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Darling unveils 50% top tax rate Darling unveils 50% top tax rate
(10 minutes later)
Alistair Darling has announced a new top tax rate of 50% for those earning more than £150,000 from next April.Alistair Darling has announced a new top tax rate of 50% for those earning more than £150,000 from next April.
The chancellor is trying to save the public finances after announcing bigger than expected borrowing of £175bn.The chancellor is trying to save the public finances after announcing bigger than expected borrowing of £175bn.
The UK economy will shrink by 3.5% - the worst in modern times, he said in his Budget but he said he expected it to pick up at the end of the year.The UK economy will shrink by 3.5% - the worst in modern times, he said in his Budget but he said he expected it to pick up at the end of the year.
He also announced a scrappage scheme of £2,000 for people trading in cars older than 10 years for new ones.He also announced a scrappage scheme of £2,000 for people trading in cars older than 10 years for new ones.
The move is aimed at helping the floundering car industry as part of a wider package to boost industry.The move is aimed at helping the floundering car industry as part of a wider package to boost industry.
KEY POINTS 50% tax rate for earnings over £150,000Growth forecast revised downBorrowing increased£15bn 'efficiency savings'Clawing back tax relief on top earners' pension £2bn help for young unemployed£1bn to boost housing marketCar scrapping scheme Watch live: Video and text At-a-glance: Budget 2009KEY POINTS 50% tax rate for earnings over £150,000Growth forecast revised downBorrowing increased£15bn 'efficiency savings'Clawing back tax relief on top earners' pension £2bn help for young unemployed£1bn to boost housing marketCar scrapping scheme Watch live: Video and text At-a-glance: Budget 2009
The new top rate of tax is a change of plan from the pre-Budget report last year in which he had proposed the new tax rate being 45%.The new top rate of tax is a change of plan from the pre-Budget report last year in which he had proposed the new tax rate being 45%.
It is also being brought in a year earlier than planned "to pay for additional support for people now".It is also being brought in a year earlier than planned "to pay for additional support for people now".
Mr Darling says the Budget measures would steer the UK through the "worst global economic turmoil" in 60 years or more. In other measures, petrol duty will increase by 2p per litre in September and then by 1p a litre above inflation each April for the next four years.
He began his speech by saying the Budget would provide help to get people back into work quickly and support businesses and homeowners facing problems. Alcohol duties will go up by 2% from midnight. There will be an increase in tobacco duty of 2% from 6pm. Mr Darling said these measures will raise more than £6bn by 2012.
That would help pay for a real terms boost in pensioners' income - including subsidies for grandparents who care for their grandchildren - and help for savers with ISAs.
Pensioners help
There will also be more help to get people back into work quickly and support businesses and homeowners facing problems.
Everyone under the age of 25 out of work for 12 months or more will be offered a job or a place on a training scheme. In addition, the government will create or support up to 250,000 jobs in deprived areas.Everyone under the age of 25 out of work for 12 months or more will be offered a job or a place on a training scheme. In addition, the government will create or support up to 250,000 jobs in deprived areas.
Mr Darling also announced an expansion of sixth form and further education places.Mr Darling also announced an expansion of sixth form and further education places.
There will be measures to support investment in the growth and green industries of the future and the government will work to rebuild Britain's financial services.There will be measures to support investment in the growth and green industries of the future and the government will work to rebuild Britain's financial services.
Mr Darling confirmed the worst year for the economy since the Second World War with a 3.5% decline in 2009 - far worse than his pre-Budget forecasts.
Public borrowing will also soar to record levels as the Treasury wrestles with a toxic combination of falling tax receipts, higher spending and the cost of bank bail-outs.
But he made clear his plans depended on a rapid economic bounce-back - with a forecast of 1.25% growth next year rising to 3.5% in 2011.
And he admitted that the economy would first face of period of deepening deflation with the Retail Price Index falling to a low of minus 3% by September.
'Too weak''Too weak'
Conservative leader David Cameron said the Budget represented a "day of reckoning" for the government, proving that its economic policies had not worked.Conservative leader David Cameron said the Budget represented a "day of reckoning" for the government, proving that its economic policies had not worked.
He told BBC News: "We've got to get debt under control, we've got to start to close that deficit, and... I think this government is just too weak to do the job."He told BBC News: "We've got to get debt under control, we've got to start to close that deficit, and... I think this government is just too weak to do the job."
Liberal Democrat Treasury spokesman Vince Cable said people needed "a very clear statement - without spin - about exactly what the situation is in the economy".Liberal Democrat Treasury spokesman Vince Cable said people needed "a very clear statement - without spin - about exactly what the situation is in the economy".
There was grim news on the jobs front ahead of the Budget, with unemployment figures showing the number of people looking for work has reached 2.1 million - its highest level since Labour came to power in 1997.There was grim news on the jobs front ahead of the Budget, with unemployment figures showing the number of people looking for work has reached 2.1 million - its highest level since Labour came to power in 1997.
Car scrappingCar scrapping
Meanwhile, official figures showed that public borrowing soared to a record £90bn in the last financial year - almost 6.2% of national income and far higher than the £78bn prediction made by Mr Darling in his pre-Budget report last November.Meanwhile, official figures showed that public borrowing soared to a record £90bn in the last financial year - almost 6.2% of national income and far higher than the £78bn prediction made by Mr Darling in his pre-Budget report last November.
Mr Darling is expected to plug part of the gap in the public finances with £15bn of "efficiency" cuts from 2010 - after the next election - provoking anger from public service unions.Mr Darling is expected to plug part of the gap in the public finances with £15bn of "efficiency" cuts from 2010 - after the next election - provoking anger from public service unions.
He could also claw back tax relief on the pensions of top earners, although this is only likely to affect those on £100,000 a year or more.He could also claw back tax relief on the pensions of top earners, although this is only likely to affect those on £100,000 a year or more.
A £1bn package aimed at boosting house sales and house building is expected to include a four-month extension on the stamp duty "holiday" on homes costing below £175,000.A £1bn package aimed at boosting house sales and house building is expected to include a four-month extension on the stamp duty "holiday" on homes costing below £175,000.
From 1pm we will have tax, pension and personal finance experts available to answer your questions about the Budget and how it affects you. If you have a question you can send it to us using the form below:From 1pm we will have tax, pension and personal finance experts available to answer your questions about the Budget and how it affects you. If you have a question you can send it to us using the form below:
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