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Chancellor looks to green Budget | |
(about 2 hours later) | |
Green taxes and measures to help people struggling to pay energy bills are likely to be among changes in the chancellor's first Budget on Wednesday. | |
Alistair Darling is also expected to raise the duty on alcohol, boosting government coffers and addressing public concern at binge drinking. | |
Mr Darling also faces a demand from business to cut corporation tax. | |
But dramatic tax cuts look unlikely, given economic uncertainty and strained public finances. | |
The Confederation of British Industry (CBI) has said that high taxes on business are damaging the UK economy. | The Confederation of British Industry (CBI) has said that high taxes on business are damaging the UK economy. |
Energy | Energy |
Mr Darling is expected to present a plan to control the tariffs paid by 3.8m electricity customers and 2.8m gas customers who use pre-payment meters, according to the Financial Times. | Mr Darling is expected to present a plan to control the tariffs paid by 3.8m electricity customers and 2.8m gas customers who use pre-payment meters, according to the Financial Times. |
Measures to help with high energy costs could be unveiled | |
The measures are thought to be aimed at stopping energy firms making an alleged £400m in excess profits from the country's poorest consumers. | The measures are thought to be aimed at stopping energy firms making an alleged £400m in excess profits from the country's poorest consumers. |
The chancellor is also expected to unveil measures aimed at cutting carbon emissions from cars and a move to increase biofuel use. | The chancellor is also expected to unveil measures aimed at cutting carbon emissions from cars and a move to increase biofuel use. |
Weekend newspaper reports said the chancellor might introduce a levy on new, larger cars, such as people carriers, that could increase their price by £2,000. | Weekend newspaper reports said the chancellor might introduce a levy on new, larger cars, such as people carriers, that could increase their price by £2,000. |
The government is likely to increase duty on alcohol above the rate inflation. | |
The Conservatives said last week they would raise tax on super-strength beer, cider and alcopops to tackle binge drinking if they won the next general election. | |
Corporate taxes | |
Richard Lambert, head of the CBI, said a few years ago Britain had one of the most favourable corporate tax environments in the world but that has now deteriorated. | |
CORPORATION TAX RATES Italy 37.2%Germany 29.8%UK 28%Netherlands 25.5% | |
The CBI wants corporation tax cut from 28% to 18% by 2016 and a simpler system introduced. | |
However, unions say a cut in corporation tax would lead to tax hikes for "ordinary people". | |
The call comes as business confidence in the government has deteriorated in the wake of the Northern Rock scandal, changes to capital gains tax and amid plans to tax non-domiciles. | |
According to a CBI report, written by 12 leading tax experts, the UK has failed to match deep cuts made to corporation tax by nations like Italy and the Netherlands. | According to a CBI report, written by 12 leading tax experts, the UK has failed to match deep cuts made to corporation tax by nations like Italy and the Netherlands. |
It says since 1993 the main rate of UK corporation tax has been reduced by 5% to 28%, but Germany has halved its tax rate to 29.8% and the Netherlands has sliced off 9.5%, to 25.5%. | It says since 1993 the main rate of UK corporation tax has been reduced by 5% to 28%, but Germany has halved its tax rate to 29.8% and the Netherlands has sliced off 9.5%, to 25.5%. |
That means that the UK has slipped from fourth to sixth place in the ranking of EU nations with the lowest corporation tax rates. | That means that the UK has slipped from fourth to sixth place in the ranking of EU nations with the lowest corporation tax rates. |
'Tax hikes' | |
The Conservatives have also put pressure on the chancellor to cut business taxes. | The Conservatives have also put pressure on the chancellor to cut business taxes. |
Shadow chancellor George Osborne told the BBC the Tories planned to pay for cutting corporation tax to 25% by scrapping a number of business tax breaks. | Shadow chancellor George Osborne told the BBC the Tories planned to pay for cutting corporation tax to 25% by scrapping a number of business tax breaks. |
But TUC general secretary Brendan Barber said the chancellor should not listen to the CBI. | But TUC general secretary Brendan Barber said the chancellor should not listen to the CBI. |
"The CBI is calling for both much lower rates of corporation tax and for a huge increase in opportunities for big businesses and the super-rich to avoid paying their fair share of tax," he said. | "The CBI is calling for both much lower rates of corporation tax and for a huge increase in opportunities for big businesses and the super-rich to avoid paying their fair share of tax," he said. |
"If their lobbying was to succeed, it would lead to tax hikes for ordinary people, damaging cuts to public services and abandoning government commitments on child poverty." | "If their lobbying was to succeed, it would lead to tax hikes for ordinary people, damaging cuts to public services and abandoning government commitments on child poverty." |