Budget 2010: Alistair Darling set for stamp duty move

Chancellor Alistair Darling is to announce stamp duty will be scrapped on house purchases up to £250,000 for first-time buyers.

He will also phase in planned fuel duty rises in his final Budget statement before Britain goes to the polls.Mr Darling is under pressure to cut Britain's record deficit and has ruled out a pre-election giveaway. The Tories said Labour had "run out of ideas". The Lib Dems urged more honesty on the scale of cuts needed.Some of the more controversial measures in the Budget may not make it into law before polling day, which could be just six weeks away. But a planned cut in stamp duty would stay in place whoever wins the election, as it is similar to existing Tory policy.

Sources have told the BBC that the Chancellor will significantly increase the duty on strong ciders and alcopops in order to tackle binge drinking by young people. Other alcohol duties are expected to rise too. Mr Darling is expected to describe his financial statement as "a Budget to secure the recovery and invest in our industrial future". New tax rises and spending cuts are unlikely to be outlined, ahead of the election. But Mr Darling might spell out more details of where the government expects to make £11bn of public sector efficiency savings by 2012/13.

Latest figures suggest that government borrowing for 2009-10 - which had been predicted to reach £178bn - might be nearer £170bn, largely due to lower-than-expected unemployment. BBC political editor Nick Robinson said Mr Darling would say he could invest now while staying on course to reduce the deficit, thanks to the unemployment figures, higher taxes on bankers' bonuses and some reprioritising of spending. The chancellor is expected to outline a plan for the future, with billions invested in digital jobs, broadband for all, high-speed rail and biotech industries.

'Growth package'

The BBC's chief economics correspondent Hugh Pym said the financial markets - which have to fund the government's borrowing - will not be impressed if Mr Darling does not reduce the deficit as much as he can. Mr Darling is expected to say: "This will be a budget to secure the recovery, tackle borrowing and invest in our industrial future.

"At its heart is a growth package to help small business, promote innovation, invest in national infrastructure and key skills. "This package will be partially paid for by switching spending from within existing allocations."

On Tuesday, City minster Lord Myners said there would be measures to force British banks to offer basic accounts to every UK adult, to address what the government describes as the "financial exclusion" of poor and disadvantaged Britons. He told the BBC it would be "a budget which will help the economy through the early stages of recovery. We cannot afford to run the risk that the Tories would offer of snuffing out this recovery".

Tax evasion

Other predictions for the Budget include moves to force state-owned banks to increase lending by more than £80bn, a crackdown on tax evasion by wealthy investors and a green investment fund to finance projects such as wind farms and renewable energy. There has also been speculation that Mr Darling might choose to provide extra help for young unemployed people. The chancellor told the BBC at the weekend there would be no "giveaways" and people wanted "a sensible, workmanlike Budget". He also said a rise in VAT was "not on the table". Labour and the Conservatives have clashed over when the government should start reducing spending to tackle the budget deficit, which is among the highest in Europe and is expected to hit about 12.6% of GDP this financial year - well above the EU target of 3%.

Last week the European Commission criticised the government's plans to halve the deficit in four years, saying they were not ambitious enough. On Wednesday, Conservative leader David Cameron said Labour had made a "complete mess of the economy and had no plans to clear it up".

"That will have to wait until the next government," he said.

If the Conservatives win the election they will produce an "emergency Budget" within 50 days of taking office which could reverse many of Mr Darling's policies. Lib Dem Treasury spokesman Jeremy Browne said the stamp duty move was politically driven.

"Every time Alistair Darling stands up and says he's giving a bit more to...whatever group it is he has identified in his focus groups and opinion polling might help swing some Labour marginal seats, just remember that it is all borrowed money that he is giving to those people," he said.

Meanwhile, the Public and Commercial Services union is staging its first Budget day strike, with members mounting picket lines outside the Treasury in a row over redundancy pay.

Further demonstrations are expected outside Downing Street and Parliament.

Source - BBC News

Posted Date: 24th Mar 2010