Gross domestic product looks set to grow by 2.75 per cent in 2006, against the Chancellor’s March forecast of 2 to 2.5 per cent. It is expected to grow by between 2.75 per cent and 3.25 per cent next year. The Government will borrow £36.8 billion this year, ahead of Gordon Brown’s revised £36 billion forecast in March. However, the figure looks set to fall to £22 billion by 2011, equivalent to a reduction from 2.3 per cent to 1.3 per cent of national income.

Air & Fuel Duty

The amount of duty paid by airline passengers will double from February 1. It will double on economy and premium class flights to Europe to £10 and £20 respectively, and double on longhaul economy and premium class to £40 and £80 respectively. Fuel duty increases by 1.25p a litre today, increasing the cost of filling the average family car by about 75p. Tax discounts for biofuels will be extended. The Chancellor vowed not to restore the “fuel duty escalator”.

Tax Credit

Child Tax Credit will rise by £80 to £1,845 a year from April next year, in line with the general pay increase trends.

Child Benefit

From April 2009 expectant mothers will qualify for Child Benefit payments from week 29 of their pregnancy. Women will be £200 better off with their first child and £130 better off with later births.

ISAs

Tax-free savings accounts — ISAs — will continue to exist beyond 2010. The tax-free status will remain and the structure of the programme will be simplified, scrapping the distinction between cash mini-ISAs and stocks and shares ISAs. The £7,000 savings limit is unchanged.

Household Spending

The cost of buying an average basket of household goods will rise by 2 per cent a year by mid-2007, in line with targets. The price of those goods will continue to increase at that target rate in 2008.

Stamp Duty

From next year, for a limited period, homebuyers buying a new-build home that is zero-carbon — so it meets the highest standard for energy efficiency — will not have to pay stamp duty. The move is part of Government plans to make every new home zero-rated for carbon emissions within ten years.

Housing

Plans to build 130,000 homes on brownfield sites.

Education

Head teachers will see an increase in the amount of cash that they receive direct from the Government, equivalent to about £200 per pupil. Investment in education will rise from £8.3 billion in 2007-08 to £10.2 billion in 2010-11. Investment will total £36 billion over the next four years. The Government is considering plans for bursaries worth £2,000 each, in an effort to ensure people in care can proceed to university. A push to boost innovation in British universities will see the Chancellor pump £60 million into applied research.

Defence

The Ministry of Defence sees its coffers swelled by £600 million to help to fund ongoing operations in Afghanistan and Iraq. An additional £84 million will be spent on intelligence and counter-terrorism, taking the security budget for 2007-08 to more than £2 billion.

Winter Fuel

Some 300,000 pensioners and vulnerable households will be granted free insulation and central heating.

Pension Credit

The Pension Credit, which seeks to guarantee a minimum income level for those over 60, will increase by £5 to £119.05 for single people and by £7.65 to £181.70 for couples. The basic state pension is on course to increase by 3.6 per cent in April.

Cultural Industries

Film-makers will qualify for tax relief from January 1, after the European Commission gave the go-ahead for the scheme. Trading Standards will be given an extra £5 million to tackle film and music piracy. Content users will get improved rights to copy material for their own use.

Infrastructure

An independent planning body will be given decision-making powers on major infrastructure projects.

Minimum Wage

Employers that fail to pay the national minimum wage will be liable for increased penalties from January .

Environment

People who generate their own energy, using a wind turbine for example, will pay no income tax on any surplus energy they sell to the National Grid.

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