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UK growth forecast revised down Darling puts up car and drink tax
(about 2 hours later)
The UK is "better placed than other economies" to weather financial storms, Chancellor Alistair Darling has said. Big increases in duty on alcohol and high-polluting cars have been announced by Chancellor Alistair Darling.
His claim came as he cut by 0.25% his October forecast that the UK economy would grow by up to 2.5% this year. In his first Budget he put 4p on a pint of beer, 14p on a bottle of wine and 55p on a bottle of spirits. Duty on a packet of cigarettes is up 11p.
Mr Darling also postponed for six months a 2p per litre fuel duty rise - but added an extra 0.5p rise from 2010 and is expected to put up alcohol duty. He announced higher road tax for the most polluting cars but delayed for six months a 2p rise in fuel duty.
In his first Budget he also said Child Benefit would rise from April 2009 to £20 week - a year earlier than planned. Mr Darling, who insisted the UK could "weather economic storms", also increased winter fuel payments.
In the speech, which began at 1230 GMT, he said the child element of the child tax credit for families on low and middle income would increase by £50 a year above inflation. But Conservative leader David Cameron dismissed his Budget statement as a "a dire list of reviews and reannouncements".
KEY MEASURES Delay 2p rise in fuel duty for six monthsExpected Replace air passenger duty with tax on flightsExpected to introduce 'showroom tax' of up to £2,000 on least fuel efficient vehiclesRequire supermarkets to charge for plastic bags if they do not scrap themMore cash to tackle child povertyHelp with rising energy costs for poorer families Key points at-a-glance KEY MEASURES Delay 2p rise in fuel duty for six months6% increase in alcohol tax - with 2% annual rise for next four years4p on pint of beer, 3p on cider, 14p on wine, 55p on spirits11p on packet on 20 cigarettes, 4p on five cigars £950 higher first year rate of road tax for most polluting carsIncrease in green tax on flightsWinter fuel payment up to £250 for over-60s and to £400 for over-80sRequire supermarkets to charge for plastic bags if they do not scrap themMore cash to tackle child povertyHelp with rising energy costs for poorer families Key points at-a-glance class="" href="/1/hi/business/7291643.stm">Car taxes rise
"The cost of living is going up and Labour is making it worse," added Mr Cameron.
Liberal Democrat leader Nick Clegg said Mr Darling could have helped "the millions of hard pressed families who are feeling the pinch".
But instead he had delivered a "meagre tinkering budget which gives precious little help to the poor but maintains special treatment to the rich".
There were no further U-turns on capital gains tax or non-domiciled residents in Mr Darling's Budget statement.
But he was forced to cut his forecasts for economic growth for this year by 0.25% - to between 1.75% and 2.25% - and he announced a big increase in government borrowing, which is set to go up by £14bn over the next two years.
There will also be an increase in the overall tax burden over the next three years.
More help will be targeted at the elderly and poorest in society - although Labour still faces claims it has abandoned its target of halving child poverty by 2010.
READ THE BUDGET IN FULL Budget statement [112KB]Complete report [4.06MB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here
Child Benefit will rise from April 2009 to £20 week - a year earlier than planned and there was more help for families using pre-paid electricity meters.
The over-60s will get £250 winter fuel payment instead of £200 and the over-80s will get £400 instead of £300.
Mr Darling risked the anger of environmental groups by delaying a planned increase in fuel duty for six months - but motorists will face an April 2009 fuel duty rise of 1.84p a litre.
This year's Budget is a responsible Budget that will secure stability in these times of global economic uncertainty Alistair DarlingChancellor Analysis: The straight man
Plans to increase first-year road tax by £950 for the most polluting vehicles - and a general reform of Vehicle Excise Duty aimed at encouraging the production of greener cars - are also expected to bring in an extra £730m annually by 2010.
Mr Darling said he was setting aside new funding to develop road-pricing schemes.
And he announced an increase in the amount airlines will have to pay to become "greener" - an extra 10% on plane duty in the second year of the new per-flight tax regime.
Drinkers will also bear the brunt of Mr Darling's spending plans with alcohol tax to go up by 6% above inflation - and then by 2% above inflation for each of the next four years, potentially boosting Treasury coffers by £635m annually by 2010.
On the environment, he ordered stores to ban single-use carrier bags by next year or face legislation - and announced a review of carbon targets with aim of reducing emissions by 80% by 2050, up from 60%.
Inflation
Setting out his Budget in the Commons, Mr Darling said: "This year's Budget is a responsible Budget that will secure stability in these times of global economic uncertainty."
In other changes, stamp duty on shared-ownership homes will not be required until buyers own 80% of the equity in their home.
HAVE YOUR SAY Today's Budget only puts more debt onto tomorrow's generations Iain Connochie Send us your comments
The child element of the child tax credit for families on low and middle income would increase by £50 a year above inflation.
A working family with one child on the lowest income will gain up to £17 a week, lifting 150,000 children out of poverty, said Mr Darling.A working family with one child on the lowest income will gain up to £17 a week, lifting 150,000 children out of poverty, said Mr Darling.
He also ordered energy companies to increase the help they give to people using pre-paid meters from £50m to £150m a year. Mr Darling said inflation would rise before returning to its 2% target in 2009 and remain on target thereafter.
He delayed fuel duty increases but added: "For environmental reasons we will increase fuel duty by 0.5 pence per litre in real terms from 2010."
On the wider economy, he said inflation would rise before returning to its 2% target in 2009 and remain on target thereafter.
He said borrowing next year would rise to £43bn, 2.9% of national income - £7bn more than forecast last year - with a similar increase the following year.
Other predicted announcements include a requirement for supermarkets to charge for disposable plastic bags, if they do not voluntarily scrap them.
He is also expected to announce a "showroom" tax on up to £2,000 on the least fuel efficient vehicles.
Mr Darling is tipped to announce above-inflation rises on alcohol duties - in an effort to curb binge drinking.
Mr Darling took over as chancellor when Gordon Brown became prime minister last June.
The Conservatives say Mr Darling's hands have been tied by the decisions of his predecessor, who they claim borrowed too much in order to fund public sector reforms.
The Lib Dems say the chancellor should do more to help Britain weather coming economic storms.