![]() | |
Presented | 17 March 1998 |
---|---|
Parliament | 52nd |
Party | Labour Party |
Chancellor | Gordon Brown |
‹ 1997 1999› |
The 1998 United Kingdom budget (sometimes referred to as the Prudence with a purpose budget and officially titled New Ambitions for Britain) [1] [2] was delivered by Gordon Brown, the Chancellor of the Exchequer, to the House of Commons on 17 March 1998. It was the second budget to be presented by Brown following Labour's 1997 general election win, and sought to maintain the broad public support given to Labour in 1997 by announcing measures that would appeal to those who had voted the party into office. One of the key features of the 1998 budget was the Working Families Tax Credit, a benefit that could be claimed by families on low income. Brown also announced tax cuts for businesses, the launch of a £50m [lower-alpha 1] rural transport fund, and committed to taxing child benefit at a future date.
Titled New Ambitions for Britain, [2] and with "prudence as a purpose" as its narrative, [3] Brown's 1998 budget sought to strike a careful balance between maintaining Labour's broad appeal among the Middle England demographic who had voted for the party the previous year, thus helping Tony Blair to become prime minister, while offering help to those on low incomes. [4] His statement set out to achieve four objectives—stability, enterprise, welfare reform and strong public services. He told the House of Commons: "For decades, under Governments of both parties, the great economic strengths of our country have been undermined by deep-seated structural weaknesses—instability, under-investment, unemployment." He hoped to address this with a long-term plan for economic growth and success. [5]
He reported that the five-year plan to reduce the UK's deficit announced in his 1997 budget was being achieved at a faster rate than had been forecast, with the UK national debt having come down by £17bn, [lower-alpha 2] or 2% of national income, since July 1997. He expressed a need for caution, and said that he would "lock in this fiscal tightening" for 1998–99. As a consequence, borrowing, which the previous government had planned to be £19bn [lower-alpha 3] for 1998, was now forecast to be £5bn [lower-alpha 4] for 1998, a little under £4bn [lower-alpha 5] for 1999, and was expected to be in balance by 2000. On economic growth, Brown said it was dependent on "what happens to wage inflation over the coming year. It would be the worst of short-termism to pay ourselves more today at the cost of higher interest rates, fewer jobs and slower growth tomorrow. All of us must therefore show greater responsibility." He suggested wage inflation would slow growth from 2.5% to 2% in 1998, and similarly predicted percentage figures of between one and three quarters and two and a quarter for 1999, and between two and a quarter and two and three quarters for 2000. " [6]
While welcoming some aspects of the budget, notably measures to cut National Insurance and the help offered to small businesses, William Hague, leader of the Conservative Party, described many of the announcements as a betrayal of Britain. In particular, he cited the increase in fuel duty which would impact rural areas, and the announcement of future plans to tax child benefit which would have an impact on women and children. He also said it was now clear the government was not on the side of "the family that works hard and saves hard and tries to be independent of the state", and criticised delays in launching the 10p tax rate, which had been one of Labour's 1997 election manifesto pledges. [9] Paddy Ashdown, leader of the Liberal Democrats, gave the statement a much more positive reception, saying that in the long-term it could turn out to have been "rather good", but he criticised the government's over-reliance on inflation to control the UK economy and said not enough had been done to correct several years of under-funding of public services. [9] Similar concerns were also raised by Ed Davey, a Liberal Democrat Treasury spokesman, who felt investment in public services had been overlooked, and described it as "a disappointment". But he welcomed the announcement on National Insurance. [9] Iain Duncan Smith, the Shadow Secretary of State for Social Security, claimed the budget was "a devastating Budget for families". Giles Radice, chairman of the House of Commons Treasury Committee and himself a Labour MP, welcomed the spending announced for education and health, but said the budget maintained Brown's reputation as an Iron Chancellor. [9] Unison, one of the UK's largest trade unions, described the 1998 budget as "hard-edged with some compassion". [9]
Following the budget, Pound sterling rose to its highest level since 1989, prompting Evan Davis of BBC News to describe the statement as one "that largely ignored the macroeconomic fine-tuning of some predecessors" with consequences that "the markets take over, read it as too lax, assume interest rates have to rise, and send the pound to a nine year, unsustainable high". [10] Making reference to the "prudence with a purpose" theme, Paul Rowley, the BBC's Political Correspondent, suggested the budget had one purpose, "to win the next election. The delivery and language may have had the imprint of a dour Scot balancing the household finances. But there was the clear hand of the Prime Minister in what was a Downing Street co-production. Brown contributed the economics. Blair added the political nous". [3]
In the United Kingdom, taxation may involve payments to at least three different levels of government: central government, devolved governments and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England, Council Tax and increasingly from fees and charges such as those for on-street parking. In the fiscal year 2014–15, total government revenue was forecast to be £648 billion, or 37.7 per cent of GDP, with net taxes and National Insurance contributions standing at £606 billion.
