Darling Delivers First Budget

Chancellor Alistair Darling has delivered his first Budget with large increases on duty on alcohol and high-polluting cars, a pledge to eradicated child poverty and the postponement of a rise in fuel duty.

In his first Budget since taking over as Chancellor when Gordon Brown became Prime Minister last June, Mr Darling said that the UK would be able to "weather economic storms", but he revised his October prediction that the UK economy would grow by an amount between 2% and 2.5% to one between 1.75% and 2.25%.

The Chancellor's speech mainly focused on wiping out child poverty and tackling climate change. Higher road tax for the least fuel-efficient vehicles was announced, but a 2p rise in fuel duty was postponed until October 1.

From 2010, the lowest-polluting new cars will pay no road tax in the first year, while the highest-polluting cars will pay more. Funding has also been set aside for road-pricing proposals.

Mr Darling also announced legislation that would force supermarkets to charge for carrier bags. This would come into force in 2009, if progress on the issue was not made voluntarily.

The Climate Change Committee will also advise the government on the possibility of raising the target of reducing carbon emissions from 60% to 80% by 2050.

Child benefit will also increase to £20 per week for the first child from April 2009, meaning that a working family with one child on the lowest income will benefit from an additional amount of up to £17 per week.

Poorer households will also benefit with help for increasing energy costs. The Chancellor said that energy companies needed to provide a better deal for customers with pre-payment meters and ordered companies to increase the amount of financial help for this group, from £50 million to £150 million per year.

The Savings Gateway scheme will be launched nationally by 2010, to offer incentives to those on low incomes.

Pensioners will also receive a boost with an increase in the winter fuel allowance, from £200 to £250 for the over 60s and from £300 to £400 for the over 80s.

However, there was bad news for smokers and drinkers, with the news that the price of cigarettes will increase by 11p for a packet of 20 from 6pm on Wednesday.

From Sunday, beer will rise by 4p a pint, wine by 14p a bottle, cider by 3p a litre and spirits 55p per bottle.

Further reforms for housing benefit were announced and the Chancellor confirmed that there would be work capability assessments for all long-term recipients of incapacity benefit by April 2010.

A 1.9% rise in public service spending after 2011 was announced. An extra £200 million will be made available to schools to raise GCSE results and an extra £2 billion will be spent on frontline UK troops.

The Chancellor confirmed that borrowing next year would rise to £43 billion - around 2.9% of national income.

From April, it will also become easier for key workers, such as teachers and nurses, to get shared equity mortgages and stamp duty on shared ownership will not be required until people own 80% of their homes, as from today.

Conservative Leader David Cameron attacked the Chancellor's Budget, saying that he was increasing the cost of living for the British public.

Mr Cameron said that taxes had risen "without any return for the taxpayers" and that inflation had increased "hitting the public hard".

Mr Cameron said that the blame for Britain's huge public debt lay at Gordon Brown's door. He said: "The Prime Minister who got us into this mess cannot possibly be the Prime Minister to get us out of it."

Meanwhile, the Liberal Democrats have said that the Budget is a "green cop-out" which also offers "no help to millions of hard pressed families struggling to make ends meet".

Party leader Nick Clegg said: "This is not a green Budget. This is not a people's Budget.

"This is a con trick Budget that protects the rich and abandons the poor. The government has bottled it on green taxes and failed to implement the necessary measures to cut child poverty."

(KMcA)