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Budget 2010 - Sound public finances


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Issued 24 march 2010

Sustainable public finances are essential for strong and sustainable economic growth.

In common with other nations, public borrowing in the UK has risen in the short  term, due for example to the impact of the recession on tax receipts. This borrowing has also helped finance the Government’s action to help the economy through the downturn. The Government will continue to provide targeted support to businesses and households during the early stages of the economic recovery. However, in the medium term the Government - like any business or household - must live within its means.

In autumn 2008, the Government set out that it would reduce the level of public borrowing. The plan is to halve the level of public borrowing as a share of the economy over four years. This plan is based on:

  • savings from reducing spending growth; taking tough decisions on public spending;
  • Budget 2010 sets out more detail on cuts and efficiencies and the medium-term path for public spending;
  • tax increases, with the biggest burden falling to those with the highest incomes; and
  • a return to sustainable growth in the economy

The Government has underpinned its commitment to sound public finances in new laws that place binding duty on the Government to meet this plan.

The following chart sets out the sources of Government receipts:

This pie chart sets out the source of government receipts. Total receipts: £541 billion, Comprising: Income tax: 146 billion; National Insurance: £97 billion; Excise duties £46 billion; Corporation tax: £42 billion; VAT: £78 billion; Business rates: £25 billion; Council tax: £26 billion; Other: £81 billion. Source: HM Treasury 2010-11 estimates. Other receipts include capital taxes, stamp duties, vehicle excise duties and some other tax and non-tax receipts – for example interests and dividends. Figures may not sum to total due to rounding.

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Article Published/Sorted/Amended on Scopulus 2010-03-25 10:51:23 in Economic Articles

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