Motoring taxation in the United Kingdom consists primarily of vehicle excise duty, which is levied on vehicles registered in the UK, and hydrocarbon oil duty, which is levied on the fuel used by motor vehicles. VED and fuel tax raised approximately £32 billion in 2009, a further £4 billion was raised from the value added tax on fuel purchases. Motoring-related taxes for fiscal year 2011/12, including fuel duties and VED, are estimated to amount to more than £38 billion, representing almost 7% of total UK taxation.
The June 2010 United Kingdom Budget, officially also known as Responsibility, freedom, fairness: a five-year plan to re-build the economy, was delivered by George Osborne, Chancellor of the Exchequer, to the House of Commons in his budget speech that commenced at 12.33pm on Tuesday, 22 June 2010. It was the first budget of the Conservative-Liberal Democrat coalition formed after the general election of May 2010. The government dubbed it an "emergency budget", and stated that its purpose was to reduce the national debt accumulated under the Labour government.
The 2011 United Kingdom budget, officially called 2011 Budget – A strong and stable economy, growth and fairness, was delivered by George Osborne, the Chancellor of the Exchequer, to the House of Commons on 23 March 2011.
The United Kingdom government austerity programme was a fiscal policy that was adopted for a period in the early 21st century following the Great Recession. Coalition and Conservative governments in office from 2010 to 2019 used the term, and it was applied again by many observers to Conservative policies from 2021 to 2024, during the cost of living crisis. With the exception of the Truss ministry, the governments in power over the second period did not formally re-adopt the term. The two austerity periods are separated by increased spending during the COVID-19 pandemic. The first period was one of the biggest deficit reduction programmes seen in any advanced economy since the Second World War, with the emphasis on shrinking the state, rather than fiscal consolidation as was more common elsewhere in Europe.
The 2012 United Kingdom budget was delivered by George Osborne, the Chancellor of the Exchequer, to the House of Commons on Wednesday 21 March 2012.
Gordon Brown served as Chancellor of the Exchequer of the United Kingdom from 2 May 1997 to 27 June 2007. His tenure was marked by major reform of Britain's monetary and fiscal policy architecture, transferring interest rate setting powers to the Bank of England, by a wide extension of the powers of the Treasury to cover much domestic policy and by transferring responsibility for banking supervision to the Financial Services Authority. Brown presided over the longest period of sustained economic growth in British history.
The October 2021 United Kingdom budget, officially known as the Autumn Budget and Spending Review 2021. A Stronger Economy for the British People, was a budget statement made by Chancellor of the Exchequer Rishi Sunak on 27 October 2021. It was the third and final consecutive budget delivered by Sunak before his resignation in July 2022.
The November 2022 United Kingdom autumn statement was delivered to the House of Commons on 17 November 2022 by Chancellor of the Exchequer Jeremy Hunt, after being delayed by three weeks from its original scheduled date of 31 October. The budget addressed the ongoing cost of living crisis, and saw the announcement of a five-year package of tax increases and spending cuts designed to steer the UK through recession. An economic forecast published on the same day by the Office for Budget Responsibility (OBR) stated the UK had entered a recession after experiencing two quarters of a shrinking economy, and predicted the UK's economy would shrink during 2023. A reduction in households' disposable income was also forecast.
The 1997 United Kingdom budget was delivered by Gordon Brown, the Chancellor of the Exchequer, to the House of Commons on 2 July 1997. It was the first budget to be presented by Brown during his tenure as Chancellor, and the first Labour budget to be presented since April 1979. The 1997 budget marked a significant change of direction in economic policy following Labour's election win in May 1997. Among the measures announced were a five-year plan to reduce the budget deficit, a £5.2bn windfall tax on recently privatised utilities which was to fund Labour's planned Welfare to Work scheme, and a reduction in VAT on fuel. The budget was welcomed by business, which viewed it as fiscally responsible, but it was greeted less warmly by the UK's utility providers.
The 1996 United Kingdom budget was delivered by Kenneth Clarke, the Chancellor of the Exchequer, to the House of Commons on 26 November 1996. It was Clarke's fourth budget, the last to be delivered during his tenure as chancellor, and the last budget to be presented by the Conservative government of John Major before the party was defeated by Labour in the 1997 general election. Prior to Clarke's budget statement being presented to the House of Commons, its contents were leaked to the Daily Mirror, which returned the document to the government but decided to print some of the details, thus helping Tony Blair, then the leader of the Opposition, to prepare his response. Clarke described his statement as one that outlined a "Rolls-Royce recovery – built to last" and predicted economic growth of 2.5% for 1997 and 3.5% for 1998, but Blair dismissed it as "a last-gasp budget of a government whose time is up".
