Budget 2010: Alistair Darling to Freeze Income Bands in 'Stealth Tax'

The Chancellor has decided to freeze all income tax bands, which will lead people to pay more tax on their earnings.


The tactic is being described as a classic 'stealth tax' by the Daily Telegraph and will be far larger than previously attempted. Personal allowances were last frozen almost a decade ago.

Every higher-rate taxpayer earning more than £43,875 will pay an additional £489 in tax as a result of the move, and 75,000 more people will pay this higher-rate tax for the first time.

The level at which inheritance tax becomes payable will also be frozen.

The moves are expected to be confirmed in the small print of the Budget and the rates will apply from next month.

The income tax grab comes on top of the new 50p higher rate of income tax which will come into effect next month for those earning more than £150,000.

Mr. Darling will also remove tax breaks for those earning more than £100,000. The targeting of people earning more than £100,000 is expected to raise an additional £1.2 billion.

Mr. Darling is also expected to confirm that Government borrowing is on course to total more than £1 trillion over the next few years following the 'extraordinary' actions taken to tackle the financial crisis. But speaking to Parliament at 12:30 this afternoon, he will refuse to sanction any immediate cuts to public spending, warning that it may endanger the recovery.

The Chancellor, who may have to cross a picket line of striking civil servants in order to deliver his third Budget, will today deliver what he promises will be a 'sensible, workmanlike' package of financial measures.

Mr. Darling is still expected to unveil billions of pounds in new public spending. He will announce that £1 billion of taxpayers’ money will be used for a new green investment fund. Extra money will also be earmarked to help the long-term unemployed. Schools are also set to be given extra funding.

The extra spending will be paid from the extra tax take. Government borrowing is also expected to be about £10 billion less than expected which has given Mr. Darling some room for manoeuvre.

Among the measures he is expected to announce is a new drive to stop tax evasion; a move to force banks to offer bank accounts to anyone who wants one in an effort to help those who see it as a barrier to employment; and he will update MPs on how far he has progressed to get international agreement on a global bank levy.

But discussions are still taking place over whether Mr Darling could afford to halt a planned 3p rise in fuel duty. If he does go ahead with it will mean motorists will have to pay even higher pump prices at a time when they are already heading through the 120p a litre barrier because of soaring oil prices.

There is also likely to be bad news for drinkers with a planned 5% increase on all wine and spirits.

Mr Darling is expected to revise down slightly the borrowing figures and will use it as a sign that the worst for the economy is over and that a feared 'double-dip' recession will not happen.

In a statement last night the Chancellor could not resist a barbed comment directed at Prime Minister Gordon Brown. Mr. Darling said Britain had come

"through what had been the most difficult circumstances for well in excess of 60 years."

When the Chancellor stated in the autumn of 2008 that the crisis would be the worst for 60 years he was attacked by Number 10. Last month, in an uncharacteristic intervention that lifted the lid on tensions between him and Mr. Brown, he admitted 'the forces of hell' had been unleashed on him by the Prime Minister’s advisers.

Mr. Darling attempted last year to play down the impact of freezing tax allowances as inflation was actually negative. However, inflation has now begun rising sharply which means the freezing of the tax bands is set to become a major financial issue. Inflation is currently running at three percent.

All of the main income tax bands will be frozen for the next year – including the tax-free allowance and the level at which higher-rate tax becomes payable.

This so-called 'fiscal drag' means that people pay proportionately more tax on their earnings, after receiving a pay rise. Most pay deals are linked to inflation. Income and other tax allowances typically rise in line with inflation.
If keeping pace with inflation, the tax-free personal allowance should rise from £6,475 to £6,669. However, by freezing the rate at £6,475, the Treasury will raise an additional £1 billion and every taxpayer will pay an extra £40 in tax.

The rate at which higher-rate tax is paid will also be frozen at £43,875. However, it should increase to £44,995. The Treasury will make an extra £450 million as a result - £489 for every higher-rate taxpayer, according to accountants.

The inheritance tax threshold is being frozen at £325,000 – which will raise £60m in extra revenues for the Treasury.

Last night, Mr. Mike Warburton, tax partner at Grant Thornton, the accountants, said:

"Inflation was negative last year so this was not an issue – but it certainly is not negative now. Freezing the allowances in this way shows ministers are back to their old stealth tax tricks."

