Alistair Darling unveils 'budget to secure ecocomic recovery'

CHANCELLOR Alistair Darling Budget today unveiled a Budget he said would secure economic recovery and tackle borrowing.

He claimed Labour had made the "right calls" in dealing with the worst recession for 60 years.

And, emphasising a key theme of the forthcoming General Election, he said: "At the heart of our decisions is a belief that Government should not stand aside, but instead help people and business achieve their ambitions."

He said borrowing was lower than forecast last year, adding: "The task now is to bring down borrowing in a way which does not damage the recovery or the front-line services on which people depend."

He announced a 2.5 billion one-off growth package.

And he revealed that the one-off 50 per cent tax on the "excessive bonuses" of bankers had already raised 2 billion, more than twice as much as forecast.

It was also stated that over the next year, RBS and Lloyds will provide a total of 94 billion of new business loans, nearly half to smaller firms.

Mr Darling revealed that more than 4 billion from next year's reserve will be allocated to fund operations in Afghanistan.

And he said the number of civil servants in London is to be reduced by one-third over the long term, with 15,000 posts relocated within the next five years.

Tobacco duty will increase from today by 1 per cent above inflation and then increase by 2 per cent in real terms each year until 2014.

Duty on beer, wine and spirits will increase as planned from midnight on Sunday. Alcohol duties will also increase by 2 per cent above inflation for two further years from 2013.

The planned increase in fuel duty and landfill tax will continue for one year from 2014. Duty on cider will increase by 10 per cent above inflation from midnight on Sunday.

Inheritance tax threshold will be frozen for a further four years to help pay for the cost of care for older people.

The Chancellor said that he was standing by his forecast that the economy would grow by 1 to 1.5 per cent this year although he slightly downgraded his prediction for next year to 3 to 3.5 per cent compared to the 3.5 per cent in the PBR.

He also gave a helping hand to first time buyers – but hit wealthier home hunters with a surprise tax hike.

In his last Budget before the General Election he announced that the threshold for stamp duty on house buying would double from 125,000 to 250,000 from midnight tonight.

But to cheers from Labour MPs he also announced that the move would be funded through an increase in stamp duty to 5 per cent for residential property over 1 million from April next year.

There was also limited good news for motorists already facing soaring fuel costs.

Mr Darling said he would stagger next month's scheduled 3p per litre increase in fuel duties – with the tax rising by a just a penny in April with another penny in October and the final instalment in January next year.