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Thanks for nothing, Darling
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| BIG DAY: Chancellor Alistair Darling leaves 11 Downing Street, London, with his red Budget box prior to delivering his Budget speech from the despatch box in the House of Commons |
CHANCELLOR Alistair Darling called this year's Budget "a responsible Budget to secure Britain's stability".
But the Chancellor's words got a lukewarm reception from Dorset leaders.
It was never going to deliver any surprises but there were glimmers of hope.
From April there will be a 2p cut in the basic rate of income tax and the 2p fuel duty rise has been postponed for six months with an extra 0.5p rise from 2010.
We all expected tobacco and alcohol prices to rise and they did.
In his first Budget Darling was forced to concede that the UK economy was not going to grow as much as predicted. He wound his prediction down to between 1.75 per cent and 2.25 per cent for 2008.
He said that inflation would rise before returning to its 2 per cent target in 2009 but would remain on target thereafter.
The chancellor gloomily predicted that borrowing next year would rise to £43bn - £7bn more than forecast last year. Any borrowing will be invested.
Businesses saw Mr Darling reduce corporation tax to 28 per cent and the small businesses loan guarantee scheme would be increased by £60m.
Tax relief under the Enterprise Investment Scheme (EIS) has risen from £400,000 to £500,000 to stimulate investment.
He announced a £42.5m fund for women entrepreneurs and said that he wanted small firms to win 30 per cent of public sector business and non-domiciled workers who have lived in the UK for seven years will pay tax but not on offshore income.
Key workers will find it easier to get shared equity mortgages, needing only half of the asking price rather than three-quarters. From yesterday, stamp duty on shared-ownership homes will not be required until buyers own 80 per cent of the equity in their home.
From 2009 there will be a charge for plastic carrier bags.
The Climate Change Committee is advising the government on whether to establish a new target of reducing carbon emissions by 80 per cent by 2050.
Child Benefit will rise from April 2009 to £20 a week. 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.
He also ordered energy companies to increase the help they give to people using pre-paid meters from £50m to £150m a year.
Senior tax manager with the Poole office of international accountancy and business advisory firm Mazars LLP Richard Meller said: "As expected, it was essentially a dull budget with no big hook or great finale. The delay on the 2p increase on fuel tax until October is at least some good news for Dorset-based haulage and distribution businesses. Research and scientific companies in the area could also enjoy a boost with the money promised for scientific innovation."
Darling is also encouraging 25 year fixed mortgages. Principal of Debbie J Boyes. Independent Mortgage Advisers Debbie Boyes said: "The government has tried on previous occasions to encourage lenders to provide extremely long term mortgages, but these have had little success. We are totally against clients tying themselves into mortgages for 25 years, and I would caution homeowners against them. How many people can know exactly what their circumstances and requirements are likely to be over the next five years, let alone 25 years?
"This type of potential legislation shows a complete lack of understanding of the mortgage market."
Immediate past president of Dorset Business and vice chairman of the south west chambers of commerce Chris Slocock said: "Alistair Darlings' first budget acknowledges a downturn but blames everyone else. He did not admit to the R' word. Make no mistake though this government is in financial trouble and has no reserves for hard times.
"This budget was about finding ways to increase tax and achieved this by about £2 billion."
The Federation of Small Businesses (FSB), welcomed the Budget speech.
FSB regional chairman Ken Moon said: "The Treasury's dithering since the Pre-Budget report and a series of damaging tax rises in the last year have totally undermined the government's position with small businesses. We welcome the freeze on fuel duty until October. The cost of fuel is damaging small businesses and their customers in every industry and every area of the country.
"Small businesses are totally opposed to road pricing that does not discriminate between essential business use of the roads and non-essential use. We're worried that the Chancellor appears to be pushing ahead despite massive opposition."
Partner at Princecroft Willis LLP Julian Smith said: "Alistair Darling targeted child poverty, parents, the elderly and charities. Given his potential audience, the Budget has received a muted response.
"The virtual abolition of the 10 per cent income tax rate (announced last year) will affect, particularly, part-time workers and the lower paid. There was some good news for charities who can continue claim income tax at 22 per cent until 2011. The new capital gains tax regime was confirmed with the refinement of Entrepreneurs' Relief and some further softening of the proposals. Otherwise, the new 18 per cent capital gains tax regime appears to be untouched. The inheritance tax threshold was not increased beyond last year's announcement and this will be a huge disappointment to homeowners particularly in the south. In general this was a neutral Budget with the chancellor having very little room to manoeuvre."
The Budget at a glance
Beer up by 4p a pint
Wine up 14p a bottle
Cider up 3p a litre
Packet of cigarettes up by 11p
Public sector borrowing will increase to £43bn
Increased budget of £2bn for defence services supporting the troops in the frontline, £900m on military equipment
ISA limits to increase to £7,200 (£3,600 in cash)
Income shifting legislation proposed to counter husband, wives and others sharing income to minimise tax liabilities deferred to April 2009
New non-domestic buildings to become zero-carbon from 2019
Major revision of the vehicle excise duty, from 2009
From 2010 the duty on new cars will be increased for highly polluting cars
4:41pm Wednesday 12th March 2008
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CommentPosted by: omegaman, Bournemouth on 8:38am Fri 14 Mar 08
In the present cicumstances a good and cautious budget.As he said we are well placed to ride the storm. If Northern Rock had been allowed to under then all our savings would have been under threat at every bank and then what would have been the reaction. We do need to drink and drive less no matter what some think. No complaints from the majority although no great applause either.
In the present cicumstances a good and cautious budget.As he said we are well placed to ride the storm. If Northern Rock had been allowed to under then all our savings would have been under threat at every bank and then what would have been the reaction. We do need to drink and drive less no matter what some think. No complaints from the majority although no great applause either.
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