_(St_Edwards_Crown).svg) | |
| Presented | 16 March 1993 |
|---|---|
| Country | United Kingdom |
| Parliament | 51st |
| Party | Conservative Party |
| Chancellor | Norman Lamont |
‹ 1992 | |
TheMarch 1993 United Kingdom budget (officially titledA budget for sustained recovery and a budget for jobs)[1] was delivered byNorman Lamont, theChancellor of the Exchequer, to theHouse of Commons on 16 March 1993.[2] It was the third and final budget to be presented by Lamont during his tenure as chancellor, and the final spring budget to be outlined before theConservatives unified their tax and spending plans into one budget statement.
Lamont introduced a series of phased tax increases, including announcing aVAT levy of 8% on domestic fuel from 1 April 1994, which would be raised to 17.5% the next year, as well as making changes toincome tax and raising thestamp duty threshold. March 1993 also marks the first occasion on which a chancellor cited the environment as a reason for raising taxes, but this failed to convincegreen campaigners the tax raises were justified.John Smith, the leader of theOppositionLabour Party, dismissed the budget as "a shameful budget from a cynical government that has broken its election promises". Prime MinisterJohn Major described it as "the right budget, at the right time, from the right chancellor" before replacing Lamont a few weeks later withKenneth Clarke.
The March 1993 budget was broadly neutral for the year ahead, but the chancellor introduced a number of tax rises that would take effect in successive years. Chief amongst these was his decision to raise VAT on domestic energy bills, which would be phased in from April 1994 when VAT of 8% would be levied. This was scheduled to increase to 17.5% from April 1995. Increases in a number of income-related benefits were also announced as a way to offset the extra cost. Lamont emphasized the positive impact he believed raising VAT on fuel would have for the environment, the first time a chancellor had cited the environment as a reason for increasing taxes. Minor changes were made to the 20p rate of income tax, but the two other tax bands remained intact, effectively making them tax rises. The stamp duty threshold on the purchase of property was raised, reducing the cost of buying a house valued at between £30,000 and £60,000 by up to £600.[1][3]
John Smith, the leader of the Opposition Labour Party, dismissed the chancellor's statement as "a shameful budget from a cynical government that has broken its election promises", while green campaigners viewed Lamont's reference to the environment as nothing more than an excuse for raising taxes to pay off the public deficit.[1][3]
AnEarly day motion condemning the budget's impact on those on low wages and the poor, and signed by 70MPs, was tabled before the House of Commons on 17 March 1993.[4]
The March 1993 budget was the last to be presented in the spring before the Conservatives switched budget statements to the autumn so their tax and spending plans could be outlined simultaneously. It would also beNorman Lamont's final budget. The planned introduction of VAT on domestic fuel and power went ahead in April 1994, but the increase from 8% to 17.5% in April 1995 was scuppered in December 1994, after the government lost the vote inparliament.[5]
Although Prime MinisterJohn Major hailed it as "the right budget, at the right time, from the right chancellor", Lamont would be replaced byHome SecretaryKenneth Clarke in acabinet reshuffle two months later. Clarke went on to deliver thebudget of November 1993, and continued to serve as chancellor for the rest of the parliament.[1][3]
