London — Just two months ahead of an expected national election, the British government on Wednesday announced tax cuts of $5.9 billion and higher spending on the nation's financially troubled hospitals and schools.
By contrast with President Bush's much larger proposed tax cut in the United States, which would benefit high-earning taxpayers the most, Chancellor Gordon Brown's cuts are aimed at couples with children, pensioners and those on low incomes.
British parliamentary procedures allow for some of the measures to take effect immediately, and others are likely to be enacted before an election that Prime Minister Tony Blair is expected to call for May 3.
Blair's Labor Party enjoys a huge lead over the opposition Conservatives in opinion polls, and Brown's new budget could bolster Labor's standing with voters.
Among the measures he announced were increases in benefit payments that go to all families with children, a further child tax credit, higher maternity payments and a new two-week paternity leave payment.
New mothers will be receive benefits for 26 weeks, up from 18 weeks, and will receive $112 a week compared to the present $90. Next year this will go up to $149. Fathers will get paternity leave paid at $149 a week.
Brown also announced a $1,500-a-year "baby credit," to be paid in the first year of a child's life to families with incomes up to $75,000 a year. This, he said, would make it easier for mothers to stay at home longer after giving birth.
Overall, he said, his measures and others in previous years of the Labor government will lift 1.2 million children out of poverty.
Brown also announced a series of measures to help pensioners, and said that instead of cutting tax rates he plans to lower the basic rate to 10 percent from the current 22 percent a measure worth $1.5 billion to lower-income taxpayers.
He said 7.5 million pensioners, or 70 percent of the total, would pay no income tax or pay at the 10-percent rate.
Brown also announced extra spending of $1.5 billion each for hospitals and schools, two categories that have been underfunded in Britain for years but that have been given top priority in Labor spending programs. Labor has come under heavy criticism in the last year for not doing more to improve the nation's hospitals and schools.
In a move aimed at pleasing voters in the coming election, Brown announced that for the second year running he would not increase taxes on liquor and would freeze tax rates on wine and beer. Normally these duties go up every year. He said cigarette taxes would rise by 9 cents a pack, just enough to keep pace with inflation.
He also announced tax relief aimed at small businesses, and for the first time since Labor took office he did not increase gasoline taxes. Taxes on low-sulfur, lead-free and diesel fuels were all cut by 12 to 16 cents a gallon.
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