Darling Releases First Budget
Written by admin on March 13th, 2008 in UK economy.
Today Chancellor of the Exchequer Alistair Darling signalled that Britain’s economic outlook relies on events in the financial markets as he unveiled a modest first Budget, which shored up borrowing and involved raising taxes on drinkers, motorists and business in order to help fill a hole in public spending.
Even with reduced growth forecasts, Darling left an air of optimism on the lasting effects of the credit crunch. The treasury did however stress that predicted growth could be effected if the crunch was to deepen further.
With the intention of not taking money out of the economy Darling focused on taxation to raise funds needed to pass government targets on public debt and make progress towards its goals on reducing child poverty.
He did however raise government borrowing forecast over the next four year by £20 billion which would put public sector debt at 39.8% of GDP in 2010. The treasury’s ceiling is 40%.
Without the proposed £2 billion tax increase Darling would have hit his debt limit.
Among the increases in tax in this budget, alcohol saw a 9% increase adding 4p to a pint of beer, 14p to a bottle of wine and 55p to a bottle of spirits.
Vehicle tax duty also saw a hefty shake up with the most polluting car due to pay £950 in 2010, whilst the most eco friendly cars would be free of any taxation. Bio fuels will also loose its 20p a litre subsidy.