The 1995 United Kingdom budget was delivered by Kenneth Clarke, the Chancellor of the Exchequer, to the House of Commons on 28 November 1995. It was Clarke's third budget, and one of the shortest budget speeches in modern history. In his statement, Clarke reduced the middle rate of income tax by 1p to 24p, and after announcing that his spending reductions for the previous year had exceeded expectations by more than £3bn, announced plans to increase spending on healthcare, education and policing. His budget was criticised by members of the Conservative Party for not including more tax cuts, while Shadow Chancellor Gordon Brown of the Labour Party dismissed it as "the 7p up, 1p down budget".
The 1994 United Kingdom budget was delivered by Kenneth Clarke, the Chancellor of the Exchequer, to the House of Commons on 29 November 1994. It was the second budget to be presented by Clarke since his appointment as chancellor the previous year, and its central focus was a planned £24bn worth of tax cuts. Clarke also renewed his commitment to increasing Value Added Tax (VAT) on fuel, but pledged to soften the impact this would have on pensioners. The statement took place shortly after the Party Whip had been withdrawn from eight Conservative backbenchers, leaving the government without a working majority, and amid questions about the future of John Major's leadership of the party. In response to the budget, Tony Blair, leader of the Labour Party, said it would be remembered as the "VAT on fuel budget".
The November 1993 United Kingdom budget was delivered by Kenneth Clarke, the Chancellor of the Exchequer, to the House of Commons on 30 November 1993. It was the second budget to be presented in 1993, and the first to be presented by Clarke following his appointment as Chancellor by Prime Minister John Major earlier that year. The November 1993 budget was also the first in the modern era to be held in the autumn, the government having decided to move the date of the budget so it could outline its tax and spending plans at the same time.
The 1992 United Kingdom budget was delivered by Norman Lamont, the Chancellor of the Exchequer, to the House of Commons on 10 March 1992. It was the second budget to be presented by Lamont. It was also the last before the 1992 general election, which was called the following day, and shaped the Conservative Party's election campaign for that year.
The 1987 United Kingdom budget was delivered by Nigel Lawson, the Chancellor of the Exchequer, to the House of Commons on 17 March 1987. It was the fourth budget to be presented by Lawson, and saw him announce tax cuts worth £2.6bn. He also forecast a £3bn reduction in government borrowing. Among his announcements were a reduction in the basic rate of income tax from 29% to 27%, and a reduction in Corporation Tax from 29% to 27%. The budget took place three months before the 1987 general election, which the Conservatives won. Neil Kinnock, leader of the Opposition Labour Party described it as a "bribes budget".
The 1983 United Kingdom budget was delivered by Geoffrey Howe, the Chancellor of the Exchequer, to the House of Commons on 15 March 1983. It was the final budget to be presented before the 1983 general election and the last to be presented by Howe. He announced a programme of tax cuts worth around £2bn for individuals and £750m for business, as well as increasing personal allowances by 14%, 8.5% above the rate of inflation. Social Security benefits were also raised. The Conservatives went on to win the election, but Howe would subsequently be replaced as chancellor by Nigel Lawson in a post-election cabinet reshuffle.
The 1982 United Kingdom budget was delivered by Geoffrey Howe, the Chancellor of the Exchequer, to the House of Commons on 9 March 1982. This was the fourth budget to be presented by Howe during his tenure as chancellor, and came at a time when unemployment had reached three million and the governing Conservative Party were unpopular in opinion polls. Howe painted a bleak picture of the UK economy and outlined a fairly neutral budget. As well as drawing criticism from the Leader of the Opposition, the statement was also condemned by the Conservative MP Ian Gilmour, who had advocated a reflation package worth £5bn. The budget was presented a few weeks before the Falklands War, an event that was to revive the Conservatives' fortunes.
The 1980 United Kingdom budget was delivered by Geoffrey Howe, the Chancellor of the Exchequer, to the House of Commons on 26 March 1980. It was the second budget to be presented by Howe since his appointment as chancellor the previous year, and was noted for the number of leaks that appeared in the press before it was delivered. There were broad reductions in public spending, but increases in spending on policing and the military. Prescriptions were increased from 45p to £1, while benefits for striking workers were cut. Labour Party leader James Callaghan, the Leader of the Opposition, called it the most divisive budget since 1931.
The March 2024 United Kingdom budget was delivered to the House of Commons by Jeremy Hunt, the Chancellor of the Exchequer, on 6 March 2024. It was the third budget presented by Hunt since his appointment as Chancellor, the last to be delivered during his tenure as chancellor and the last budget to be presented by the Conservative government of Rishi Sunak before the party was defeated by Labour in the 2024 general election.