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Darling targets first-time buyers Darling targets first-time buyers
(10 minutes later)
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.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.
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.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.
Mr Darling said the budget deficit was now expected to be £167bn this year rather than the £178bn forecast.Mr Darling said the budget deficit was now expected to be £167bn this year rather than the £178bn forecast.
But the Conservatives said Labour had "made a complete mess of the economy".But 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 the scale of spending cuts needed and dismissed the budget as "a political dodge not an economic plan".Lib Dem leader Nick Clegg said both the chancellor and David Cameron were "in denial" about the scale of spending cuts needed and dismissed the budget as "a political dodge not an economic plan".
"This isn't the preface to a new Government but a footnote to 13 years of failure," he added. "This isn't the preface to a new government but a footnote to 13 years of failure," he added.
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 tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key points Cameron: Labour's messed it up BUDGET 2010: AT-A-GLANCE class="" href="/2/hi/business/8584978.stm">Deficit not as big as predicted class="" href="/2/hi/uk_news/politics/8585423.stm">First time buyers stamp duty cut class="" href="/2/hi/business/8585352.stm">Planned petrol duty rise staggered Force state banks to lend moreCrackdown on tax evasionStrong cider tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key points Cameron: Labour's messed it up
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.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 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 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".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''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.
David Cameron: "The only new ideas in British politics are coming from this side of the House."David Cameron: "The only new ideas in British politics are coming from this side of the House."
"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."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.
"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.""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.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 Treasury is insisting all of the new spending measures are fully funded from existing budgets and not paid for by the £11bn less than expected borrowing.The Treasury is insisting all of the new spending measures are fully funded from existing budgets and not paid for by the £11bn less than expected borrowing.
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.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.
Mr Darling said he would stagger next month's scheduled increase in fuel duties - with the tax rising by a just a penny in April with another penny in October and the final instalment of 0.76p in January next year.Mr Darling said he would stagger next month's scheduled increase in fuel duties - with the tax rising by a just a penny in April with another penny in October and the final instalment of 0.76p in January next year.
But the most expensive measure in the Budget is a £600m pledge to increase the winter fuel allowance for pensioners for another year.But the most expensive measure in the Budget is a £600m pledge to increase the winter fuel allowance for pensioners for another year.
COMPLETE BUDGET DOCUMENTS Budget 2010 - Securing the recovery [3.55MB] Hosted by Direct.gov.ukCOMPLETE 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.
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.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 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
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.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.
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.
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.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.
Civil servant strikeCivil servant strike
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.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.
Giving its reaction to the Budget, the SNP said Mr Darling should have scrapped the fuel duty increase altogether, adding: "The Labour government have shown they would rather save face with the City than support Scotland's communities."Giving its reaction to the Budget, the SNP said Mr Darling should have scrapped the fuel duty increase altogether, adding: "The Labour government have shown they would rather save face with the City than support Scotland's communities."
Plaid Cymru's leader at Westminster, Elfyn Clwyd, said: "This unfair fuel tax is another example of an uncaring, out of touch government."Plaid Cymru's leader at Westminster, Elfyn Clwyd, said: "This unfair fuel tax is another example of an uncaring, out of touch government."
Business groups broadly welcomed the measures aimed at boosting enterprise.Business groups broadly welcomed the measures aimed at boosting enterprise.
CBI director general Richard Lambert said: "This was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side."CBI director general Richard Lambert said: "This was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side."
Derek Simpson, joint leader of the Unite trade union, said: "The last Budget before the election shows leadership and responsibility during difficult times."Derek Simpson, joint leader of the Unite trade union, said: "The last Budget before the election shows leadership and responsibility during difficult times."
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.
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.
It came as Mr Darling announced plans to speed up relocation of civil servants from London.It came as Mr Darling announced plans to speed up relocation of civil servants from London.