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Pre-budget report main points

6th Dec 2006
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Chancellor Gordon Brown has delivered his pre-budget report in the House of Commons.

Main points

10th consecutive year of economic growth

In the last two years, British second to US in competitiveness

PBR drives forward mission to meet global challenge so that British economy outperforms competitors

Growth in 0.7%, 0.7%, 0.7% in Q1,2,3

Business investment up 5.75%

Public borrowing for 2006 - £37bn

Inflation to remain at target in 2008

Productivity average since 1997 2.4%

Productivity per worker 3% ahead of Germany, halved gap with France, only G8 nation to narrow gap with US

2.5 million more jobs in UK. Employment higher in every region since 1997

ISAs exceeding 16m in contrast to 9m under tessas and PEPs

Britain will meet its fiscal rules in this economic session and the next

China challenge - in next decade competitive challenge more profound - China and India will capture half of world's growth

economies like ours have no choice but to out innovate competitors

make next scale of globalisation work for British people

new era of shared responsibility between public & private sector

new priority is world leading investments to move ahead of competitors - hospitals, education etc

bring together research capability of research facilities and universities - new fast track for research - commissioner to identify for Britain most useful areas for potential medical breakthroughs

Intellectual Property - tighten penalties for copying and piracy, individuals new right for personal use, help for small firms to protect trademarks

film industry - from Jan 1 2007 - introduce new film tax reliefs

avoidance - new rules for managed service companies

raise penalties for illegality over minimum wage - 50% increase in budget to monitor the minimum wage compliance

Skills - our aim by 2020 - 90% of adults to reach equivalent of 5 GCSEs, reforming underperforming colleges, ensuring economy has 5m more men and women with high level and professional graduates skills

after 2010 - new statutory entitlement to skills training may be provided

Digby Jones to advance agenda for employees taking more responsibility to train, employers more responsibility to take time off

earn to learn programme for people to gain graduate qualifications

child benefits payable to the poorest will rise to £64 per week in April

child benefit to be paid to every mother

action for third sector involvement in public services

norm will be three year funding for third sector organisations

children and disability, local regeneration review will report next year

consultation on how young people can do more to volunteers for 2012 Olympics in London

environmental challenges - since Stern review - 31 countries in EU & ETA signed up to emissions trading - our aim is to make London the world's leading centre for carbon trading

Norway & UK launching study for new infrastructure for carbon capture and storage under North Sea.

Carbon emissions from houses - next week set out plans to ensure within 10 years every new home will be a zero carbon home - first country to make commitment

newest zero carbon homes exempt from stamp duty

energy audits and low loans

basic pension rising by 3.6% and winter allowance, pension credit minimum allowance £5 for single people, £7.65 for couples

end of 2008 will have insulate an additional 2.7m homes

aviation - feb 1 - double air passenger duty - 70% of journeys it will rise from £5 to £10

vehicles - promote cleaner fuels - 20p per litre extended to include next generation of bio-diesal, consulting 40p duty discount for bio-gas and discounts for company cars

inflation rise in fuel 1.25p per litre from midnight tonight. Not restore the fuel duty escalator

Planning - Barker review - invest in sustainable infrastructure

consult on strategy decision on location and planning permissions made by independent planning body

early rulings on business tax, better approach to managing risk

new brownfield sites to raise number of new homes to 130,000 on surplus sites

£6m to fund operations in Iraq & Afghanisation, 44m to counter terrorism

golden rule / sustainable investment rule - rules are demanding, no other major economy meets these tules today - even after new commitment - current deficit falls to 15bn to 8bn and then 1bn

with overall surplus of £8bn we meet the golden rule and already on course to meet the rule in the next economic cycle

for first time for 4 decades no borrowing necessary to cover current spending

well placed to make decision and to meet long term priorities for public services and investments

each government department to review assets

Varney report - 400m released, free up resources for front line - reductions in budget for HMRC, Treasury

Release by 2011 for all priorities - additional £26bn a year

ensure front line services will have resources they need

we must not postpone or avoid essential investments UK must make in infrastructure and innovation

third fiscal rule - would have to cut spending by £28bn by this year alone - reject as would deny investment in education, health etc - leave Britain ill-equipped

capital investment in education will be 8.3bn in 2007 - long term plans for investment to rise

investment in transport will be 9.6bn next year

investment in housing will be nearly 8bn next year

spending review to 2011 will be based on planned capital investment in our country rising to 60bn in 2011

shows our commitment to modern roads, rail, schools, hospitals and communities

education - most important - implement skills recommendations

2020 - 500,000 apprentices

Train to gain - 100,000 now to 350,000 a year by 2011 - adult basic training

every child a reader programme - extended nationwide - special catch up tuition for those falling behind on reading

all children starting school at 5 will receive books free of charge to lift the reaching standards of young people

commit to year by year improvements in schools - spending settlement to 2011 - seperate annoucements for Wales, Scotland & NI

education investment in buildings etc - £1.5bn in 1997, will be £10.2bn by 2010

our goal is 12,000 new, refurbished schools

100 colleges rebuilt serving 1m students

able to meet both fiscal rules - release additional resources for coming year

April 2007 - 50,000 for every primary, 200,000 for secondary schools - £200 for every pupil - money I could use for tax cuts but I say invest in education first - could not be invested if had third fiscal rule

education first and now and into the future and I confirm this statement to the house.


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