BBC News
watch One-Minute World News
Last Updated: Thursday, 13 March 2008, 11:00 GMT
Darling defends 'bad news' Budget

Alistair Darling
Mr Darling said he wanted to promote stability in his Budget

Alistair Darling has defended what the shadow chancellor, George Osborne, has called a "bad news Budget".

The chancellor told the BBC there was help for people "facing difficulties at the moment" such as pensioners and poorer families with children.

In his first Budget Mr Darling raised taxes on high-polluting cars, alcohol and cigarettes and announced new tests for incapacity benefit claimants.

But Mr Osborne said he had "kicked Britain's families while they're down".

And disability campaigners expressed alarm at plans to extend from 2010 a new eligibility test to all long-term recipients of incapacity benefit.

There has been a mixed response to some of the "green measures" and his decision to postpone a fuel duty rise.

'No apology'

The chancellor said he had presented a Budget for "stability", but reduced forecasts for economic growth for this year by 0.25% - to between 1.75% and 2.25%..

And he insisted he would "make no apology" for referring to stability "time and time again".


Most computers will open this document automatically, but you may need Adobe Reader

"We are going through a very turbulent time," Mr Darling told BBC Radio 4's Today programme.

"When you get this period of uncertainty then the right thing to do is to allow your tax policy and your fiscal policy to support the economy."

He said the "underlying strength" of the UK economy would ensure "we can get through this difficult period".

But the Conservatives said Mr Darling's predecessor - Gordon Brown - had left him "little room for manoeuvre" and said Britain was badly prepared for economic uncertainty.

Mr Osborne told BBC One's Breakfast programme that the public would greet the present chancellor's measures with scepticism.

He said the Budget had been delivered "at the very moment when they're feeling the squeeze, when the cost of living is going up and it costs more to fill up your car or go to the supermarket and buy food, or rearrange your mortgage".

He went on: "Instead of the government helping people out in the Budget, they have hit them again with these big increases in alcohol, big increases in the purchase of many family cars and also big increases in taxes on business, which are hidden in the smallprint of the Budget".

Road pricing

Among measures he announced were rises in child benefit, more help for families using pre-paid electricity meters, increases in the winter fuel allowance, and a new "first year" extra tax of up to 950 for the most polluting cars.

The small steps forward that the chancellor took on green issues were absolutely overshadowed by the big step he took backwards
Caroline Lucas
Green Party

He also said there would be an extra 10% on plane duty in the second year of a new per-flight tax regime to replace Air Passenger Duty (APD) from November 2009.

Mr Darling announced that he would fund the development of technology for a national road-pricing scheme, introduce annual "carbon budgets" alongside the Budget from 2009, and review the government's target of reducing emissions by 60% by 2050, with a view to raising it to 80%.

And he announced plans to introduce a charge on plastic bags early next year, if supermarkets do not take "sufficient" steps to reduce their use.

Flight taxes

But he delayed a planned 2p a litre increase in fuel duty for six months, owing to soaring crude oil prices.

Green Party MEP Caroline Lucas, told the BBC: "The small steps forward that the chancellor took on green issues were absolutely overshadowed by the big step he took backwards.

"And that of course was basically giving the green light to the expansion of Heathrow and Stansted airports."

Greenpeace campaigner Anita Goldsmith agreed, saying increasing flight taxes was "hypocritical posturing" and Labour was "committed to more runways, more emissions and more climate change".

Friends of the Earth's Tony Bosworth said Mr Darling's "showroom tax" on the worst polluting cars was a "step in the right direction", but was not high enough to drive the "big changes in purchasing decisions" needed.

Binge drinking

In other announcements, alcohol tax will go up by 6% above inflation - and then by 2% above inflation for the next four years, potentially boosting Treasury coffers by 635m annually by 2010.

The first increases come into effect on Sunday - putting 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 will also go up by 11p.

Why am I, a low paid worker, worse off again?
Jay, Dumferline

The Liberal Democrats said Mr Darling had "over-egged" any good news, pointing out that winter fuel allowance rises were one-offs.

Their Treasury spokesman Vincent Cable, told the BBC a 30,000-a-year charge on "non-domiciled" foreign residents in Britain would not hit the richest hard enough:

"What we've advocated is that if people want to come here and work as expatriates or businessmen for a few years, of course they're very welcome and they should be given the 'non dom' status.

"But once they've been here seven years, once they've become part of British society, they should pay full British tax like the rest of us."

* Shadow chancellor George Osborne is on BBC One's Question Time at 2240 GMT on Thursday

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific