Follow the budget with the EADT
CHANCELLOR Alastair Darling will today deliver one of the most important budgets in years - and you can follow it all with the East Anglian Daily Times online.
THE Chancellor's Budget is being made against the worst economic crisis facing the UK since World War II. The morning started with the worst possible news for The Treasury - public borrowing is a record �90 billion and unemployment hit 2.1million, an increase of 177,000 a month.
Borrowing for the last financial year was �55.3 billion ahead of 2007/8 and smashed chancellor Alistair Darling's pre-Budget forecast of �78 billion.
The figure came as net borrowing for March hit �19.1 billion, the highest level for a single month since records began in 1993, the Office for National Statistics said.
This pushed the Government's current budget deficit to �52.3 billion, the largest since records began in 1946 and ten times more than the �5.3 billion in the previous year.
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In Prime Minister's Questions immediately before the Budget statement, Gordon Brown told the Commons the Government would do “everything we can” to help people who have lost their jobs return to work.
He was responding to Tory leader David Cameron who said the recession would be “the most deep and painful”' since the Second World War.
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The Speaker Michael Martin vacated the chair in favour of his principal deputy Sir Alan Haselhurst (Conservative, Saffron Walden) who, as chairman of ways and means, by tradition chairs the Budget statement.
Mr Darling said the Budget would provide help to get people back into work quickly and support businesses and homeowners facing problems. There will be measures to support investment in the growth and green industries of the future and the Government will work to rebuild Britain's financial services.
“Today's Budget will continue to help people through this global recession and prepare Britain for the opportunities of the future.”
Mr Darling said the impact was being felt in every continent, country and community.
“When the world economy was plunged into deep crisis in the 1930s, the response, both nationally and internationally, was too little and too late. This failure to act turned a serious downturn into a prolonged depression. We will not repeat those mistakes again.'
He said governments across the globe had taken "decisive action'.
“This action, taken promptly and decisively, gives us good grounds for confidence.”
- Mr Darling warned that output would shrink by 3.5% this year - more than doubling his previous forecast.
- He also predicted deepening deflation with the Retail Price Index falling to minus 3% by September, but he insisted that the economy would begin to pick up by the end of the year, with growth of 1.25% in 2010.
- Public borrowing will soar to a record �175 billion in the current year - or 12.4% of the UK's annual economic output.
- Including the �90 billion borrowing for 2008/09 unveiled today, total net borrowing is forecast to hit �696 billion by 2012/13, � almost �240 billion more than the Chancellor predicted in November's Pre-Budget Report.
- From January, everyone under 25 and out of work will receive a job or training.
- And he pledged to create 250,000 extra jobs and �260 million extra for skills and training. For the next two years, �250 million and then �450 million to maintain will provide 54,000 sixth form places, reducing the number of school leavers out of a job.
- The stamp duty holiday on homes up to �175,000 extended to end of year. M Darling will allow loss-making firms can reclaim tax on profits from past three years.
- A car industry scrappage scheme will be introduced of �2,000 for cars over 10-years-old from next month until to March 2010.
- From April 2011, the Chancellor will restrict pension tax relief for those with incomes over �150,000 so it is gradually tapered to the 20% rate. No income tax increase this year.
- However, the planned new top income tax rate of 45% on incomes above �150,000 will be increased to 50% and take effect from next April - a year earlier than planned - and just weeks before the likely date of the general elections.
- Personal allowances to be fully withdrawn for those with incomes over �100,000 from next April. Fuel duty will increase by 2p per litre in September and then by 1p a litre above indexation each April for the next four years.
- Alcohol duties will go up by 2% from midnight tonight.
- There will be an increase in tobacco duty of 2% from 6pm tonight. These measures will raise over �6 billion by 2012.
- The Chancellor says that capital investment will continue at historically high levels to 2012. After this, public sector net investment will be at 1.25% of GDP by 2013/14.
- An additional �1 billion has been pledged to help combat climate change by supporting low-carbon industries and green jobs
- Extra financial support of �500 million is intended to kick-start building on housing projects stalled because of the credit crunch, including �100 million for councils to build new energy-efficient housing.
- The Chancellor is bringing forward �50 million to speed up modernisation of armed forces housing. Businesses' main capital allowance rate doubled to 40%, giving enhanced tax relief to support investment of �50 billion this year.
- New �750 million Strategic Investment Fund to help emerging technologies and regionally important sectors in advanced businesses.
- The Chancellor claimed he was presenting the world's first ever carbon budget, committing Britain to cut carbon emissions by 34% by 2020.
- There'll be �435 million of extra support to deliver energy efficiency measures for homes, firms and public buildings and �525 million of new support over the next two years for offshore wind projects.
- Motorists face a fuel duty increase of 2p a litre in September and there will be further rises of 1p a litre for the next four Aprils.
- From April next year, the child element of child tax credit to increase by �20. Children with disabilities will receive an extra �100 a year in their child trustfFund, with an extra �200 each year for those with severe disabilities.
- Statutory redundancy pay goes up from �350 to �380 a week.
- The annual limit for tax-free ISAs increased to �10,200, of which �5,100 can be saved in cash. The new limit is introduced this year for over-50s, next year for others.
The Chancellor sat down at 1.21pm.