Wednesday, March 12, 2008

The UK Chancellor of the Exchequer, Alistair Darling, has revealed the 2008 budget, which he describes as a “responsible Budget to secure Britain’s stability in the face of global uncertainty.”

The budget report showed that the government expenditure for 2008 was higher than the total government funds, meaning that the governments debt has increased over this financial year.

The budget report mentioned a increase in fuel duty. The budget report said that “the planned fuel duty increase of 2 pence per litre in April 2008 will now be postponed until October 1, 2008. Main road fuel duty rates will rise by 1.84 pence per litre on 1 April 2009, and will increase by 0.5 pence per litre above inflation on 1 April 2010”.

Traditional “sin taxes” – duty on alcohol and tobacco – formed a headline-grabbing part of the announcement: the alcohol tax is to increase by 6% more than inflation, with an inflation+2% increase in each of the next four years. This will result in a near-immediate increase of 4p per pint of beer, 3p on cider, 14p on wine, and 55p on a bottle of spirits. A packet of 20 cigarettes will cost 11p more. An additional £950 duty will be charged on the most polluting new cars when they are first bought.

The winter fuel allowance paid to over-60 year olds, is increased by £50 to £250, while over 80s will receive an extra £100, to £400.

In the budget speech Darling described the financial forecasts. He said that his “forecast shows the UK economy will continue to grow throughout this period of global uncertainty – a view supported by the Bank of England, the International Monetary Fund and the Organisation for Economic Co-operation and Development.”