The Conservatives will today warn of the extreme danger to the British economy if the debt problem is not addressed more quickly. The opposition have drawn up new research that shows the Government’s debt interest payments could reach more than £106 billion a year within five years.

Using what has happened in Greece as an example of how Britain’s debt problem could spiral. That figure would represent a trebling of the Government’s annual debt interest bill and it would be more than the annual NHS budget in England.
It would mean the cost of paying the interest on the national debt interest would rise from the equivalent of £24 per family per week to over £80 per week, or from £1,250 per year to £4,320 per year.

The Conservatives last night also announced that they are inviting people to dissect the Budget via the Tory party website – known as 'crowd sourcing'.

Drinkers Alliance Attack Government Plans To Raise Taxes on 'Middle Class' Alcohol

Alistair Darling, the Chancellor, is under strong pressure from 10 Downing Street to 'make an example' of whisky, gin and vodka drinkers when he makes his Commons statement later this month, the Drinker's Alliance claim.

The debate over the plans is further evidence of the tension between Prime Minister Gordon Brown and Mr. Darling, which boiled over last week when the Chancellor said No.10 had unleashed the 'forces of hell' on him after he predicted the recession would be the worst for 60 years.

Under the 'nuclear option' plan for increasing duty – designed to appease the health lobby and show that ministers are serious about tackling the problems caused by binge drinking – the cost of a bottle of spirits would rocket, along with the cost of spirit-based alcopops favoured by young drinkers.



A bottle of Bells whisky could rise from £14.79 to £23.73 while Gordon's gin, another favourite of middle-class drinkers, would increase from £12.79 to £21.17.

Even if Mr Darling imposed a less draconian rise, industry sources are braced for increases significantly above the five per cent already earmarked for beers, wines and spirits under the government's alcohol duty 'escalator'.

That ensured a two percent rise in duty above the level of inflation every year in the Budget for four years starting last year. Under Whitehall calculations, this year's escalator would be set at five per cent.

However, leading figures at No.10 are pressing the Chancellor to hammer spirits much harder, after a series of recommendations by MPs on the health select committee last year, Drinkers Alliance claim.

They say the report demanded that 'unlike in recent years, duty increases should predominantly be on stronger alcoholic drinks, notably on spirits'.

MPs called for a return to the level in 1983 when the duty on a litre of pure alcohol was 11 percent of the average male weekly manual wage, compared with 5 percent in 2002.

Such a move would send Britain to the top of the European league table for spirits tax.

Mr. Darling is understood to be fighting the calls for the very steepest possible increases – but Whitehall sources nevertheless expect him to introduce big rises in duty on spirits, in part to raise money to help cut Britain's record deficit.

The Budget – a key springboard for Labour's election campaign – is currently pencilled in by government planners for either Wednesday, 24th March 2010.

As The Sunday Telegraph has already revealed, Mr. Brown and Mr. Darling are at odds over the package, with the Prime Minister keen for it to contain spending increases on voter-friendly areas such as schools and hospitals, as well as jobs programmes for young people.

The Chancellor, however, is holding out firmly against a 'giveaway' Budget in favour of a 'realistic' statement to reassure markets that Labour is serious about reducing Britain's £178 million deficit.

There are claims the Treasury is also drawing up plans to increase VAT from 17.5 per cent to 20 per cent – something those close to Mr Brown would fiercely resist just before the general election.

Mr. Darling reopened hostilities with No.10 with his 'forces of hell' comments – understood to have been aimed at Messrs. Charlie Whelan and Damian McBride, Mr. Brown's former spin-doctors.

Hitting middle-class drinkers with big rises in the cost of spirits would be electorally risky. However, leading figures inside No.10 are understood to be concerned that Labour is not sending out a clear signal that it is ready to get tough on binge drinkers.

The Conservatives, by contrast, have already pledged to increase the duty on alcopops and super-strength beer and cider without necessarily lifting the duty on spirits.

A four-pack of super-strength lager would rise by £1.33 and a large bottle of alcopop would increase by £1.50, under Conservative plans.

Mr. Jeremy Beadles, Chief Executive of the Wine & Spirit Trade Association, said:

"We are a vital industry to the UK's recovery. It is clear the Chancellor is under real pressure to significantly increase the duty on spirits.

