1995 United Kingdom budget: Difference between revisions

 

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==Overview==

==Overview==

Clarke opened his third budget by declaring that the [[Economy of the United Kingdom|UK economy]] had now been growing for almost four years, with an additional half a million jobs created since the [[Early 1990s recession|recession at the beginning of the 1990s]] and the UK having more of its people in employment than any other country with in the [[European Union]]. The [[International Monetary Fund]] was forecasting Britain would be joint top with Germany for growth among the [[G7]] nations, and inflation was at its lowest for 50 years and on target to reach 2.5% by the end of [[51st Parliament of the United Kingdom|the current parliament]]. The economy had grown by 4% in 1994–95, and was forecast to grow by 2.75% for 1995–96 and 3% for 1996–97. It was also unaffected by the world economic slowdown that had occurred during 1995. Manufacturing had grown by 12% over the past year, and [[consumer spending]] was also expected to grow. The [[public sector borrowing requirement]] was forecast to be £29bn{{efn|about £{{inflation|UK|29|1995|2021}}bn at 2021 prices}} for 1995–96, £7bn{{efn|about £{{inflation|UK|7|1995|2021}}bn at 2021 prices}} less than had been predicted in the [[1994 United Kingdom budget|1994 budget]], and £16bn{{efn|about £{{inflation|UK|16|1995|2021}}bn at 2021 prices}} less than forecast in the budget of November 1993. On government plans to reduce public spending to 40% of national income, Clarke said that it stood at 42% for the present year, and was on course to reach the government’s target by 1997–98; £53bn{{efn|about £{{inflation|UK|53|1995|2021}}bn at 2021 prices}} had been taken out of public spending since Clarke had become chancellor.{{Cite web|url=https://johnmajorarchive.org.uk/1995/11/28/text-of-the-1995-budget-28-november-1995/|title=Text of the 1995 Budget – 28 November 1995 – The Rt. Hon. Sir John Major KG CH|accessdate=10 December 2022}}

Clarke opened his third budget by declaring that the [[Economy of the United Kingdom|UK economy]] had now been growing for almost four years, with an additional half a million jobs created since the [[Early 1990s recession|recession at the beginning of the 1990s]] and the UK having more of its people in employment than any other country with in the [[European Union]]. The [[International Monetary Fund]] was forecasting Britain would be joint top with Germany for growth among the [[G7]] nations, and inflation was at its lowest for 50 years and on target to reach 2.5% by the end of [[ of the United Kingdom|the current parliament]]. The economy had grown by 4% in 1994–95, and was forecast to grow by 2.75% for 1995–96 and 3% for 1996–97. It was also unaffected by the world economic slowdown that had occurred during 1995. Manufacturing had grown by 12% over the past year, and [[consumer spending]] was also expected to grow. The [[public sector borrowing requirement]] was forecast to be £29bn{{efn|about £{{inflation|UK|29|1995|2021}}bn at 2021 prices}} for 1995–96, £7bn{{efn|about £{{inflation|UK|7|1995|2021}}bn at 2021 prices}} less than had been predicted in the [[1994 United Kingdom budget|1994 budget]], and £16bn{{efn|about £{{inflation|UK|16|1995|2021}}bn at 2021 prices}} less than forecast in the budget of November 1993. On government plans to reduce public spending to 40% of national income, Clarke said that it stood at 42% for the present year, and was on course to reach the government’s target by 1997–98; £53bn{{efn|about £{{inflation|UK|53|1995|2021}}bn at 2021 prices}} had been taken out of public spending since Clarke had become chancellor.{{Cite web|url=https://johnmajorarchive.org.uk/1995/11/28/text-of-the-1995-budget-28-november-1995/|title=Text of the 1995 Budget – 28 November 1995 – The Rt. Hon. Sir John Major KG CH|accessdate=10 December 2022}}

With the prospect of a general election in the not too distant future, pressure was mounting on the chancellor to deliver a budget that would please potential Conservative voters. Some MPs from the right of the party were calling for him to implement tax cuts, while at the same time public services were coming under financial pressure. Clarke ultimately delivered a budget that he described as “sensible” in which he increased spending on health, education and policing, while also cutting the basic rate of income tax by 1p and raised the 20p lower-rate band by £700, meaning that 6 million taxpayers would only pay tax at the 20p rate. He told the House he did not want to “do a Budget just for the next day’s headlines”, while saying of the increase in spending for public services, “I think people wanted me to spend more money on hospitals, more money on schools, more money on the police service”.{{Cite…