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| Version 1 | Version 2 |
|---|---|
| Darling prepares for first Budget | Darling prepares for first Budget |
| (about 5 hours later) | |
| Chancellor Alistair Darling is expected to announce higher taxes on alcohol and the most polluting cars in his first Budget, due to start at 1230 GMT. | |
| Reports suggest he may also replace air passenger duty with a tax on flights. | Reports suggest he may also replace air passenger duty with a tax on flights. |
| But the BBC has learned he will delay a planned 2p rise in fuel duty, after crude oil prices hit a record high. | But the BBC has learned he will delay a planned 2p rise in fuel duty, after crude oil prices hit a record high. |
| The Tories say the government borrowed so much it cannot cut taxes to boost the economy. The Lib Dems say it should prepare the UK for an "economic storm". | The Tories say the government borrowed so much it cannot cut taxes to boost the economy. The Lib Dems say it should prepare the UK for an "economic storm". |
| Mr Darling will stand up to make his Budget statement in the Commons at 1230 GMT. He is likely to speak for up to an hour, with shorter responses from Tory leader David Cameron and Lib Dem leader Nick Clegg. | |
| The chancellor is thought unlikely to make big tax cuts, owing to economic uncertainty and strained public finances. | |
| 'Showroom tax' | 'Showroom tax' |
| In Wednesday's Budget, Mr Darling is expected to transform air passenger duty into a tax on flights in a bid to cut carbon dioxide emissions, and to introduce a "showroom tax" of up to £2,000 on the least fuel efficient vehicles. | |
| But BBC political editor Nick Robinson said soaring crude oil prices, which have gone up by 20% in the past year, were behind the chancellor's decision to postpone the 2p-a-litre rise in fuel duty. | But BBC political editor Nick Robinson said soaring crude oil prices, which have gone up by 20% in the past year, were behind the chancellor's decision to postpone the 2p-a-litre rise in fuel duty. |
| Abandoning plans to increase fuel duty will seriously undermine the government's green credentials Simon BullockFriends of the Earth Darling to delay fuel duty rise | Abandoning plans to increase fuel duty will seriously undermine the government's green credentials Simon BullockFriends of the Earth Darling to delay fuel duty rise |
| That rise, announced in last year's Budget, was due to come into effect on 1 April, but has been put back six months. | That rise, announced in last year's Budget, was due to come into effect on 1 April, but has been put back six months. |
| Edmund King, from the AA, said a delay would "help people and business weather the financial damage and uncertainty high prices cause". | Edmund King, from the AA, said a delay would "help people and business weather the financial damage and uncertainty high prices cause". |
| But Simon Bullock, from Friends of the Earth, said: "Abandoning plans to increase fuel duty will seriously undermine the government's green credentials." | But Simon Bullock, from Friends of the Earth, said: "Abandoning plans to increase fuel duty will seriously undermine the government's green credentials." |
| Alcohol duty | Alcohol duty |
| Other predicted announcements include a possible requirement for supermarkets to charge for disposable plastic bags, if they do not voluntarily scrap them. | |
| And Mr Darling is expected to announce above-inflation rises on alcohol duties - in an effort to curb binge drinking. | And Mr Darling is expected to announce above-inflation rises on alcohol duties - in an effort to curb binge drinking. |
| He has got no room for manoeuvre Philip HammondConservatives Profile: Alistair Darling | He has got no room for manoeuvre Philip HammondConservatives Profile: Alistair Darling |
| There may also be more money to tackle child poverty, amid warnings that the government could miss its target of halving child poverty by 2010. | There may also be more money to tackle child poverty, amid warnings that the government could miss its target of halving child poverty by 2010. |
| And Mr Darling is expected to provide help with rising energy costs for poorer families, which could mean limiting the tariffs paid on pre-paid gas and electricity meters. | And Mr Darling is expected to provide help with rising energy costs for poorer families, which could mean limiting the tariffs paid on pre-paid gas and electricity meters. |
| He took over as chancellor when Gordon Brown became prime minister last June. | He took over as chancellor when Gordon Brown became prime minister last June. |
| Recession risk | Recession risk |
| The Conservatives say his hands have been tied by the decisions of his predecessor, who they claim borrowed too much in order to fund public sector reforms. | The Conservatives say his hands have been tied by the decisions of his predecessor, who they claim borrowed too much in order to fund public sector reforms. |
| Shadow Treasury chief secretary Philip Hammond said: "Alistair Darling's problem is that he is already bumping up against his fiscal rules because they have borrowed so much during that period of relatively strong economic growth. | Shadow Treasury chief secretary Philip Hammond said: "Alistair Darling's problem is that he is already bumping up against his fiscal rules because they have borrowed so much during that period of relatively strong economic growth. |
| Measures to help with high energy costs could be unveiled | Measures to help with high energy costs could be unveiled |
| "He has got no room for manoeuvre. He can neither significantly increase taxation because of the risks to the economy, nor can he significantly decrease taxation because of the size of the deficit." | "He has got no room for manoeuvre. He can neither significantly increase taxation because of the risks to the economy, nor can he significantly decrease taxation because of the size of the deficit." |
| The Liberal Democrats' Treasury spokesman, Vince Cable, said some "serious people", including bankers Morgan Stanley, were saying there was a one-in-three chance of a technical recession in the UK this year or next. | The Liberal Democrats' Treasury spokesman, Vince Cable, said some "serious people", including bankers Morgan Stanley, were saying there was a one-in-three chance of a technical recession in the UK this year or next. |
| "There are very good reasons for believing that there is a high risk of a recession. It is not probable but it is certainly very possible," he said. | |
| HAVE YOUR SAYI would like the 1% stamp duty threshold raised to £350,000.Kevin Kevin, WitneySend us your comments | |
| "We therefore need to think about how the British economy would cope with it." | "We therefore need to think about how the British economy would cope with it." |
| He urged Mr Darling to bring house prices within the Bank of England's inflation target and to prepare help for households which would have difficulty paying their mortgages. | |
| Mr Darling is also under pressure from the Confederation of British Industry (CBI) to reduce corporation tax from 28% to 18% by 2016 and to simplify the system. | |
| Trade unions say a cut would lead to tax hikes for "ordinary people". |