE YOUR SAY Whatever happens, one thing will be the same: The UK is becoming far too expensive to live in. Ali, Machynlleth Send us your comments Cameron: Brown 'in deep hole'
Mr Brown is seeking to regain the initiative after a senior civil servant accused him of "Stalinist ruthlessness".Mr Brown is seeking to regain the initiative after a senior civil servant accused him of "Stalinist ruthlessness".
Mr Brown was reported to be "incandescent" with rage after the criticism from former head of the civil service, Lord Turnbull on Tuesday.Mr Brown was reported to be "incandescent" with rage after the criticism from former head of the civil service, Lord Turnbull on Tuesday.
HAVE YOUR SAY Whatever happens, one thing will be the same: The UK is becoming far too expensive to live in. Ali, Machynlleth Send us your comments What has Brown achieved?
It is expected to be the chancellor's final budget - if he takes over from Tony Blair, as expected, within the next few months.It is expected to be the chancellor's final budget - if he takes over from Tony Blair, as expected, within the next few months.
Mr Blair has said he will step down by September, and is expected to announce his resignation shortly after the Scottish and Welsh elections on 3 May.Mr Blair has said he will step down by September, and is expected to announce his resignation shortly after the Scottish and Welsh elections on 3 May.