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Historic
rises in taxation and public spending
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Budget
2002 gave Chancellor Gordon Brown a platform to stake the future of the
Labour government on a historic rise in taxation and public spending.
His tax-raising strategy is aimed at generating up to £8.3bn a year for
the government's coffers.
Health spending in Britain will now be brought into line with the European
average, the Chancellor promised, as he pledged to increase cash spending
on the National Health Service by £40bn a year by 2007-08 - a 43 per cent
rise in real terms.
Most of the extra tax will come from increasing National Insurance contributions,
which from next year will go up by 1p in the pound for employees, employers
and the self-employed.
This change in the NI system means that businesses have the additional
burden of an unexpected increase of 1 per cent payable on employers' National
Insurance contributions. Employees, too, will have to pay an extra 1 per
cent on all income above £89 a week.
But there were tax cuts too, the biggest being the new child tax credit,
worth up to £2.45bn next year. Families with children, on household incomes
of up to £58,000 a year, will be eligible to receive a minimum of £800
a year. |
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The
Budget 2002 proposals are subject to amendment before the Finance
Act receives Royal Assent. This Budget 2002 Focus publication
is for guidance only, and professional advice should be obtained
before acting on any information contained herein. We cannot accept
any responsibility for any errors or omissions it might contain
or any loss occasioned as a result of action or in action based
on the publication's content. The information provided is for
general information in respect of the topics covered.
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