1994 United Kingdom budget

1994 (1994) United Kingdom budget

Presented	29 November 1994
Parliament	51st
Party	Conservative Party
Chancellor	Kenneth Clarke
‹ November 1993 1995›

The 1994 United Kingdom budget (officially titled A Budget for Jobs)^[1] was delivered by Kenneth Clarke, the Chancellor of the Exchequer, to the House of Commons on 29 November 1994.^[2] It was the second budget to be presented by Clarke since his appointment as chancellor the previous year, and its central focus was a planned £24bn worth of tax cuts. Clarke also renewed his commitment to increasing Value Added Tax (VAT) on fuel, but pledged to soften the impact this would have on pensioners. The statement took place shortly after the Party Whip had been withdrawn from eight Conservative backbenchers, leaving the government without a working majority, and amid questions about the future of John Major's leadership of the party. In response to the budget, Tony Blair, leader of the Labour Party, said it would be remembered as the "VAT on fuel budget".

VAT on fuel was due to be raised from 8% to 17.5% in April 1995, but after the government subsequently lost a vote on the legislation to implement the increase, the 1994 budget was followed in December of that year by an emergency financial statement in which Clarke was forced to announce measures to plug the shortfall this would create. He cancelled the majority of the social security help for pensioners that had been outlined in his budget, and raised excise duty on tobacco and alcohol. Clarke's successor as Chancellor, Gordon Brown, reduced VAT on domestic fuel to 5% after Labour won the 1997 general election.