Budget 2008
Darling in the hot seat
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| Chancellor Alistair Darling |
MEASURES to tackle Britain's booze culture and help the millions struggling to pay their fuel bills will form the centrepiece of Alistair Darling's first - and possibly last - Budget speech tomorrow.
The Chancellor is expected to announce above-inflation duty increases on beers, wines and spirits, which he says will discourage the binge-drinking plaguing towns and cities.
Mr Darling is also tipped to order energy firms to stop penalising low-income households and pensioners with pre-paid meters, who typically pay an extra £140 a year for gas and electricity.
The move is designed to help the Government meet its pledge to end so-called fuel poverty, which leaves households paying more than ten per cent of disposable income on heat and light.
However, the crackdown will fall far short of the threatened windfall tax on the energy firms' huge profits and is likely to be criticised as too little, too late.
This week, Age Concern said the number of pensioners struggling to stay warm had risen to 2.25 million from 1.1 million in 2004, because of spiralling energy bills.
Similarly, Mr Darling is under pressure to target the cheap alcopops popular with young problem drinkers, rather than punish all drinkers with higher alcohol duty across the board.
It was unclear today whether the Chancellor would bow to pleas from motoring groups to scrap a planned 2p rise in petrol duty from next month, because of rising fuel prices.
That would cost the Treasury badly needed revenue, as Mr Darling copes with the most perilous public finances since Labour came to power and the impact of the global credit crunch.
It is likely that the economic woes - the Chancellor is facing a Budget deficit of £38bn - will force him to delay a £2,000 "showroom tax" on gas-guzzling cars for 12 months.
It has been a torrid nine months for Mr Darling, who was quickly engulfed by the Northern Rock crisis and the loss of child benefit computer discs.
Worse, the Chancellor is judged by many to have lost the confidence of the business community, after U-turns on taxing foreign businesspeople registered abroad, and a planned rise in Capital Gains Tax.
There has been speculation that Gordon Brown will sacrifice his Chancellor in a summer reshuffle unless he can quickly rebuild his reputation.
Mr Darling will press ahead with a £30,000 levy on foreigners registered abroad for tax purposes, but with further concessions.
Other Budget measures will include extra money to help failing inner-city schools, combined with moves to parachute in the most skilled headteachers.
There will be a big rise in tax credits for low-earners, even though the goal of halving child poverty by 2010 is almost certain to be missed.
And plans will be announced to force supermarkets to charge for throwaway plastic bags if they do not drastically reduce the number handed out.
Mr Darling is likely to forecast lower than expected growth of 1.75 per cent this year, but will argue that Britain is well-placed to emerge from the global economic downturn in better shape than most competitor economies.
9:54am Wednesday 12th March 2008
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