Chancellor to choose the 'prudent course' for Britain

16 March 2005

Gordon Brown has unveiled his 2005 Budget, the ninth of his career as Chancellor of the Exchequer.

He opened his speech by saying that Britain was experiencing the longest period of sustained growth since records began in 1701.

Two million children and nearly two million pensioners were no longer trapped in poverty, said Mr Brown.

Employment was the highest ever and living standards had risen by three per cent a year since 1997.

The Chancellor revealed that 75 per cent of new investment went to schools, hospitals and public services.

He then moved on to his tax measures.

Mr Brown said corporation and capital gains tax would stay the same. There will be a one pence increase on a pint of beer, four pence on a bottle of wine and seven pence on a packet of 20 cigarettes.

Pension Credits and Child Benefits will rise - benefitting millions of families and elderly people.

He listed a series of measures to tackle tax avoidance as well as action against capital gains tax and VAT avoidance.

The stamp duty threshold on home purchases will be doubled to £120,000, he revealed, and the starting point for inheritance tax will rise to £275,000 this year with further increases to follow.

And he also announced a £200 council tax refund for pensioners - up from £50.

Mr Brown said he would 'lock in stability and put Britain's hard working families first', choosing 'the prudent course for Britain'.

• Read the Chancellor's speech (opens in new window)
• Watch the speech in Windows Media Player (opens in new window)
• Watch the speech in Realplayer (opens in new window)

Our other Budget 2005 stories

• Education 'key to economic success', says Chancellor
• Red tape for business slashed
• Economy 'continuing to grow strongly'

Extra information

The Budget is the annual financial statement and review of taxation levels.

The speech includes a statement of the Government's medium-term financial strategy and its short-term economic forecast.

This economic aspect of the Budget is important - taxes are imposed for their effect on the nation's economy as well as for raising revenue to meet expenditure for the year.

Useful websites

• HM Treaury Budget 2005 site (opens in new window)