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Darling targets first-time buyers Darling targets first-time buyers
(about 1 hour later)
Chancellor Alistair Darling has axed stamp duty on house sales under £250,000 for first-time buyers paid for by a rise in duty on homes over £1m. Chancellor Alistair Darling has axed stamp duty on homes under £250,000 for first-time buyers in a pre-election Budget which hit the better off.
In the final Budget before the election he also delayed fuel duty rises and put a 10% tax rise on cider and alcopops. Stamp duty will rise on £1m homes and anyone earning over £130,000 will see their tax bill rise in moves seen as aimed at cheering the Labour faithful.
He predicted the budget deficit would be £163bn rather than the £178bn forecast, but cut growth forecasts. Mr Darling said the budget deficit was now expected to be £167bn this year rather than the £178bn forecast.
The Conservatives said Labour had "made a complete mess of the economy and done nothing to clear it up". Bu the Conservatives said Labour had "made a complete mess of the economy".
Tory leader David Cameron accused Mr Darling of stealing Tory policies on stamp duty and an extra tax on strong cider.Tory leader David Cameron accused Mr Darling of stealing Tory policies on stamp duty and an extra tax on strong cider.
And taunting Gordon Brown he said: "The biggest risk to the recovery is five more years of this prime minister."And taunting Gordon Brown he said: "The biggest risk to the recovery is five more years of this prime minister."
Lib Dem leader Nick Clegg said both the chancellor and David Cameron were "in denial" about spending cuts.Lib Dem leader Nick Clegg said both the chancellor and David Cameron were "in denial" about spending cuts.
BUDGET 2010: AT-A-GLANCE Deficit not as big as predictedFirst time buyers stamp duty cutPlanned petrol duty rise staggeredForce state banks to lend moreCrackdown on tax evasionStrong cider and alcopop tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key pointsBUDGET 2010: AT-A-GLANCE Deficit not as big as predictedFirst time buyers stamp duty cutPlanned petrol duty rise staggeredForce state banks to lend moreCrackdown on tax evasionStrong cider and alcopop tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key points
"Neither has the courage to come up with the details of the cuts we will need in the years ahead to tackle Britain's deficit," he told MPs."Neither has the courage to come up with the details of the cuts we will need in the years ahead to tackle Britain's deficit," he told MPs.
In his Budget speech, Mr Darling confirmed the government would stick to a 2.2% real terms rise on spending this year but warned spending cuts after 2011 would be the "toughest for decades". Mr Darling unveiled a series of measures aimed at clawing back tax from high earners - likely to go down well with Labour MPs fighting an election next month.
He said he was freezing the inheritance tax threshold for another four years, in order to help pay for the costs of care for older people.
He also announced the end of some personal tax allowances on those earning more than £150,000 and a cut in tax relief on pensions for those with incomes above £130,000 a year.
He confirmed the government would stick to a 2.2% real terms rise on spending this year but warned spending cuts after 2011 would be the "toughest for decades".
'Toughest'
But to cut earlier, as the Conservatives were demanding, would be both wrong and "dangerous" and would risk derailing the recovery, he said.But to cut earlier, as the Conservatives were demanding, would be both wrong and "dangerous" and would risk derailing the recovery, he said.
He told MPs the stamp duty cut for first-time buyers would be funded through the introduction of a new higher stamp duty band of 5% on properties costing more than £1m from April next year. "The task now is to bring down borrowing in a way which does not damage the recovery or the frontline services on which people depend," he said.
He also announced that next month's increase in fuel duties will be staged. It will rise by 1p in April, followed by a further 1p rise in October and the remainder in January. "The challenge now is how we invest as a country to support the industries of the future and allow the talent of the British people to flourish."
Mr Darling provoked roars of approval from Labour MPs when he announced a crackdown on tax evasion through new agreements with the governments of Dominica, Grenada and Belize - home of Tory "non dom" donor Lord Ashcroft.
The stamp duty cut will cost the Treasury £230m in 2010-11 and £290m in 2011-12 to be funded by the introduction of a new higher stamp duty band of 5% on properties costing more than £1m from April next year.
But the most expensive measure in the Budget, according to BBC economics editor Stephanie Flanders, is the £550m plan to phase in next month's increase in fuel duties. It will rise by 1p in April, followed by a further 1p rise in October and the remainder in January.
COMPLETE BUDGET DOCUMENTS Budget 2010 - Securing the recovery [3.55MB] Hosted by Direct.gov.uk
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Duty on beer, wine and spirits will increase as planned from midnight on Sunday, including 10% on cider, with further increases to come on high strength cider. Alcohol duties will also increase by 2% above inflation for two further years from 2013.Duty on beer, wine and spirits will increase as planned from midnight on Sunday, including 10% on cider, with further increases to come on high strength cider. Alcohol duties will also increase by 2% above inflation for two further years from 2013.
Tobacco duty will increase from today by 1% above inflation and then increase by 2% in real terms each year until 2014.Tobacco duty will increase from today by 1% above inflation and then increase by 2% in real terms each year until 2014.
COMPLETE BUDGET DOCUMENTS class="" href="http://www.direct.gov.uk/fullbudgetreport2010">Budget 2010 - Securing the recovery [3.55MB] Most computers will open PDF documents automatically, but you may need Adobe Reader href="http://www.adobe.com/products/acrobat/readstep2.html">Download the reader here In a series of measures aimed at boosting business, Mr Darling said business rates will be cut for one year from October, meaning a tax reduction for over 500,000 firms in England.
