Drinkers and drivers were hit in the pocket yesterday as Alistair Darling used
them and a borrowing surge to try to steer Britain away from recession and
through global financial storms.
In an austere first Budget, Mr Darling increased drink prices — from 3p on a
litre of cider to 55p on a bottle of whisky — with the promise of automatic
above-inflation rises in the years to come. But consumers could be
struggling with a severe hangover next Monday because the Chancellor left a
four-day gap before the new prices come into effect on Sunday night,
prompting predictions of a stampede to the supermarkets this weekend.
Mr Darling put 11p on a packet of 20 cigarettes and told motorists planning to
buy high-polluting cars that they would face a swingeing £950 first-year
road tax charge.
Those moves, along with a £600 million package of tax avoidance measures
against North Sea and other companies, will pay for rises in child benefit,
measures to tackle child poverty and to increase winter fuel payments to
£250 for people over 60 and to £400 for the over-80s.
Mr Darling also threatened supermarkets that they would be required by law to
charge for plastic bags if they did not act themselves.
Overall the tax burden this year remains largely unchanged as the economy
slows down. But the alcohol and delayed car charges will mean that taxes
increase by £800 million next year and £1.8 billion the year after — and the
general election will happen in one of them.
Mr Darling was forced to reveal a severe toll on his finances as the housing
market downturn, weaker consumer spending, and rougher times in the City hit
revenues from stamp duty, VAT and income tax.
George Osborne, the Shadow Chancellor, called it a “a bad news Budget which
kicks Britain’s families when they’re down”. He said: “The cost of living is
already rising fast and the Government has added to it with stealth taxes on
cars and alcohol, when we believe that these kinds of taxes should be offset
with tax reductions elsewhere.”
The notoriously cautious Chancellor, who fulfilled expectations of a
dull-sounding Budget, was gambling on the world economy recovering next
year. This was despite his admission that it faced “major risks” because of
the disruption across the credit markets, some of them “barely functioning
at all”.
Treasury officials said the Budget was based on “more normal conditions”
returning in 2009. Mr Darling and Gordon Brown will be keeping their fingers
crossed that that happens to give them any hope of building an election
warchest. If not, Labour could be entering an election period with the
public finances in a precarious state, and extra borrowing inevitable on top
of yesterday’s big increases.
In total, Mr Darling will borrow £140 billion over the next four years, £20
billion more than he forecast in his Pre-Budget Report (PBR) five months
ago. This is mainly because of weaker-than-expected growth reducing tax
receipts. He will now have to borrow £7 billion more than he predicted in
the next financial year, lifting the figure to £43 billion.
For David Cameron the borrowing figures were “truly dreadful”. But the
Conservative leader saw the Budget as a hangover from Mr Brown. “It’s
tempting to blame the Chancellor. After all, he’s had the most disastrous
start of any Chancellor in modern history. But I don’t think that would be
fair. Let’s be in no doubt as to the real source of the Government’s
problems. Ask any question about this Budget and the answer comes back to
one man: the Prime Minister.”
Nick Clegg, the Liberal Democrat leader, said it was a “meagre, tinkering”
Budget designed to fill a black hole in the finances while masquerading as
being good for the environment.
But for Mr Darling it was a “responsible Budget to secure Britain’s stability
in the face of global undertainty”. He offered cheer to Labour MPs and many
in his Cabinet with a package of benefit changes, worth £950 million a year
by 2010, aimed at taking 250,000 people out of poverty. Child benefit will
rise to £20 a week from April next year — a year earlier than planned — and
the child tax credit for families on low and middle incomes will increase by
£50 a year above inflation.
After a decade-long freeze on alcohol duties, Mr Darling brought drinkers down
to earth with a bump. They will face a 6 per cent rise at midnight on
Sunday, then a drink escalator — similar to that once applied to fuel prices
— will come into effect, increasing the duty on drink by 2 per cent above
inflation for the next four years.
Mr Darling also outlined a new vehicle excise duty regime from next year with
a range of banded rates, from nothing for the cleanest vehicles to £440 for
the worst polluting. Then in April 2010 will come the new first- year rate
of duties, ranging from nothing to £950 depending on their emission levels.
As expected, Mr Darling downgraded his forecast for economic growth this year
to 1.75 to 2.25 per cent, compared with the 2 to 2.5 per cent he was
predicting in the PBR. Soaring world food and energy prices mean that
inflation will also run above the Government’s 2 per cent target rate for
most of the year.
Mr Darling insisted that the economy would be on track next year and that
borrowing would come down, dropping to £23 billion by 2012-13.
The independent Institute for Fiscal Studies said that Mr Darling had
delivered his Budget with fingers crossed. “If the downturn is deeper than
expected, if he is over-optimistic about the underlying strength of tax
revenues, or if political pressure requires further giveaways, then Mr
Darling or his successor may have to inflict more pain,” it said.
The British Government is saying now what the Singapore government has said for years - we won't stop you having a big car/alcohol, but you will have to pay dearly for it. All the people, British expats included, seem to be able to live with it, though they too complain. Even if it just gets rid of some of the drunken louts it will be worth it.
Bill Atkins, Rehoboth Beach, USA
So the UK has regressed back to the 1200's when anything and everything was taxed. Come on a tax on plastic bags how desperate is this Government to raise revenue. You could tell that it hurt for him to say that the 2p rise on fuel was going to be shelved until October. Any excuse this Government has to raise taxes and they will and fritter it away on social development outreach workers or whatever new job the PC brigade can think up. There is a very easy way to generate around £3 billion get out of Iraq and Afganistan now as this is about the combined cost of keeping our forces away from home in a pointless excercise of goodwill to the US. Any way I suppose that it's our own fault in electing them in the first place, nice to know that during the last general election more people voted in Big Brother than bothered to turn out to choose who would run the country.
Iain Bryce, Chipping Norton, Oxfordshire
I agree with Andy Moore,
Wake up the people of the UK.
What I would like to know is, when people do not drink drive or stop smoking where are they going to get all their taxes from?
Also what would they do with all the people that would be unemployed?.
PS they would have no money to pay them unemploymen benifit as ther would be not enough people paying TAX.
Bill Ewing, Dundee, UK
Attention British people wake up to the real World and kick this incompetent inept Government out before they bust us and the Country. None of the current Cabinet have ever run a business let alone a Country! Andy Moore, Birmingham
CORRECT but there are problems. The Tories have two serious handicaps, Cameron and the Europhile Baker. The Lib-Dem's Clegg is desperately protecting his £60K EU pension without regard for Manifesto promises. UKIP has no significant leader at all. The SNP is the best bet by claiming all NuLabs Scottish seats. Long live the SNP
M. Cawdery, Portadown, UK (if it now exists)
I agree with Andrew [Barcombe]. I do get 25% Council Tax relief, but my tiny tied farmworkers cottage is classed as BAND E. No street lights, pavements, 2 buses a day [none on Sunday] but look at the view! Unfortunately that view doesn't help feed, warm or clothe me. I had to go through the humiliating experience of claiming Council Tax Rebate. Why did they need 12 months Bank Statements which I had to print from my on-line Bank? One would have shown my meagre "pot of gold" and pensions. I don't have paper statements as I went for the "green" option . On my combined pensions of £7,500 a year I can't emigrate, or move somewhere cheaper. Income Tax doubled.No help for an under 65 widowed pensioner. Don't drink or smoke, so there is only eating or heating to cut down on. Gas, electricity & grocery bills have soared. State pension increase £4.16 a week. Widow's pension £7 a month before tax, going by last year. That won't cover the increase in Council Tax. Where's Robin Hood?
Beryl, Windsor, England
Jonathan, Auckland, New Zealand: Well, you sensibly got out and are not coming back. Good solid voting with the feet! And I am sure those remaining have your heart felt sympathy!
M. Cawdery, Portadown, UK (if it now exists)
Carl,
Did you actually read my original post? The reason I ask is because if anything I was bemoaning the widespread apathy I perceive amongst many people in the UK. So whilst I'm not jumping down people's throats I think you'll find we're actually arguing the same point. In fact I couldn't agree with you more about television, which is why I'm reading my news and engaging in debate.
In response to Martovich from Bristol: It is widely accepted that Maori were the first settlers of mainland New Zealand, although there has been debate about the Moriori, who arrived in the Chatham Islands slightly before or at the same time as Maori on the mainland.
Jonathan, Auckland, New Zealand
I've lived and worked abroad in developed and developing nations. All these nations usually have a taxation system which funds mediocre public services. Usually because there is a fully functioning private sector running along side which most people opt for. This provides choice to the hard working majority and things like good quality affordable private healthcare and education. In this country we have a love hate relationship with the state which permeates throughout our attitude to the goverment and each other. This is due to the fact that we have no real alternative to the state. We are chained to it and we must feed it by paying for it. Baroness Thatcher wanted to give us choice and freedom in this matter through privatisaton and we slated her for it. This government is socialist. Don;t be surprised when they put up taxes. They don;t belive in personal wealth of any kind for them the state is everything. LAST ONE TO LEAVE PLEASE TURN OUT THE LIGHT.
karl, Leeds, West Yorkshire
The Tories!!! Look what happened the last time they were in! mass unemployment, poll tax - which led to the poll tax riots, which then lead to council tax being imposed on us, and don't forget the sleaze that went with all of that, surely we don't want them in again!!!! What about giving the Lib Dems a go at it, surely they can't do any worse? Can they?
John Hansted, Hawkhurst, UK
Maoris may have arrived in the 15th century but they were still there before the Europeans!
I notice that my main point was ignored though. Expats whinge and whine about this country but neglect the fact that they themselves are immigrants taking jobs from native born people. Always OK to take take take when its yourself but not the other way round eh? Instead of staying in this country, knuckling down, GETTING INVOLVED and trying to change things they whisk off to foreign climes. If you are all so concerned about the budget and what it means for you where is your political activism? Are you out getting your MP or party of choice's candidate to lower taxes. No of course not. Moaning is easier and anyway the TV is more interesting than actually trying to change things.
Carl, London, UK
Carl,
It's about taking a proactive approach to life and experiencing new places and cultures. I never mentioned the cost of living or immigration. In fact I earn far less here than I would in the UK, but then it's not about money - it's about quality of life.
In response to "how does it feel living in a land stolen from its original inhabitants"; I'm proud to now be a New Zealander. Yes there are unresolved issues with the Treaty of Waitangi but I think you'll find New Zealand is one of the most progressive nations around when it comes to indigenous rights. Maori language and culture are an integral part of every New Zealander’s identity. The Maori Party has MPs in parliament and they hold real power due to proportional representation.
I also have not forgotten that I am an immigrant. In fact I feel very humbled and extremely lucky to live here and my allegiances lie firmly with my adoptive home, as indeed they should.
I hope this answers any nagging misconceptions you may have.
Jonathan, Auckland, New Zealand
There are more holes in our current economic policy that I cant say I know where to start. Anybody who has done at minimum A level economoics knows that the way this government has behaved over the last 10 years is utterly baffeling.
The biggest problem with Brown and the labour party is they always use taxes to tell us what to do, dont drink, dont smoke, dont drive, but they never give tax breaks to make alternatives cheaper. They tax you for driving cars, and yet train fairs have gone up hugely over the last 10 years and public transport is still terrible.
The cost of living in the UK is actually quite staggering and when each working person bears a tax burden in excess of 70% of their earnings its not surpising to see so many people who can afford it emigrate. I am a die hard brit and i really would not want to leave, but I am fed up of my hard work being wasted on pointless policies that I as a normal working person simply dont benefit from in the slightest.
Jphn, Manchester,
Brown sold off the gold at a knock down price. So what?
We are the most highly taxed population in Europe - so what?
An economic tsunami is heading our way, many people will lose their jobs, their houses and inflation will do for their savings. So what?
Government incompetence and sleaze has wasted billions. So what?
A fitting epitaph for Brown and Balls.
Tricia, Sussex, uk
It is the constant mismanagement of this country that I just can't condone. Surely the Gov should understand the most basic of principles which is don't spend more than you earn. This Gov has been synonymous with overspending and wasteful money management whlist being the masters of spin. Simply time for them to go and see if the Tories can make a better job of it.
Peter, Marlow, Bucks
What about the fact that from next month those earning less than £18,800 will be paying MORE income tax, and those earning over £44,000 will be paying LESS!
No mention of this by anybody.
People do leave this country and I know many who have had enough. In fact, I am aware of eight paramedics who are emigrating to Australia this year; multiply this across Britain and you have huge numbers or ordinary, decent, skilled people getting the hell out. I leave in three years.
Colin, Norwich,
Yet again innocent citizens who enjoy a glass of wine with their meals and a social drink at their local are made victims of drunkards and louts.
Why aren't these antisocial drinkers hammered by the courts and banned from alcohol consumption on pain of a breach brings incarceration?
We all know why. This tax increase has nothing to to with addressing the cause of antisocial behaviour it is all about raising more money for the coffers of this misgovernment to waste.
Never mind though we can all sleep safe in our beds tonight in the knowledge that we will soon see the demise of the demon plastic bags.
Dek Crossingham, Birmingham, England
its interesting to see how "green" the Government has been in colluding with BAA to push through this third runway at Heathrow. Green my ......
As with everything with this Government its do as I say but not as I do
Francis - you are so right - how after record years of economic expansion and bumper pay days for the Government from record City profits there is no reserve to increase spending to kick start an economy on the brink of recession? Brown has simply ridden an improving economic climate (and in fact an overheating one), spent spent spent for little evident benefit and not demonstrated any proper management
Caroline, London,
Whether Ed Balls actually said "So weak!", or "So what!" in respose to Camerons comment "We have the highest tax burden in our history.", it's only really a matter of degree. "So what!" is contemptible; "So weak!" is merely arrogant.
John, London, UK
Carl in London
Everyone in NZ is an immigrant even the Maoris. They are not indigenous to the land.
martovich, Bristol,
If the economy is heading for a recession shouldn't Mr Darling be giving us our money back? If Mr Darling want consumer confidence to return then give us money in our pockets, we'll do the rest. I can't believe nobody has pointed out to the government that nobody really believes in green taxes, we all know it's just a fig leaf for a lot of revenue raising. This government has always been anti motorist, the green agenda gives them an excuse to vent their hatred of cars.
It's not just non-doms who will be leaving the country, at this rate nobody will be able to afford to live here, except politicians with their huge salaries,expense accounts and non executive directorships of blue chip companies.
Patrick Henderson, Coventry, United Kingdom
Jonathan in Auckland
So you just decided to run away and not get involved to change things? How very noble of you. Like a lot of Brits who are expats you run off to foreign countries bemoaning Britain, the state of the country, the cost of living and inevitably the immigrants forgetting that you are now an immigrant yourself! How does it feel living in a land stolen from its original inhabitants? But I am sure that you ignore that little fact while you bask in Kiwi isolation...
Carl, London, UK
How is he making the poorest pay more? The most polluting vehicles are usually the most expensive. There is also nothing to say the poor must smoke or drink excessively....I'm stuggling with my mortgage repayments but I don't go and get drunk every night in the hope that will persuade the bak to write off the outstanding amount.
Luke, London, UK
I have no problem with the Chancellor increasing the cost of booze and fags: it's a useful method of reducing excessive consumption and I admire Mr Darling for his courage in doing now what should have been done with booze every previous year.
Geoffrey Woollard, Cambridge, England
Let's face it, Gordon Brown has failed.
Can anyone be remotely surprised why he was so desperate to become PM before the economy hit the skids?
Far from abolishing the business cycle, Brown's public spending splurge while the global economy was doing well (note Global, because during the good times Brown was at pains to tell us all how well the UK was doing, and now it's all the fault of US sub-prime) has left no fiscal room for manoeuvre for bad times.
In addition, with gold now approaching $1000 per ounce, has everyone forgotten that he achieved an average sale price of just $276 per ounce, a $10bn difference?
Coupled with a disastrous regulatory change in wresting control of supervision of institutions such as Northern Rock from the Bank of England to a seemingly incompetent FSA, this surely must convince us that Brown is the real loser and Darling is, well, just the unlucky recipient of a ticking time-bomb.
F Redpath, London,
Darling is a LITTLE "green" man who took his ministerial limo a few hundred yards from Downing St to Westminster to deliver a load of Brown stuff.
Bob Christie, Burntisland, Fife
If the road tax increase was to be spent on roads then I wouldn't mind so much but I have a nasty feeling the Olympics will get it all.
GJB, SLOUGH, BERKSHIRE
After 4 years of economic expansion we have a deficit and going into a slow down there is nothing in the kitty.. whey hey GB was a fantastic chancellor... he was good for 3 years when he followed conservative plans and released the bank of england after that down hill
Francis, London,
Never voating labour again.
MR W B jones, Liverpool, England
With dreary predictability, Darling is starting to play the "green" card to raise taxation on anything that moves or is combustible. As usual, the hardest hit will be those on low fixed incomes and those marginally above the level to claim state benefits. The abolition of the 10% tax band will only exacerbate their troubles. So lads and lassies, you had better go on your packaged holidays abroad while you can still afford them, before the Great Green Scam cuts in. And don't forget to buy your booze and fags on your way back (that's if you want to come back). There is no "feel good factor" in Britain today, only cynicism.
Dwight Vandryver, Scholar Green, Cheshire, UK
The tax rises only affect things that are not essential.
The Huge borrowngs must be to fund wars we have no business to be in.
If only a Political party would come up with a good manifesto that they were bound by law to adhere to then we could make clear and informed choices.
Sadly picking a good one out of a bad bunch is about as effective as buying a lottery ticket when facing bankrupcy
Michael Wilkinson, Telford, UK
Attention British people wake up to the real World and kick this incompetent inept Government out before they bust us and the Country.
None of the current Cabinet have ever run a business let alone a Country!
God help us they are hell bent on bringing in road pricing despite a near 2m petition against it, what with fuel prices and extra duty, getting 3 points for a split second lack of concentration they want us all under house arrest!
All under the misleading banner of climate change and saving the planet which no other country in the World is having to suffer like we are!
Power corrupts absolute power corrupts absolutely.
Andy Moore, Birmingham, West Midlands
"The sooner people realise how good we've got it in this country the sooner we'll all start moving forwards"
Tim, I take it you've never lived anywhere other than the UK (I'm talking about 1st world nations here). If you had you'd realise the exact opposite is true. The sooner people in the UK stop being so apathetic about the decline in their quality of life the sooner everyone will start moving forward.
Unfortunately the reality is that most people just up and leave. After all you only live once - why waste it trying to fix a lost cause? I left five years ago and you wouldn't get me back there for love nor money!
Jonathan, Auckland, New Zealand
It is entirely fair to say this chaos is not Darling's fault.Look rather to the Man next to him who took just ten years to wreck the healthy economy he inherited.
EDWARD SYNGE, TISBURY, UK
The net foreign immigration reached 292,000 in 2005 is this the poor that Darling wants to keep raising taxes for? These people have to be housed, educated, use health service resources and integrated. The social housing promised who will get this, those with home or those without?
We allegedly have a drink problem Cider up 3p thats really going to break the bank and will not stop the alcho-pop generation who I generally never see with whisky or wine.
How come Darling gets driven everywhere and then talks about how green we have tobecome (Hypocrite), MPS expenses and privilages should not protect them from any of these rises then we would see how keen they become when they have to live like the rest of us.
steve tea, manchester, cheshire
The Government is right to put pressure on the feckless minority who cant be bothered to get off their backsides and do a bit of work to pay for their cheap lager, fags and housing benefits.
sk, East Sussex, East Sussex
The economy is facing a decline and given the choice of generating additional revenue by stimulating growth or increasing taxes, he chose the latter; a course of action which one might be pardoned for thinking was designed to take the country into recession.
david elliott, brighton, uk
Everybody seams to be saying nothing much this time, but at least one thing has changed the new chancellor has stopped raising taxes then hiding them for a year so he hopes you forget its comming. Having said that all the analysis over yesterday has to take into account the previously announced income tax changes to see how people are going to be hit this year. Oh and by the way the chancellor is already getting his fuel increase by the vat increase revenue on the current prices, another area we have forgotten.
Bob, Bexleyheath, Kent
Robert Hammond, Bexleyheath, Kent
Increasingly this Government seem to want to emulate the Sherrif of Nottingham and make the poorest people pay for the next hair brained scheme. Is there a Robin waiting in the wings? Lets's hope so
David, Burnley, UK
no jan your definately right, lets vote in a bunch of people who will sell off government assets for a quick profit....
the government is responsible for alot of things however, lets be honest me and you both pay for private pensions. Look across the world mate, we've got it lucky to even have money to put towards pensioners.
The sooner people realise how good we've got it in this country the sooner we'll all start moving forwards
Tim, Liverpool, Merseyside
Surely it is a joke to say that inlation may rise "above the 2 per cent target"? Real inflation is already much nearer 10% than 2%. The Labour government have deliberately misrepresented both the inflation and the unemployment figures.
Martin, Newmarket, Suffolk
why hasn't the fact that pensioners are paying more than one weeks pension per month in council tax, been addressed in this budget? they are being robbed by this government. What working man / woman or couple would pay one weeks wage out of a monthly wage packet in council tax on a two bedroomed small bungalow. My mother gets 25% single occupants allowance but even with this on a small two bedroomed bungalow she still had to pay more than one weeks pension per month council tax, the pension isn't enough to live on anyway. she has just had to move to a smaller flat to get into a lower bracket. My whole family have voted labour but not anymore. So there is help with heating bills once a year. Which is the government freely admitting that pensioners haven't even enough to keep warm. What about paying them a decent amount to live on, so they can afford to pay their own huge bills. thats what you get for working and contributing all your life in this country its dispicable.
jan wright, Dover, Kent
Its simple: Vote them out!
Andrew, Barcombe, East Sussex