Gordon Brown, the UK chancellor of the exchequer, on Wednesday delivered his sixth Budget. Here are the main points of his speech:

FORECASTS

• Growth:

• Economic growth, which was 2.2 per cent last year, is expected to be 2-2.5 per cent this year, rising to 3-3.5 per cent next year.

• Household consumption is forecast to rise by 3-3.5 per cent this year and 2.25-2.75 per cent in 2003.

• The Treasury has increased its estimate of Britain's long-term trend rate of growth to 2.75 per cent from 2.5 per cent.

• This allows it to raise its "cautious case" scenario for growth, which it uses when balancing the public finances, to 2.5 per cent from 2.25 per cent.

• Inflation:

  • Underlying inflation, which averaged 2 per cent in the final quarter of last year, is expected to rise to an average of 2.25 per cent by the final quarter of this year and 2.5 per cent - the government's target - by the end of next fiscal year.

• Spending:

  • Spending, which excludes investment, will rise from £367.4bn in 2001-02 to £390bn in 2002-03, £420bn in 2003-04, £444bn in 2004-05, £471bn in 2005-06 and £495bn in 2006-07.

  • Net investment will rise from £12bn in 2001-02 to £27bn by 2006-07.

• Public debt:

  • Public sector net borrowing is set to rise from £1.3bn in 2001-02 to £11bn in the coming fiscal year, £13bn by 2003-04 and £18bn by 2006-07.

  • But public sector net debt will change little as a proportion of gross domestic product, rising from 30.4 per cent in the fiscal year just ended to 31 per cent by 2006-07.

BUSINESS

• Small companies:

  • The small company tax rate will be cut from 20p to 19p, with immediate effect.

  • Small companies with taxable profits of up to £10,000 will pay no corporation tax.

• Corporation tax:

  • Companies will be exempt from tax on gains from the sale of substantial shareholdings, saving £150m a year.

• Capital gains tax:

  • Capital gains tax will be cut to 20 per cent for business assets held for one year or more instead of four years previously, and to 10 per cent for assets held for more than two years.

• Research and development:
  • There will be a volume-based R&D tax credit for large businesses set at 25 per cent, worth a total of £400m.

• Intellectual property:

  • Business will save £200m a year from the modernisation of intellectual property tax.

• VAT payments:

  • There will be a new flat rate calculation of VAT payments for the 500,000 companies with turnover of less than £100,000 a year, to be extended to businesses with revenues of up to £150,000 next April.

• VAT fines:

  • Fines imposed by the Customs & Excise for late VAT payments will be abolished for 700,000 small businesses, while approved companies will be allowed to defer paying VAT on imports until they submit their VAT return.

  • Small businesses will also be able to recover VAT on bad debts after six months.

• Training schemes:

  • To help recruit staff the government will spend £13m on a pilot scheme to provide free training courses and support for wage costs in return for staff being given time off to acquire new skills.

• UK divisions:

  • Change in treatment of capital for UK branches of foreign companies, bringing in an extra £350m a year.

INCOME TAX

• Personal allowance:

  • The personal allowance for 2003-04 will be frozen at £4,615.

NATIONAL INSURANCE

• Extra contributions:

  • From next April there will be an additional 1 per cent national insurance contribution from employees, employers and the self-employed on earnings above £4,615.

  • The ceiling of £30,420 on contributions remains.

INHERITANCE TAX

• Threshold:

  • The level at which estates become elegible for capital gains tax will increase from £242,000 to £250,000.

EDUCATION

• Capital investment for schools:

  • Every school will receive additional payments for capital investment, with the typical secondary school allocation rising from £98,500 last year to £114,000 and the typical primary school receiving £39,300, up from £33,750.

HEALTH

• Spending:

  • Over the next five years health spending will rise by 43 per cent after inflation, from £65.4bn this year (7.7 per cent of national income) to £72.1bn next year.

  • Then in successive years to £79.3bn, £87.2bn, £95.9bn, to hit £105.6bn (9.4 per cent of national income) by 2007-08.

• Incentives and reform:

  • Further health measures will be announced today including financial incentives for hospital performance; greater freedom for high-performing hospitals and trusts; reform of social services care for the elderly; and initiatives to increase patient choice.

• Inspection:

  • Independent audit and inspection measures, as well as independent scrutiny of patient complaints, to be introduced.

EMPLOYMENT

• Long-term unemployed:

  • The Step-Up scheme, introduced in 20 unemployment hot spots by December, will oblige the long-term unemployed to accept a guaranteed job.

  • In London and selected cities mandatory work preparation courses will be introduced for the long-term unemployed.

FAMILIES

• Families

  • A family tax cut worth £2.5bn that will help nearly 6m families to be introduced, taking the direct tax burden on a family with two children and average earnings below 20 per cent.

• Children

  • There will be a child tax credit for all families earning up to £58,00 a year, and up to £66,000 for the first year of a child's life.

  • For families with total incomes of less than £50,000 the child tax credit will be worth £1,400 a year for the first child.

  • For families earning £50,000-£58,000, credit will be £800-£1,400.

• Maternity

  • Statutory maternity pay will rise from £75 a week to £100 a week (or 90 per cent of previous earnings if that is lower) and be extended from 18 weeks to 26 weeks next April.

• Childless couples

  • The working tax credit will also be extended, guaranteeing couples without children earning less than £280 a week a minimum weekly income of £180 (up from £130), and £154 (£130) for single people.

PENSIONERS

• Allowances:

  • Age-related income tax personal allowances for 2003-04 will increase by more than the rate of inflation.

  • For a pensioner over 65 the first £6,610 of income will be free of tax. For those over 75, the allowance is increased to £6,740.

  • No pensioner aged 65 or over will pay tax on income of less than £127 a week.

MOTORISTS

• Fuel:

  • Petrol duties have been frozen in response to high and volatile oil prices.

• Licences:

  • Licences for cars, vans and lorries will be frozen.

• Pollution:

  • There will be a £55 reduction in licence fees for the least polluting vans, £30 off for the least polluting cars and up to £35 less for motorcyles.

• Haulage:

  • A distance-based road-users charge will be introduced for lorries to ensure that overseas hauliers pay for British roads.

  • This will offset tax cuts to be introduced for the UK haulage industry.

LEISURE

• Bingo:

  • Tax on bingo will be aligned with other forms of betting, with profits taxed rather than a duty levied on ticket sales.

• Small brewers:

  • Small brewers and village pubs will see the duty they pay on their own beer halved - the equivalent of 14p a pint - before the football world cup begins.

• 'Alcopops':

  • From April 28 pre-mixed drinks containing spirits, such as "alcopops", will be taxed at the same rate as spirits instead of low-alcohol wines.

• Beer:

  • Duties on beer, spirits and wine have been frozen.

• Cigarettes:

  • The tax on cigarettes will rise by 6p for a packet of 20, in line with the annual inflation increase.

CITY REGENERATION

• Investment:

  • A new community investment tax credit, supported by a Community Development Venture Capital Fund, will provide £40m to invest in deprived areas.

• Sports clubs:

  • Community amateur sports clubs will be given the same access to tax reliefs on income and donations available to charities.

  • The government will also provide £20m from the Capital Modernisation Fund to provide new or refurbished community sports facilities.

• Stamp duty

  • Stamp duty on commercial deals will be abolished in high unemployment areas, subject to EU approval.

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