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From Birmingham 1998 to Köln 1999
Country Report

United Kingdom

~ United Kingdom Contents ~ Country Objectives ~

Summit Issues for United Kingdom

Employment

The British economy has remained stable over the last year. For the last seven months inflation has been at or around 2.5 per cent and is forecast to remain at that level for the nest two fiscal years. Long term interest rates have come down significantly in the past year to sit at 4 per cent the lowest in over 40 years. The UK's growth estimate for 1999 is 1 per cent to 1 per cent and is forecast to reach 2 to 3 per cent in 2001. Overall, unemployment figures for the past year have been at the lowest rate in 20 years. Contributing to this figure are two significant achievements: youth unemployment has fallen by 57 per cent since May, 1997, and long term unemployment has been cut in half. The government expects a budget surplus for the current fiscal year of 4 billion pounds. Despite a 50 per cent decline in exports to East Asia due to the serious economic situation in that region, Britain, with other G7 nations, has rightly assumed a leadership role to address the root causes and contain the spread of future global crises. The British government is determined to continue locking in this fiscal tightening for the years to come so that they can continue to meet their fiscal targets and deliver sound public finances.

The Government's cental economic objective is to achieve high and stable levels of growth and employment in an effort to ensure a better quality of life today and for future generations. The UK government intends to accomplish this by delivering low inflation and sound public finances and strengthening the economy by closing the current productivity gap between the UK and other G8 nations.

To achieve high and stable levels of growth and employment, the government's strategy is based around moving people from welfare to into work and making work pay. The New Deal for young people, Britains's welfare to work initiative, began nation-wide in April, 1998. Already, almost 250, 000 young people have joined the program, of which over 60,000 have found jobs. Further initiatives have been put into place for the long-term unemployed and lone parents, and the New Deal for disabled people has begun as a pilot project. Latest figures show that over 100, 000 over 25s are already benefitting from the New Deal for the long-term unemployed, of which 9,000 have moved into jobs.

Other new measures introduced to help combat unemployment include:

Most fundamentally the tax reforms of this Budget provide a better deal for the hard working majority a ladder of opportunity for those who want to work their way up: 230,000 young people are already benefitting from the New Deal. The government intends to bring in those young unemployed who, for whatever reason, have yet to join.

The New Deal has been updated to include better provisions but tougher conditions and in several other important respects. To help lone parents make the transition into jobs, benefits will continue when recipients first start work. For them, and others the working families tax credit will make work pay more than benefits. Every working family will be guaranteed a minimum income of 200 pounds a week and no income tax will be paid until family earnings reach 235 pounds a week.

Britain is committed to introducing policies that encompass active ageing, including a new deal, for persons over 50 returning to work. Nearly 30 per cent of men over 50 are outside the Labour force, twice as many as 20 years ago. For those unemployed for six months or more, The government has created a new employment credit which will guarantee a minimum income of 9,000 pounds a year, for their first year back in full time work, at least 170 pounds a week.

The tax cuts made by the British government are tax cuts for a purpose, tax cuts that encourage work and make work pay, that help all middle and lower income families, tax cuts for the many and not just the few and at the best time for the economy.

The Government is committed to providing more help for pensioners recognising that pensioners need fair and decent support. On top of previously-announced measures, including a 20 winter fuel payment to all pensioners, the introduction of a minimum income guarantee, and the introduction of free eye tests from April 1999, the government has introduced a new package of measures for pensioners worth a further 1 billion every year. This supplemental package includes a fivefold increase in the winter fuel allowance from 20 to 100, a commitment to increase the minimum income guarantee by earnings rather than prices, and the introduction of the Minimum tax guarantee. The Government wants to encourage people to save, both to underpin long term investment and to secure their own financial welfare for the future, underpinning the Government's policy of work for those who can and security for those who cannot. The Government is introducing or has introduced:

Stakeholder pensions which combine the low overheads and high security of occupational pensions with the flexibility of personal pensions, and which will be available to all; and Individual Savings Accounts (ISAs), which started on 6 April, with the aim of extending the savings habit to the half of the population that currently has little or no savings.

Environment

The Government is committed to building a fairer society in which everyone has the opportunity to fulfil their potential and enjoy the benefits of high and stable levels of economic growth and employment while protecting the environment. The Government is committed to ensuring that economic growth takes place in a sustainable way which respects the environment and is fair to future generations. Environmental objectives must be achieved in the most efficient way available, taking into account the advantages and disadvantages of different policy options for securing those objectives, including:

The Government's target is to reduce greenhouse emissions by 12.5 per cent by 2010 ans has just committed to cutting carbon pollution by 3 million tonnes. The UK will be introducing a levy on business use of energy from April 2001 which will be brought in on a revenue-neutral basis, with no overall increase in the burden of taxation on business. The Government also intends to set significantly lower rates of tax for energy-intensive sectors that improve their energy efficiency.

The Government also has a number of other environmental initiatives that serve to showcase this issue as a national and international priority. These include:

The UK is able to push the environment agenda at the summit table by promoting their "think globally, act locally" philosophy and by pointing to the significant environmental undertakings that their government has committed to and implemented.

Kosovo

Forthcoming

International Crime and Terrorism

Forthcoming

Prepared by Allison Smith, University of Toronto G8 Research Group, May 1999.

~ United Kingdom Contents ~ Country Objectives ~

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