Pre-Budget Report: The Key Points

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Indy Politics

PROPERTY

* A windfall tax is to be imposed on land receiving planning permission which local authorities will be able to spend on social housing, roads, schools and other amenities. Local authorities will also be expected to speed up planning consent for new housing, while the introduction of Real Estate Investment Trusts should make more funds available for development.

TAX CREDITS & COUNCIL TAX

* The Revenue will stop clawing back tax-credit payments from claimants from next year unless their incomes rise by more than £25,000. Currently, a £2,500 rise in income can prompt demands for repayment. Some £800m is also being made available to keep council tax bills down.

OIL AND GAS

* The freeze on fuel duty was extended for the full year, to help motorists hit by high petrol prices. However, the supplementary North Sea Charge on oil and gas firms will double to 20 per cent, raising an extra £2bn.

PENSIONERS

* An extra £300m has been set aside to help those receiving pension credit to install central heating and insulation free of charge. Other pensioners can get £175 towards insulation costs, while Mr Brown also pledged to keep winter fuel payments for pensioners at £200 a year for the rest of this Parliament, with pensioners over 80 receiving £300.

PENSION FUNDS

* Hopes among some investors that they would soon be able to invest their pension funds in second homes or more exotic investments such as fine wines were dashed when the Chancellor excluded residential property from self-invested pension plans (Sipps).

YOUTH OPPORTUNITIES

* An extra £53m is promised for youth opportunity funds to provide local authority amenities. Monies from dormant bank and building accounts will also go towards youth facilities, while a National Sports Foundation, along the lines of the Football Foundation, will also be set up.

RED TAPE

* Film companies will receive tax credits worth up to 20 per cent for small-budget productions, while the Chancellor also plans to make VAT payments for small firms more flexible. But a range of anti-avoidance measures were also announced, targetting in particular the use of artificial capital losses and of offshore schemes and trusts to avoid inheritance and other tax.

AID, TRADE AND WAR

* Another £580m has been set aside for the armed forces to cover the cost of waging war in Iraq and Afghanistan, while the anti-terrorism budget gets another £135m. Aid for trade rises to £100m, and £90m is set aside for IMF and UN emergency funds.

ECONOMY

* The Chancellor halved his forecast for growth this year to 1.75 per cent, down from earlier forecasts of 3 to 3.5 per cent, but he predicted that the economy would pick up again next year, with growth of 2.0 to 2.5 per cent in 2006. Public borrowing, meanwhile, will reach £37bn in 2005/6.

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