Calendar of main economic events.
The Bank of England further liberalises the market for commercial borrowing.
Parliament passes the restructuring of local government finance in England and Wales with effect from April (following its implementation in Scotland a year earlier), including the replacement of domestic property levies by a community charge on adults and of business tax levies by a uniform business rate (with a five-year transitional period).
In its annual White Paper the government confirms public spending planning total of 179, 192 [pounds] and 203 1/2 billion between 1990/91 and 1992/93 as set out in the Autumn Statement. This is expected to allow increases in real terms while reducing the general government expenditure/GDP ratio overtime (excluding privatisation proceeds).
The government announces electricity price controls to cushion the impact of the industry's privatisation. However, the industry is to be compensated for having to use higher-cost nuclear electricity.
The Budget introduced to Parliament. Main points were:
i) With higher projections for debt interest payments and local authority
spending, general government expenditure projections are revised upwards
(by 2 1/2 [pounds] to 4 billion in the next three financial years) but planning total held
to the same level as in the Autumn Statement;
ii) New tax measures are expected to produce a net rise (the first since 1981) in
revenue of nearly 1/2 billion [pound] in 1990/91 and 1 billion [pound] in 1991/92, including
waiving the indexation of the threshold for higher incomes, raising excise
duties by more than the inflation rate and further increasing company car
tax. On the other hand, the government implements separate taxation of
spouses and proposes a range of measures to promote private savings (Tax
Exempt Special Savings Accounts - TESSAs - from January 1991, abolition
of composite rate tax on bank and building society deposit interest from
April 1991, abolition of stamp duty on securities transactions from the date a
new computerised share dealing system is introduced);
iii) Public sector debt repayment is put at 7 billion [pounds] (1 1/4 per cent of GDP) in
1990/91, 3 billion [pounds] in 1991/92, and projected at zero thereafter, with
privatisation proceeds constant in 5 billion [pounds];
iv) No target for broad money. Target range for narrow money (MO) growth
maintained at 1 to 5 per cent in 1990/91, with a falling trend thereafter.
Reconfirmation of the government's Commitment to take sterling into the
exchange rate mechanism of the EMS once a variety of conditions have been
Local government to receive an extra 3 billion [pounds] from the central government to lessen the effect of the community charge, plus 1.25 billion [pounds] to cover transitional relief.
Annexation of Kuwait announced by Iraq.
The promotion of the privatisation of 12 regional electricity companies in England and Wales begins.
Chancellor announced "Trinidad terms" initiative for poorest, most heavily indebted countries.
The Chancellor announces that sterling will join the ERM from 8 October at a central rate of 1 [pound] - DM2.95, with fluctuation margins of [+ or -]6 per cent. The base rate is reduced concurrently by 1 percentage point to 14 per cent.
The Autumn statement revises down the PSDR for FY 1990/91 from 7 billion [pounds] to 3 billion [pounds]. New public spending plans are at set at 200, 215, 226 billion [pounds].
Margaret Thatcher resigns.
John Major becomes Prime Minister. Norman Lamont is made Chancellor of the Exchequer.
Fifty-seven hospitals and other units become self-governing NHS trusts.
The base rate is reduced twice by 1/2 per cent, bringing it to 13 per cent.
Publication of a supplement to the 1990 Autumn Statement together with a set of 19 Departmental Annual Reports to replace the public expenditure White Paper.
The March budget sets the PSBR for FY 1991/92 at 8 billion [pounds]. The budget includes measures to reduce the headline community charge per capita by 140 [pounds], with an offsetting increase in VAT from 15 to 17.5 per cent. Other measures include an increase in child benefit and plans to index it, as well as personal and age-related allowances; restrictions on mortgage interest relief to the basic income tax rate, and extension of national insurance to benefits in kind from company cars.
The base rate is lowered in late March by a 1/2 per cent to 12 1/2 per cent.
The base rate is lowered by 1/2 per cent in mid-April to 12 per cent.
The government announces consultation on proposals to replace the community charge by a council tax from April 1993, consisting of a property tax with seven valuation bands, with a discount for people living alone.
The base rate is cut by 1/2 per cent to 11 1/2 per cent.
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|Title Annotation:||Annexes; Great Britain|
|Publication:||OECD Economic Surveys - United Kingdom|
|Date:||Aug 1, 1991|
|Previous Article:||The United Kingdom international cost competitiveness.|