Budget - Labour hits the well-off
Chancellor Alistair Darling today announced a "soak the rich" Budget by forcing the wealthy to help Britain escape the worst economic depression since the Second World War.
He also hit drinkers, smokers and motorists with increased duties on alcohol, cigarettes, petrol and diesel in a bid to boost Treasury coffers.
But there also good news for motorists when the Chancellor finally succumbed to pressure from the motor industry for a car scrapping scheme, which will offer a discount of £2,000 on new cars until March 2010 provided the vehicles jettisoned is at least 10 years old.
The Chancellor revealed shocking figures for the amount the country will have to borrow to stay afloat over the next two years. He predicted borrowing levels in total for the next two years of £348 billion. It means Britain's total net debt has now risen to around three quarters of a trillion pounds, the equivalent of more than half of what the UK produces in total in a year.
Mr Darling's tax bombshell was specifically targeted at high earners. He proposed raising income tax for anyone earning more than £150,000 a year to 50p in the pound from next April – a year earlier than the 45 per cent new rate he announced last December. Pension tax relief will also be restricted for those earning £150,000 and people earning more than £100,000 with also lose their personal tax allowance.
Alcohol duty will rise by two per cent from midnight and taxes on cigarettes and other tobacco products will go up by the same amount from 6pm.
The Chancellor revealed a 2p increase in fuel duty in the autumn, followed by 1p plus inflation from next April for the next four years.
State pensions will rise by at least 2.5 per cent this year and the winter fuel allowance will remain at £250 this year.
The child element of the child tax credit will go up by £20 from next April, and statutory redundancy pay will rise by £30 to £380 a week.
