Howe described his final budget as one designed to "further the living standards and employment opportunities of all our people", and announced tax cuts that amounted to around £2bn for individuals and £750m[a] for industry. This included an increase in personal allowances worth 14%, which was 8.5% higher than needed to keep pace with the rate of inflation, but income tax rates remained unchanged. Corporation Tax on the profits of small businesses was reduced by 2% to 38%, while the employers' national insurance surcharge was reduced from 1.5% to 1%. North Sea oil companies were granted tax relief worth around £800m,[b] which would be phased in over four years. There was an increase in Social Security benefits. Excise duty on beer was increased by 1p. There was also a 5p duty increase on a bottle of wine, a 25p increase on a litre of spirits, and a 3p increase on a packet of 20 cigarettes.[1][2]
Some Conservatives expressed their disappointment that no changes had been made to income tax, to which Howe responded, "It cannot be put right in one Budget or even one Parliament".[2]
Aftermath
The Conservatives went on to win the general election, but the 1983 budget would prove to be Howe's last as chancellor. He was shortly to be replaced by Nigel Lawson, who was promoted from the Department of Energy, and would go on to present the 1984 budget, as well as several subsequent budgets after that.[2]
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