"Thousands of jobs are at risk. The hard-working people of this country should not be made to pay for the recession.

"They should be able to enjoy a drink in these times of hardship without being penalised by extra costs. They are already paying enough in taxes. Enough is enough."

Brown Facing Backbench Revolt - Update

This is an update to 'Brown Facing Backbench Revolt'.

I concluded my post yesterday saying:

"Whether the SnowStorm Plot melts with the snow, or whether new developments,
possibly tomorrow, keep the hopes, and the story, alive for those who would
rather have a new leader for Labour, only time will tell."

It seems clear now that the revolt has died, although not without a handful lingering developments throughout the day.

As morning broke across the country, shortly before seven o'clock, with britons opening their curtains to another snow-covered scene Nick Clegg MP, the Liberal Democrat's Leader emerged on GMTV and weighted into the matter - better late than never. He echoed the view of the Conservative Party Chairman yesterday and said:

"We don't need a secret ballot, the country needs a General Election... The Labour party now is more interested in talking about itself."

He refused to answer questions about any possiblity of a Liberal Democrat - Conservative alliance in the event of a hung parliament, saying that the Liberal Democrat platform of "

fair taxes... smaller class sizes... a new economy and a completely new politics after the expenses scandal"

was what voters wanted him to be talking about.

Half an hour later Labour's Eric Joyce MP criticised what he called 'aristocrats at the top of the party' who he said believed they could stay quiet and let others get rid of the Prime Minister, but added that ultimately the failed attempt to unseat Gordon Brown would unify the party.

"The whole party will be much more unified, and the ambiguity will be
gone.

"[The] aristocrats at the top of the party who thought that if they act coy
they could inherit the leadership of the party.

"It’s quite destabilising for people to give hints to people like Geoff
and Patricia.

"There’s an element of internal ambition where people aren’t prepared
to take their own risk."

Twenty minutes later Cabinet Ministe Shaun Woodward MP insisted that he sits in a happy Cabinet, and that the reaction to the Hoon/Hewitt plan showed the Labour party supports Gordon Brown.

As the story began to die down as it started to be starved of the oxigen of publicity Jack Straw MP, Justice Secretary, accused the BBC's Nick Robinson of 'a very substandard piece of journalism', after the BBC Political Editor named Mr. Straw as one of six cabinet ministers willing to support yesterday’s call for a secret ballot on Gordon Brown’s leadership on the BBC's News at Ten. He said:

"I was named by Mr Nick Robinson of the BBC - he sent me an apology."

He went on to say that the Hoon/Hewitt plan had failed, and would have the ultimate effect of greater unity in the party.

"This extraordinary announcement yesterday by Geoff Hoon and Patricia
Hewitt has sunk. It was completely ill-judged and completely ill-advised.

"I think it will have the affect of bringing people behind his
leadership even more.

"It is something we could easily have done with out – what we have got
to is keep on and make the case for a Labour government."

At ten o'clock however it was Iain Martin of the Wall Street Journal who had the most significant and interesting detail from yesterday, he reported:

"I’ve heard from two Labour sources now that the conversation was very difficult
and that Darling raised the possibility of Brown going, but the PM resisted. It
would be taking it too far, says a well-placed MP, to say that the mild-mannered
Darling told his old friend turned foe to call it a day. He said it was more
that Darling floated the possibility of a swift departure for the sake of the
party."

This was later rubbished by Niall Paterson of Sky News that an Aide to the Chancellor described it as 'categorically, unequivocally not true'.

Even the last Labour Deputy Prime Minsiter , John Prescott MP, entered the fray with a video blog on YouTube condeming the plotters suggesting that 'Patricia Hewitt, Geoff Hoon and Charles Clarke should be the ones facing secret ballots in their own constituency parties'.

As the morning continued David Miliband MP, Foreign Secretary insisted that all the Cabinet were united in their determination to win the next election under Gordon Brown’s leadership saying:

"No member of the government was involve in the letter - we are all determined
to win the election under Gordon’s leadership."

On BBC 2's the Daily Politics Tony McNulty MP, denied that endorsements of Gordon Brown from cabinet members yesterday were lukewarm. There had been suggestions that statements from Mr. Brown's colleagues fell short of being ringing endorsements of Mr Brown's leadership throughout the morning.

