Budget babble focuses on dream scenario

Article Abstract:

UK economic policy is affected by a number of constraints. There is little room for tax cuts due to the public sector borrowing requirement being higher than forecast. The deficit for the first five months of the financial year of 1995 to 1996 is 16.7 billion pounds sterling and is larger than anticipated by 4%. Bond markets would put pressure on the government through higher rates of interest if tax reductions are too large. The government is seeking to control public spending to create space for reductions in taxation.

Budget deficits

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Budget snapshot

Article Abstract:

Measures in the UK Nov 1995 Budget include a drop in taxes on spirit drinks of 4%. The threshold for inheritance tax has been raised to 200,000 pounds sterling in place of 154,000 pounds, coming into effect from April 1996. Interest from savings accounts will be taxed at 20% rather than 25% Employers' National Insurance contributions have been reduced to 10% from 10.2%. Small firms pay 24% corproation tax, a reduction of 1%. Companies have to register for value added tax when their turnover is 47,000 pounds sterling.

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UK budget: sound advice

Article Abstract:

The Confederation of British Industry (CBI) argues that UK taxes should not be reduced in the Nov 1995 budget unless public spending is also reduced. Interest rates would rise if taxes were reduced and public spending were not reduced enough, the CBI argues. The CBI also proposes a drop in corporation tax for small firms and an improvement in allowances for investment. Any reductions in personal tax should be geared to those on low pay, the CBI argues.

Confederation of British Industry

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