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Drinkers hammered: beer up 4p, wine up 14p
Joe Murphy, Evening Standard13.03.08
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- Non-doms must pay £30,000 to stay here
- Darling's in a hole but Brown is to blame, says Cameron
- What the Budget means for us
A massive tax sting on drinkers was ordered this afternoon to help stave off recession.
Alistair Darling slapped 4p on a pint of beer, 3p on cider and 14p on a bottle of wine - and 55p on a bottle of Scotch, ending a 10-year freeze on spirit duties.
The rises, six per cent above inflation, were a blow for consumers in a Budget that also contained a shock for the City. Mr Darling embarked on a huge borrowing spree to balance his books in the face of economic trouble in his first Budget.
The Chancellor will borrow an eyewatering £140 billion over the next four years - £20 billion more than he forecast in his pre-Budget report five months ago and £32 billion more than Gordon Brown was predicting in his final Budget last spring.
It was forced by a slowdown in growth that sent the Treasury's plans into meltdown. Growth forecasts for this year and next were downgraded by a quarter point, wiping billions from planned tax revenues.
Smokers were also hit, by 11p on a packet of 20 cigarettes and 4p on cigars.
PODCAST: Mickey Clark on the Budget - listen here
There were only dutiful cheers for the Chancellor from Labour MPs when he sat down. His copy of his 52-minute speech was covered in scrawled amendments, which hinted at frantic re-calculations to make the sums add up.
David Cameron said the Budget contained "truly dreadful figures". He said Labour was reaping a harvest for overspending in the past. "In the years of plenty they put nothing aside," he claimed.
Liberal Democrat leader Nick Clegg accused Gordon Brown of an "act of political ventriloquism". He said Mr Darling was the Prime Minister's " creature" who had been left to clear up his economic "mess".
Overall the Budget will mean £2.5 billion extra being taken from taxpayers over the next three years.
Other victims of the Chancellor included the drivers of gas-guzzling cars, who will be hit by £950 vehicle excise duty in the first year when they buy a brand new car. Those buying the greenest cars will pay no duty for a year.
As expected, a 2p rise in petrol duty was postponed until October, to avoid it driving prices over the £5 a gallon mark.
Company car drivers are also in the line of fire. The fine print of the Budget showed that the Treasury expects to claw £80 million from them. It also contained a clear pledge to develop "pay as you drive" road pricing schemes.
The Tories claimed that drivers of ordinary family cars will also be clobbered - for example, the road tax on a Ford Mondeo two-litre diesel estate could double to £425 in the first year.
The fine detail of the Budget showed that the drinks taxes are set to bring in £1.5 billion over the next three years.
Beer drinkers were warned that a pint will cost £6.50 in central London by 2012 as a result of the Chancellor's increase in tax. Rob Hayward of the British Beer & Pub Association said: "Treasury revenues will fall, pubs will continue to close and beer sales will sink."
He added: "Above inf lation tax increases will open the floodgates to booze cruises and bootleggers."
Don Shenker, of Alcohol Concern, welcomed the increase in prices.
Mr Darling, whose 85-year-old mother Anna was in the gallery to watch him, tried to raise morale among Labour MPs by unveiling a one-off £50 rise in the winter fuel allowance for the oversixties to £250. Over-eighties will get a £100 rise, to £400.
He also spent £1billion in total on measures to help alleviate child poverty. Child benefit goes up to £20 and child tax credit is raised for the low paid.
But many of his backbenchers looked stunned to see the economy, which had fuelled vote-winning spending sprees in the past, shuddering to a crawl. Mr Darling slashed growth forecasts to between 1.75 per cent and 2.25 per cent for 2008, a quarter point less than his forecast of October.
Mr Darling's hope is that the City will see his measures as a reassuring sign the Government was prepared to take tough decisions to protect the long-term stability of the economy. He will also hope that voters will agree that overseas turmoil is to blame.
The economic shockwaves overshadowed a package that tried to make the most of limited means. Mr Darling promised to impose charges on the use of plastic carrier bags unless supermarkets make "sufficient" progress on a voluntary basis. Legislation would come into force in 2009 to reduce the number of plastic bags by 12 billion.
He pledged more generous tax relief on charitable donations under the Gift Aid scheme and launched a £12.5m fund to encourage women entrepreneurs. People on low incomes will get cash incentives from the Government to encourage them to save £25 a month. A move to help key workers buy homes will see those in shared equity schemes pay no stamp duty until they own 80 per cent of their home. There were no changes to income tax. Changes announced a year ago, including 2p off the basic rate and the abolition of the cheap 10p rate, come into effect next month. Mr Darling insisted he was meeting his fiscal rules, for stable debt and borrowing only to invest. And he boasted that despite the troubles, unemployment and inflation were the lowest for a generation.
Shadow chancellor George Osborne tonight accused him of "kicking" families with tax increases which added up to an average £110 hit after three years.
PODCAST: Mickey Clark on the Budget - listen here
Reader views (4)
4p on beer and 3p on ciders against 14p for wine and 55p on scotch? Do this people really think binge drinkers get hammered on wine at an average price of £4 and spirits at £9+?
- Bruno, London, UK
A £5 Billion hole in public finances...
Nice of Alistair and his boss Gordon to recently give away another £7 Billion of our money to the EU to subsidise our competitors.
Do these joke politicians really think that we're as stoo-pid as them?
- Battered Taxpayer, London
What's this £200 winter fuel allowance being raised to £250? We only get £100 each. Are we being short changed?
- Jeannie, Devon, England
What happened to a tax on rip-off energy companies? The public is paying far too much for gas and electricity yet Alistair Darling just ignores the difficulties of ordinary people. A very disappointing performance.
- Toby, Beckenham