Mr. McNulty instead suggested cabinet members are simply 'fed up' with having to say that Mr Brown is the right person for the leadership and added:

"The shame is this was on the end of a gaffe-prone week for the Conservatives."

After midday the Prime Minister, Gordon Brown MP, made his first public comments in a long-scheduled phone-in with BBC Radio Solent he said he was 'leading from the front' and would say 'what I think' even if at times it proved to be unpopular. He said:

"[E]very day there is a new problem, every day there is a new challenge - it is
how you deal with it [that was important]."

Asked about events on Wednesday, he said:

"I was actually holding meetings, first of all about Afghanistan and about some
of the terrorist implications of what had happened in America.

"And then, to be honest, for the rest of the day, I was dealing - as I am this morning - with how we can co-ordinate better our supply for dealing with these emergencies, so it's taken up very little of my time.

"I think it's one of these sidelines in this time when people are far more worried about - as they should be - about what we're doing to deal with the weather and how we're making sure that people are safe and secure.

"So it's not going to take up much of my time and hasn't certainly taken up much of my time today or will in future days."

And so around half past twelve today the SnowStorm Plot seemed to be over with the Prime Minister having the last word. But wait, no, what is this dark figure mincing towards us? None other that the master of the Dark Arts, (and presumably necromancy based on the number of time he's been back from the dead), Lord Mandelson who, as the sun set, reignited the flames of this narrative (which Gordon Brown had seemingly smothered at lunch time) saying that he was sure that Gordon Brown was the right man to lead Labour into a 'very vigorous, very effective' general election campaign.

"Yes I’m sure that Gordon Brown is the right man to lead us into an election campaign.

"[He] has a vision, has a huge knowledge of the economy… he has real drive, real determination.

"[Gordon Brown] will lead us into a very vigorous, very effective election campaign."

At the end of the day The Telegraph reported that Harriet Harman MP, Labour’s deputy leader, was being blamed for encouraging an attempted coup against Mr. Brown this week, with David Miliband MP, Foreign Secretary, also under suspicion of plotting.

GE2010: General Election Summary Day #2

Conservatives could spend twice or even three times as much as Labour. The Times had the story of the day with speculation that the Conservatives might be able to spend two to three times as much as Labour on the election campaign. Expect Labour to accuse the Conservatives of 'buying' the electorate.

There was renewed speculation about Gordon Brown's position as Labour leader. There is probably a majority of Labour MPs who accept that Brown is a loser but no majority behind an alternative candidate. We are now too close to an election unless one Labour figure can have a Michael Howard-style coronation as leader. Otherwise the electorate will look at a leadership contest with disdain, even disgust.

Nick Clegg, the Liberal Democrat's Leader refused to be drawn on coalition thinking. In his most important intervention of the campaign so far the Liberal Democrat leader wrote that there would be

"no backroom deals or under-the-counter “understandings” with either of the other two parties."

A key message for the Conservatives in Lib-Dem/Con marginals is that a vote for Clegg might keep Labour in by the back door.

Greg Clark and Nick Herbert were the Conservatives stars of the day. Nick Herbert got good coverage this morning for his pledge to create a supermarket ombudsman to prevent large retailers from abusing their market position and Greg Clark has got big coverage all afternoon for riding the cold weather stories with a dire warning about dangerously low gas reserves.

The Conservative poster campaign, launched on Monday, continues to get lots of attention. The Daily Mail says it is costing half a million pounds. The Times was reporting that Mrs. Cameron approved the photo. The Times' Sam Coates explored whether the image of the Conservative Party's leader was airbrushed.

Alistair Darling refused to rule out increasing VAT to 20%. It had been reported that Labour planned to frighten voters with allegations of secret Tory plans for a VAT hike. That will be impossible if they can't rule it out themselves.

The Morning After the Pre-Budget Report Before.

If the chancellor had a pound for every negative verdict on his budget plans in this morning's papers, the United Kingdom's finances might be in better shape!

The Times says Alistair Darling's pre-Budget report is the latest instalment in a farcical but unfunny comedy series it dubs 'Carry On Spending'. Whilst The Daily Express reports a 'furious backlash' over an epic election spending splurge.

'Pain postponed' is the view of the Independent front page.

