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Last Updated: Wednesday, 12 March 2008, 19:44 GMT
MPs to scrutinise Budget measures

Alistair Darling
This was Mr Darling's first Budget as chancellor

Big increases in duty on alcohol and high-polluting cars have been announced by Chancellor Alistair Darling.

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.

He announced a one-off 950 tax on the most polluting new cars but put a 2p rise in fuel duty back six months.

Mr Darling, who insisted the UK could "weather economic storms", also increased winter fuel payments.

But Conservative leader David Cameron dismissed his Budget statement as a "a dire list of reviews and reannouncements".

Delay 2p rise in fuel duty for six months
6% increase in alcohol tax - with 2% above inflation rise for each of 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
950 higher first year rate of road tax for most polluting cars
New top band for the most polluting vehicles that emit more than 255g of carbon dioxide per kilometre
Air passenger duty scrapped in favour of flight tax
Winter fuel payment up to 250 for over-60s and to 400 for over-80s
Require supermarkets to charge for plastic bags if they do not scrap them
More cash to tackle child poverty
Help with rising energy costs for poorer families

"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.


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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.

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.

This year's Budget is a responsible Budget that will secure stability in these times of global economic uncertainty
Alistair Darling

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 a new per-flight tax regime, replacing Air Passenger Duty (APD) from November 2009.

But the Green Party MEP Caroline Lucas said Mr Darling's "small steps forward" had been "absolutely overshadowed" by allowing the expansion of Heathrow and Stansted airports.

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. The first increases come into effect on Sunday.

Gavin Partington, from the Wine and Spirit Trade Association, told BBC News it appeared to pre-empt the findings of the government's own study into the relationship between price, promotion and harm.

"It seems that they've made up their mind already, and have decided to not just punish the industry but punish consumers," he said.

But alcohol addiction expert Professor Martin Plant said it the move would influence heavy drinkers and young drinkers, who have less money and are the most vulnerable.

On the environment, Mr Darling 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%.


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.

Today's Budget only puts more debt onto tomorrow's generations
Iain Connochie

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.

The children's charity Barnados "warmly welcomed" the Budget and said the government's target of halving child poverty by 2010 was now "back within reach".

Mr Darling said inflation would rise before returning to its 2% target in 2009 and remain on target thereafter.

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