Darling under debut Budget pressure - News in brief - Evening Standard
       

Darling under debut Budget pressure

A dark cloud of economic gloom is hanging over Alistair Darling as he puts the final touches to his debut Budget.

Cabinet colleagues and backbenchers are clamouring for the Chancellor to find billions of pounds extra to help meet key pledges on child poverty.

Meanwhile, the Tories are urging cuts in levies on business and insisting that expected tax increases on strong alcohol and gas-guzzling cars should be handed straight back to consumers.

But Mr Darling's already-limited room for manoeuvre appeared to be shrinking even further amid claims he will be forced to lower growth forecasts.

Despite having downgraded his GDP predictions for this year to 2%-2.5% in October, economists believe he must now reduce them to 1.75%-2.25% on Wednesday.

Such a slowdown, sparked by flagging consumer spending and continuing fallout from the credit crunch, would place further strain on the public finances and necessitate some £6bn extra borrowing - equivalent to around £240 for every household.

The worse-than-anticipated performance will make it even more difficult for Mr Darling to forgo a 2% rise in fuel duty due to take effect next month.

Motorists have been clamouring for the hike to be abandoned amid soaring international oil prices which have been inflicting pain at the pumps.

But Mr Darling is widely expected to hit some drivers even harder by introducing an environmentally-friendly "showroom tax" which could put an extra £2,000 on the most expensive 4x4s and cars. Tax discs could also be colour coded to reflect carbon emissions, opening the door to more congestion charging around the country.

Big duty rises are almost certain for strong beers, wines and spirits when the financial package is unveiled, after the parties engaged in a "bidding war" over tackling binge-drinking.

News in brief in Pictures

Don't Miss
The Glamour Awards - stars turn on the style

Glamour Awards

Stars turn on the style
Duchess of Cambridge is pretty in pink at her first Buckingham Palace garden party

Garden party

Duchess of Cambridge is pretty in pink
FIRST review of Ridley Scott's latest sci-fi blockbuster Prometheus

First review

Is Ridley Scott's Prometheus any good?
Fair-weather goths

Fair-weather goths

The sultry shades of summer darks are coming out of the shadows
London gets ready for the Diamond Jubilee - in pictures

Diamond Jubilee

London gets ready - in pictures
Dog save the Queen: Corgis surge in popularity

Dog save the Queen

Corgis surge in popularity
'He’s a better ex than he was a husband', says Boris Johnson's ex wife

A better ex than husband

We talk to Boris Johnson's ex wife
TV Baftas - in pictures

Best of the Baftas

Stars on the red, white and blue carpet
You big softie: Has Giles Coren put down his poison pen?

You big softie

Has Giles Coren put down his poison pen?
Pop star Paloma Faith, former Labour minister and Tory blogger back gay marriage video

Gay marriage

Pop star, former Labour minister and Tory blogger back gay marriage video