He also provoked uproar in the Commons by announcing a crackdown on tax evasion through new agreements with the governments of Dominica, Grenada and Belize - home of Tory "non dom" donor Lord Ashcroft.
In a series of measures aimed at boosting business, Mr Darling announced help for advanced manufacturing and said business rates will be cut for one year from October, meaning a tax reduction for over 500,000 firms in England.
He extended a six month job or training guarantee for under 24-year-olds to March 2012, and announced a one-off £270m fund to create 20,000 extra university places.He extended a six month job or training guarantee for under 24-year-olds to March 2012, and announced a one-off £270m fund to create 20,000 extra university places.
Mr Darling said that stronger than expected tax receipts meant that government borrowing would be £167bn this year - £11bn down on the £178bn he predicted in the pre-Budget report in December.Mr Darling said that stronger than expected tax receipts meant that government borrowing would be £167bn this year - £11bn down on the £178bn he predicted in the pre-Budget report in December.
'Right calls''Right calls'
He said that the debt would continue to fall faster than previously forecast - dropping to £74bn in 2014-15, down £8bn on his earlier prediction.He said that the debt would continue to fall faster than previously forecast - dropping to £74bn in 2014-15, down £8bn on his earlier prediction.
The chancellor said he was standing by his forecast that the economy would grow by 1 to 1.5% this year although he slightly downgraded his prediction for next year to 3 to 3.5% compared to the 3.5% in the pre-Budget report. His forecast for the following years is unchanged.The chancellor said he was standing by his forecast that the economy would grow by 1 to 1.5% this year although he slightly downgraded his prediction for next year to 3 to 3.5% compared to the 3.5% in the pre-Budget report. His forecast for the following years is unchanged.
He also revealed that the £2bn proceeds of a bank bonus tax was more than three times what the Treasury forecast in his pre-Budget report.He also revealed that the £2bn proceeds of a bank bonus tax was more than three times what the Treasury forecast in his pre-Budget report.
EXPERTS' ANALYSIS Business editor Robert Peston Political editor Nick Robinson Economics editor Stephanie FlandersEXPERTS' ANALYSIS Business editor Robert Peston Political editor Nick Robinson Economics editor Stephanie Flanders
He also unveiled a guarantee to give everyone a basic bank account, giving up to a million more people access to bank accounts over the next five years. And he unveiled a guarantee to give everyone a basic bank account, giving up to a million more people access to bank accounts over the next five years.
Mr Darling said Labour had made the "right calls" during the financial crisis and would make the right choices to secure the recovery.
"The challenge now is to bring down borrowing in a way that does not damage the recovery or frontline services people rely on," he told MPs.
Some of the more controversial measures in the Budget may not make it into law before polling day, which could be just six weeks away.Some of the more controversial measures in the Budget may not make it into law before polling day, which could be just six weeks away.
But the planned cut in stamp duty would stay in place whoever wins the election, as it is similar to existing Tory policy.But the planned cut in stamp duty would stay in place whoever wins the election, as it is similar to existing Tory policy.
Mr Darling's announcement on duty on strong ciders and alcopops - another Conservative policy - came after ruling out a minimum price for alcohol.
'Out of steam''Out of steam'
If the Conservatives win the election they will produce an "emergency Budget" within 50 days of taking office which could reverse many of Mr Darling's other measures. He also outlined plans to boost future economic growth, with billions invested in digital jobs, broadband for all, high-speed rail and biotech industries, using money from existing budgets.
If the Conservatives win the election they will produce an "emergency Budget" within 50 days of taking office which could reverse many of Mr Darling's measures.
The chancellor did not unveil any new tax increases, with the new 50% top rate of income tax expected to come into force on 1 April.The chancellor did not unveil any new tax increases, with the new 50% top rate of income tax expected to come into force on 1 April.
The chancellor also outlined plans to boost future economic growth, with billions invested in digital jobs, broadband for all, high-speed rail and biotech industries, using money from existing budgets.
Labour and the Conservatives have clashed over when the government should start reducing spending to tackle the budget deficit, which is among the highest in Europe and is expected to hit about 12.6% of GDP this financial year - well above the EU target of 3%.Labour and the Conservatives have clashed over when the government should start reducing spending to tackle the budget deficit, which is among the highest in Europe and is expected to hit about 12.6% of GDP this financial year - well above the EU target of 3%.
Last week the European Commission criticised the government's plans to halve the deficit in four years, saying they were not ambitious enough.Last week the European Commission criticised the government's plans to halve the deficit in four years, saying they were not ambitious enough.
Conservative leader David Cameron has called on the government to scrap its plans to increase public spending this year and warned that without prompt action to tackle the deficit, Britain risks entering the "danger zone" of rising interest rates and falling confidence on the money markets.
He said: "The choice is between a government which has completely run out of steam, completely run out of ideas, is not being honest about the mess we're in and has got no plans to clear it up, and a Conservative Party that's got the energy, the dynamism, the leadership to get the economy moving again.
"That's what we need, is to get this economy growing, get things going again. And that's what our Budget will do straight after the election."
Meanwhile, the Public and Commercial Services union are staging their first Budget day strike with pickets at key Westminster locations in a row over redundancy pay.Meanwhile, the Public and Commercial Services union are staging their first Budget day strike with pickets at key Westminster locations in a row over redundancy pay.
Do you have a question on the budget you would like us to put to our expert? Send us your questions using the form below. You can also class="inlineText" href="http://www.bbc.co.uk/blogs/haveyoursay/2010/03/what_are_your_hopes_for_the_bu.html">go to our debate to tell us what you would like to see in the budget. It came as Mr Darling announced plans to speed up relocation of civil servants from London.
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