A Guardian editorial suggests the chancellor 'did enough... to secure a few not-entirely-awful headlines'. But that prediction is only really backed up by the Daily Mirror, the front page of which offers in tabloid style: 'Bank you Darling!'

"Some early Christmas cheer"

was delivered, it says, by a tax on bonuses

"bashing the bankers who dragged us to the brink of economic meltdown".

More typically, the Daily Telegraph brands it a 'political survival plan' not an 'economic recovery plan'. The Daily Mail suggests that it was a time for:

"acutely painful and inevitably unpopular measures necessary to pull Britain back
from the brink of bankruptcy".

But the chancellor

"shut his eyes to the reality of our plight"

Amid

"the biggest economic crisis of our lifetimes"

Mr Darling's answer is replacing old boilers, jeers The Sun.

And finally The Daily Star offers its readers 'one silver lining', pointing out that:

"Darling's likely to be unemployed himself by next summer!"

Pre-Budget Report 2009 Summary

A summary of the key announcements in Alistair Darling's pre-Budget report.

TAX

• All national insurance rates to rise by a further 0.5% from April 2011, raising £3bn a year


• VAT to return to 17.5% from 15% from 1 January 2010. No other changes to VAT


• One-off 50% tax on bank bonuses of more than £25,000


• Stamp duty holiday on certain properties to end on 1 January 2010


• Bingo duty to be cut from 22% to 20%

ECONOMIC FORECASTS

• Economy forecast to shrink 4.75% in 2009, worse than 3.5% forecast in April


• Growth of 1%-1.5% expected in 2010 and 3.5% in 2011 and 2012

BORROWING

• 2009 forecast raised by £3bn to £178bn


• Estimated borrowing of £176bn in 2010 and £140bn in 2011, falling to £96bn in 2013


• Budget deficit to be halved by 2013


• Estimated public loss from bank bailouts reduced from £50bn to £10bn

SPENDING

• Total spending in 2010-11 to rise by £31bn.


• No spending review for period after that


• Current spending estimated to fall by 0.8% between 2011-2 and 2014-5

PAY, PENSIONS AND BENEFITS

• Basic state pension will rise by 2.5% in April 2010


• Child and disability benefit to rise by 1.5% in 2010


• Contributions to public sector pensions to be cut by £1bn a year


• All public sector pay settlements to be capped at 1% for two years from 2011

ENVIRONMENT

• £160m investment in low-carbon and renewable projects


• £200m extra investment for Warm Front insulation scheme, helping 65,000 households


• Boiler scrappage scheme for 125,000 households


• Electric cars to be exempt from company car tax for five years


• Tax rebate for installation of wind turbines and solar panels

EMPLOYMENT

• Under-24s to be guaranteed work or training after six months out of work


• Training or education guarantee for 16 and 17-year-old to be extended to 2010

BUSINESS

• New 50p tax on landline phones to pay for superfast broadband


• New 10% tax on income from patents to boost science development


• 1p increase in corporation tax for small firms to be deferred

FAMILIES

• Free school meals to an extra 500,000 low income families
  

Edward Leigh Demands Answers Over £61.6bn Secret Loans

Local Parliamentarian, Edward Leigh MP, Chairman of the Public Accounts Committee, has today written an angry letter to the Chancellor of the Exchequer, Alistair Darling MP, demanding to know why the £61.6bn loans to Halifax Bank of Scotland (HBOS) and Royal Bank of Scotland (RBS) have only just been made public.

Mr. Leigh has asked Alistair Darling to clarify if this is the case. His letter says:

"Thank you for your letter of 23 November informing me that the Treasury granted the Bank an indemnity in October 2008 against losses it might incur in providing emergency support to RBS and HBOS. I followed this up with you in the House today and I must say that I cannot regard your answer as a full and sufficient explanation. I shall therefore await your further advice before deciding how to properly discharge my responsibilities in this situation.

"While the Banking Act 2009 (which was not in any case in force at the time) allows Ministers to delay or dispense with the need to report to Parliament in relation to Treasury support for banks paid directly from the Consolidated Fund, in my view this does not override long established protocols governing contingent liabilities.

"Under established rules, which are codified in the Treasury’s own guidance for departments, "Managing Public Money", Parliament would expect to be notified at the time an indemnity is granted. In circumstances where the existence of an indemnity needs to be kept confidential, the rules specify that such notification should be made to the Chair of PAC and the Chair of the relevant Select Committee. In practice under these rules, I and former Chairs of my Committee have been notified of indemnities and other liabilities on a confidential basis and none of us have breached the trust placed in us.

"I am greatly disturbed that the decision was taken to by-pass the rules in this case and would appreciate a full explanation from you. The rules also require Ministers to notify Parliament formally when the need for confidentiality lifts and I would like to know whether in your view this was the earliest opportunity for these matters to be brought into the open or whether it had more to do with the timing of the NAO work on the banking support measures which I understand is to be published next week. I look forward to your early response."

Santa Claus puts Gordon Brown on the 'Naughty List'

Santa Claus has this year placed Gordon Brown on the naughty list, and thus the Prime Minister will not be receiving any presents.
Conservative Future activists obtained a leaked document showing that the Prime Minister has been moved to the naughty list in reaction to the large debt he is placing on future generations.

The leaked document, from Lapland's Department of Poetic Justice, shows that other prominent politicians have also been added to the naughty list:

Alistair Darling – for his part in saddling the future generation with huge debt and tax increases.

Michael Martin - for not teaching the Sergeant at Arms that the Police need a warrant before searching a premises/Parliamentary office.

Jacqui Smith - for her bullying students to get an ID card in order to obtain student loans.

Commenting Lincolnshire Conservative Future Area Chairman, Giles McNeill, said:

"OK, so this story is a bit of fun, but it has a serious message at its centre: the politicians who are on this list have performed a grave disservice to young people of both Lincolnshire and this country.

"The people on this list have eroded democracy, scored cheap political points, recklessly borrowed for electoral gain and, just for good measure, are leaving the next generation with a huge bill to pick up - all in a vain attempt to remedy the follies of the last eleven years."

Bad news Budget: £110 extra in taxes on families across West Lindsey

Giles McNeill giveshis analysis of Government’s tax and spending plans



Giles McNeill, Nettleham Parish Councillor and Prospective District Council Candidate, this week delivered his verdict on the Budget which sets out the Government’s plans for taxes and public spending. Giles highlighted a series of areas where local residents across West Lindsey will lose out:

• Clobbering responsible drinkers: Instead of targeting irresponsible binge drinkers, responsible drinkers are being hit with inflation-busting increases in alcohol duties, raising £1.5 billion in extra taxes over the next three years.

• Little help for pensioners: The Winter Fuel Allowance has been increased for the first time in five years. But the increase is only a one-off for this year. Meanwhile, the burden of council tax bills is set to rise by another £1.2 billion this year, with council tax rises coming on top of hikes in previous years.

• Harder to get onto the housing ladder: This Budget fails to address the growing burden of stamp duty on first-time buyers - half of whom now pay stamp duty. More family homes will be paying 3 and 4 per cent stamp duty, as the thresholds are unchanged.

• Higher income tax and National Insurance for many: Tax changes on National Insurance and income tax announced in the last Budget are still to come into effect. Independent experts have calculated that 3.5 million families will be worse off as a result.

• Drivers face new stealth taxes: The Government is to fund new technology to impose controversial ‘spy-in-the-sky’ national road pricing taxes. Meanwhile, family cars face extra taxes of £735 million a year, but the tax cuts on small cars are only worth £15 million a year.

Giles McNeill said:

“The cost of living is rising fast, but Gordon Brown’s Government has added to it with a barrage of new stealth taxes. This is a bad news Budget that adds £110 a year to the tax bill for families across Lincolnshire.

“Any extra taxes on alcohol or cars should be offset by tax cuts elsewhere, but Labour has just used them as an excuse to raise more money for Gordon Brown’s coffers. Taxes and borrowing are up because the Government failed to use the good years to prepare for the bad years.”

Giles McNeill on: Budget 2008 Part II

Big increases in duty on alcohol and high-polluting cars have been announced in the Budget 2008.

Alistair Darlings first Budget has 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. He announced higher road tax for the most polluting cars but delayed for six months a 2p rise in fuel duty.

The over-60s will get £250 instead of £200 and the over-80s will get £400 instead of £300 for winter fuel payments.

He also ordered energy companies to increase the help they give to people using pre-paid meters from £50m to £150m a year.

On the environment, he announced legislation to come into force in 2009 to impose a charge on single-use carrier bags if progress is not made on a voluntary basis.

