The June 1979 United Kingdom budget was delivered by Geoffrey Howe, the Chancellor of the Exchequer, to the House of Commons on 12 June 1979. It was Howe's first budget and the first of the first Thatcher ministry, which had been elected a few weeks earlier. It was also the second budget to be delivered to Parliament in 1979. The budget marked a major change in direction for the UK economy, with an increase in reliance on interest rates and monetary policy to control inflation. It is also noted for its introduction of substantial tax cuts, such as reducing the top rate of income tax from 83% to 60% and the basic rate from 33% to 30%. The budget also saw an increase in VAT from 8% to 15%.[1]
The Conservative Party had pledged to reduce taxes while campaigning in the 1979 general election. At the time the United Kingdom's public borrowing deficit was approaching £10bn.[2] The party's election manifesto for that year stated "We shall cut income tax at all levels...a gradual reduction in the size of the Government's income requirement is vital...any future government which sets out to reduce inflation and taxation will have to make substantial economies".[3] Following the Conservatives' election, the budget was held on 12 June. It heralded a significant change in direction for the UK economy, with an increase in reliance on interest rates and monetary policy to control inflation.[1]
Key points
VAT raised from 8% on most goods (12.5% on luxury goods) to a single rate of 15%
Basic rate of income tax cut from 33% to 30%; top rate cut from 83% to 60%
Government sets a long term target of 25% income tax rate
Howe's decision to raise VAT was highlighted by the government's critics, who cited the Conservatives' rejection of a pre-election Labour Party press release that had claimed VAT would be doubled if the Conservatives were elected.[1]
The Conservatives reduced the basic rate of income tax to 25% in 1988.[1]
References
^ abcde"Budgets 1979–1992". BBC. Retrieved 19 November 2022.
^Ilersic, A. R. (19 November 1979). "The U.K. Budget, June 1979". Canadian Tax Journal. 27: 277. Retrieved 19 November 2022.
^"Nationwide: The Conservative Budget – BBC One – 12 June 1979". BBC Genome. BBC. Retrieved 20 November 2022.
March 03, 2023
june, 1979, united, kingdom, budget, delivered, geoffrey, howe, chancellor, exchequer, house, commons, june, 1979, howe, first, budget, first, first, thatcher, ministry, which, been, elected, weeks, earlier, also, second, budget, delivered, parliament, 1979, b. The June 1979 United Kingdom budget was delivered by Geoffrey Howe the Chancellor of the Exchequer to the House of Commons on 12 June 1979 It was Howe s first budget and the first of the first Thatcher ministry which had been elected a few weeks earlier It was also the second budget to be delivered to Parliament in 1979 The budget marked a major change in direction for the UK economy with an increase in reliance on interest rates and monetary policy to control inflation It is also noted for its introduction of substantial tax cuts such as reducing the top rate of income tax from 83 to 60 and the basic rate from 33 to 30 The budget also saw an increase in VAT from 8 to 15 1 1979 1979 United Kingdom budgetPresented12 June 1979Parliament48thPartyConservative PartyChancellorGeoffrey Howe April 19791980 In his budget speech Howe told the House of Commons we cannot go on avoiding difficult choices 1 Contents 1 Background 2 Key points 3 Reaction 4 ReferencesBackground EditThe Conservative Party had pledged to reduce taxes while campaigning in the 1979 general election At the time the United Kingdom s public borrowing deficit was approaching 10bn 2 The party s election manifesto for that year stated We shall cut income tax at all levels a gradual reduction in the size of the Government s income requirement is vital any future government which sets out to reduce inflation and taxation will have to make substantial economies 3 Following the Conservatives election the budget was held on 12 June It heralded a significant change in direction for the UK economy with an increase in reliance on interest rates and monetary policy to control inflation 1 Key points EditVAT raised from 8 on most goods 12 5 on luxury goods to a single rate of 15 Basic rate of income tax cut from 33 to 30 top rate cut from 83 to 60 Government sets a long term target of 25 income tax rate Reductions in public spending announced Interest rates increased from 12 to 14 Prescription charges increased from 20p to 45p A major relaxation of exchange controlsReaction EditHowe s decision to raise VAT was highlighted by the government s critics who cited the Conservatives rejection of a pre election Labour Party press release that had claimed VAT would be doubled if the Conservatives were elected 1 The Conservatives reduced the basic rate of income tax to 25 in 1988 1 References Edit a b c d e Budgets 1979 1992 BBC Retrieved 19 November 2022 Ilersic A R 19 November 1979 The U K Budget June 1979 Canadian Tax Journal 27 277 Retrieved 19 November 2022 Nationwide The Conservative Budget BBC One 12 June 1979 BBC Genome BBC Retrieved 20 November 2022 Retrieved from https en wikipedia org w index php title June 1979 United Kingdom budget amp oldid 1130136071, wikipedia, wiki, book, books, library,
