§ As the Budget creates a better deal for those starting out, the Budget will today provide a better deal for all those who have worked hard all their lives: the elderly. Today, I am announcing new measures that will help all pensioners—help for those who are poor, for those with incomes above benefit level but who are not wealthy, indeed for every retired person and every retired couple, taxpayers and non-taxpayers alike: a better deal in the minimum pension guarantee, in the winter allowance, and on savings and tax.185
§ This Government created the minimum income guarantee for pensioners. Today, I can confirm that, next April, that minimum guarantee will be increased not just in line with prices but in line with earnings. As a result of the changes we are making, the minimum income guarantee for the single pensioner will be £78 a week— which is nearly £500 a year, or £10 a week, higher than when the Government came to office.
§ Pensioner couples will have a minimum income guarantee of over £120 a week—which is nearly £800 a year, or £16 a week higher than in 1997.
§ As a result of measures already taken—our cut in VAT on fuel, with tougher regulation and the winter allowance—pensioners are saving £108 on their fuel bills; the poorest pensioners have been saving £140.
§ But I can announce today that we will do more.
§ The winter allowance is currently paid to all 8 million elderly households, at £20.
§ I have decided to raise it to £100 for all 8 million elderly households.
§ And this is not a one-time need or a one-time decision. In future years, the winter allowance will be £100 for all 8 million elderly households.
§ To help the elderly to get more out of their savings, I have asked National Savings to issue a new National Savings pensioners bond. With the shorter-term deposits that pensioners seek, the new bond will offer the returns that pensioners need.
§ I have a further improvement: a tax cut for the elderly. I am announcing a reform that will ensure that a total of 7 million elderly men and women will now be outside the income tax system.
§ For pensioners, I have decided to raise the personal tax allowance in excess of inflation.
§ Single pensioners will not pay any tax until they have an income of £5,720. Older pensioner couples who both use their personal allowances to the full will now not pay tax until they have income above £15,000.
§ Therefore, 200,000 more pensioners will not have to pay income tax.
§ In total, two thirds of pensioners will now not pay income tax.
§ Taken together, the measures I have already announced add up to an additional £3 billion for the elderly—a better deal for the elderly that makes the typical pensioner household £240 a year better off.
§ To help pay for that, from today, excise duty on tobacco will rise by the normal escalator: 5 per cent. above inflation. Organised smuggling, which is now a £1(½) billion a year racket, will not be permitted to undo a policy on cigarettes that successive British Governments have adopted for good and urgent health reasons. As the Government strengthen their anti-smuggling strategy, we will target new resources to detect, prevent and punish this costly form of organised crime.
§ And I had a decision to make on beer and spirits. I have decided to freeze the duty on spirits, on beer and on wine at its current level. There will be no tax rise on alcohol this side of the millennium.186
§ I will cut the tax on pools from 28 March by one third from 26.5 per cent. down to 17.5 per cent. On this basis, the pools companies have agreed future funding of around £20 million a year for the Football Trust and the Foundation for Sport and the Arts. Details of this, of minor duty changes and of measures to combat tax avoidance are published this afternoon.
§ Insurance premium tax will rise by lp in the pound from 1 July, although 80 per cent. of insurance underwritten in Britain will remain exempt.
§ On VAT, today I propose there will be no increase in rates and no extension of VAT.
§ I have decided to make no change to stamp duty on property sales up to £250,000. For property sales above that, the rates will be raised by ½ per cent. from next Tuesday. Ninety six per cent. of home sales are unaffected.
§ I now turn to our review of charities. A Britain of strong families is also a Britain of strong communities.
§ Each year, more than 1 million people give up their time in voluntary work.
§ Millions more give money to our national charities.
§ The Prime Minister has rightly called for our age to become a giving age.
§ I want to mark the millennium in the best way by making 2000 the giving year.
§ In the last Budget, we introduced millennium gift aid.
§ For every £100 a British citizen donates to third world causes before the end of the year 2000, the Government will contribute £30.
§ When millennium gift aid is launched on 18 March, I urge British people to give more to those who have too little.
§ As Governments make their contribution to third world debt relief, all of us can make a contribution to third world poverty relief.
§ Today, in our consultation document on tax and charities, we propose extending the tax advantages of millennium gift aid. We propose that every charity, national and international, should be able to benefit from this new tax relief.
§ We propose in future for every £100 a British citizen donates to any charity, through tax relief the Government will contribute £30.
§ Instead of charities seen in the old way, the rich bestowing favours on the poor, I want a democracy of giving where all those who can, help all those who cannot.