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Darling lowers UK growth forecast Inheritance taxes cut for couples
(9 minutes later)
The UK's economy will grow at a slower rate than previously forecast in 2008, Chancellor Alistair Darling has said as he delivers the pre-Budget report. Chancellor Alistair Darling has raised the inheritance tax threshold for married couples to £600,000 - and said it will rise to £700,000 from 2010.
Mr Darling, who will also outline his spending plans, said growth would be 2%-2.5%, down 0.5% on predictions. To Tory jeers, he also pledged to close loopholes for private equity bosses and "non-domiciled" tax payers.
But he said the UK economy was strong enough to withstand turmoil in global markets and would bounce back in 2009. In his pre-Budget report and spending review he also pledged more money for schools and hospitals, but downgraded UK economic growth forecasts for 2008.
He pledged to close tax loopholes for private equity bosses and "non-doms" so they paid their "fare share". The Tories said it was a "pre-election budget without an election".
EXPECTED MEASURES Economy: Growth forecasts to be revised downTax: Inheritance tax thresholds may be increased. Private equity loopholes could be closedHealth: Spending growth to slow but more cash for family doctor services and hospital cleaningEducation: Rate of growth to slow to 2.5% annuallySecurity: Cash for extra Special Branch officersTransport: Details of £5bn Crossrail pledge unveiled last week class="" href="/1/hi/business/7026599.stm">Analysis: Tough times ahead Tighter spending
He said Tory plans to charge a flat rate of £25,000 on non-doms - people who register abroad for tax purposes - did not add up. Setting out his plans, Mr Darling said Tory plans to charge a flat rate of £25,000 on non-doms - people who register abroad for tax purposes - did not add up.
He said would consult on early legislation on non-domiciled taxpayers, as a first step introducing a charge after seven years, then a higher rate after 10. He said he would consult on early legislation on non-domiciled taxpayers, as a first step introducing a charge after seven years, then a higher rate after 10.
He also said he would prevent people claiming they are out of the country when they are actually here and from disguising income as capital. These measures will raise an average of £650m, he said. READ THE REPORT class="" href="http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/09_10_07_pbr_report.pdf">Pre-Budget Report and Comprehensive Spending Review 2007 in full [1.5MB] Most computers will open this document automatically, but you may need Adobe Reader
Mr Darling is also setting out the government's Comprehensive Spending Review, which he said "will be tighter for many departments". He also said he would prevent people claiming they were out of the country when they were actually in the UK - and from disguising income as capital. These measures would raise an average of £650m, he said.
Mr Darling also set out the government's Comprehensive Spending Review, which he said "will be tighter for many departments".
He said there would be an extra £400m for the armed forces, including cash for improved accommodation.He said there would be an extra £400m for the armed forces, including cash for improved accommodation.
On Tuesday morning Alistair Darling told the Cabinet that the economy remained strong and well positioned to deal with increased global economic uncertainty.On Tuesday morning Alistair Darling told the Cabinet that the economy remained strong and well positioned to deal with increased global economic uncertainty.
In an interview with the Financial Times last week, Mr Darling said there would undoubtedly be an effect on Britain from the "credit crunch" experienced in the US.In an interview with the Financial Times last week, Mr Darling said there would undoubtedly be an effect on Britain from the "credit crunch" experienced in the US.
Lower forecastsLower forecasts
Spending reviews detail how much money the government will put into schools, hospitals and other public services.Spending reviews detail how much money the government will put into schools, hospitals and other public services.
They normally outline plans for the following three years, but there is speculation that this year's could be more like 1998's, which set strategy for the following decade.
As chancellor, total obscurity is not an option for Alistair Darling BBC political editor Nick Robinson Read Nick's thoughts in full
The Treasury has already said it will consider the impact of such long-term issues as population and technological change, terrorism and pressure on natural resources.
In the last CSR, in 1998, health and education were earmarked as priorities and have received more money ever since.
When he succeeded Tony Blair as prime minister in June, Mr Brown said education was his "passion" and the NHS was his "priority".
But both can expect smaller spending increases than previous years.
'Gas guzzlers'
Mr Brown has already said that education spending in the UK will rise from £77.4bn in 2007/08 to £90bn by 2010/11.
Since 2002 the NHS has been given record annual funding increases of about 7%. There is speculation this will slow to between 3% and 3.5% by 2011/12.
HAVE YOUR SAY In a time of increasing global instability, defence spending needs to be a priority Bryan McC, UK Send us your commentsHAVE YOUR SAY In a time of increasing global instability, defence spending needs to be a priority Bryan McC, UK Send us your comments
The prime minister has already announced an extra £7.7bn for defence and some departments have agreed to a 5%-a-year real-terms cut over the CSR period - including HM Revenue and Customs and the Department for Work and Pensions. Mr Brown had already said that education spending in the UK will rise from £77.4bn in 2007/08 to £90bn by 2010/11.
There has been speculation that Mr Darling may look to introduce higher charges on "gas guzzlers", through road tax or a one-off charge. Since 2002 the NHS has been given record annual funding increases of about 7%. There is speculation this will slow to between 3% and 3.5% by 2011/12.
Mr Brown has also suggested there could be extra money to reduce child poverty. The prime minister had already announced an extra £7.7bn for defence and some departments have agreed to a 5%-a-year real-terms cut over the CSR period - including HM Revenue and Customs and the Department for Work and Pensions.