Mr Darling said he was setting aside new funding to develop road pricing schemes.
On the wider economy, Mr Darling cut by 0.25% his October forecast that the UK economy would grow by up to 2.5% this year and 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 - £7bn more than forecast last year - with a similar increase the following year.

• Delay 2p rise in fuel duty for six months

• 6% increase in alcohol tax - with 2% annual rise for next four years

• 4p on pint of beer, 3p on cider, 14p on wine, 55p on spirits

• 11p on packet on 20 cigarettes, 4p on five cigars

• Higher first year rate of road tax for most polluting cars

• Increase in green tax on flights

• Winter fuel payment up to £250m for over-60s and to £400 for over-80s

• Require supermarkets to charge for plastic bags if they do not scrap them

Conservative leader David Cameron has said the

"cost of living is going up and Labour is making it worse".

He said the facts hidden in Alistair Darling's first Budget were high debt, high interest rates, high taxes and lower growth and accused him of

“a dire list of reviews and reannouncements”

and said borrowing rates were truly dreadful.

“In the years of plenty they put nothing aside, they didn't fix the roof when the sun was shining,”

The Conservative leader accused the chancellor and prime minister of living in an entirely different world from everybody else.

Giles McNeill on: Budget 2008

Gordon Brown had a decade as Chancellor and jumped ship before things got difficult. But Labour’s record on the economy is bad. Despite fifteen years of economic growth Britain has the largest budget deficit in Western Europe and Gordon Brown has failed to prepare the UK for any global economic instability we may encounter.
Despite fifteen years of economic growth, Gordon Brown has massively increased borrowing. In the past five years Gordon Brown has borrowed £100 billion more than planned. The current budget has not been in surplus since 2001/02. This year’s borrowing forecast has increased by at least £8 billion in the last 20 months. In March 2006 Gordon Brown claimed he would have to borrow £30 billion in 2007-08; in March 2007 he upped this figure to £35 billion, and in October 2007 Alistair Darling upped the estimate again to £38 billion. The IFS estimates that if current spending trends continue borrowing will rise to £41 billion.

The ‘golden rule’ (that the Government should only borrow to invest, and not to fund current spending, over an economic cycle) would have been missed by almost £4 billion without the convenient decision in summer 2005 to add two years to the beginning of the economic cycle.

In 1997 the retail price index showed inflation at 2.6%, last year it was at 4.0%. Inflation is higher under Labour. Earnings are also falling. Consumer debt is also rising in March 1997 total household debt was under £500bn now it is nearly £1,400bn – that £1.4 trillion! Under Labour, lending has been rising at a rate of over 10 per cent per annum, making the debt mountain now greater than Britain’s total gross domestic product. We are all feeling the pinch in our pocket at the supermarket checkout or at the petrol pump.

During his ten years as Chancellor, Gordon Brown introduced 111 tax rises, including the abolition of tax credits on pension funds’ dividends and increases in stamp duty. Gordon Brown also burdened the UK with the longest national tax code in the world. His 2007 Budget took the UK’s tax code to just short of 10,000 pages, surpassing India, which previously held the record with just over 9,000 pages of tax legislation.

According to independent experts, taxes have risen by £5,400 since 1997 for every family in the UK after allowing for inflation and the poorest fifth of households pay a higher proportion of their income in taxes than any other group – under a Labour Government!

Under Gordon Brown chancellorship, ‘green taxation’ has fallen from 9.4 per cent of total tax receipts in 1997 to 7.3 per cent in 2006 – which is why today Alistair Darling will be presenting his so called ‘green budget’.

But it’s not just hardworking families – high tax rates are the ‘most problematic factors for doing business’ in the UK according to the World Economic Forum.

I, like my party, will not promise up-front, unfunded tax reductions. Our commitment to sound money means that we will always put the stability before promises of tax cuts. That's why I am so concerned about the way the Market Rasen Pool project is being handled - £4.1m to build a £4.7m pool which will run at a £250,000 deficit each year that will be picked up by council tax payers in Nettleham who are unlikely to use it.

We need to build a sustainable, low-tax economy. Therefore, as the economy grows, and increased revenue flows into the Exchequer, the Conservative Party will share the proceeds of that growth between increased spending on public services and reduced borrowing or lower taxes.