MOTORISTS did not get the news they were after in the Budget today when the Chancellor ignored a lobby for a cut in fuel duty, writes Graham Walker.
Tobacco products are rising 5 per cent above inflation.
Regarding alcohol, Chancellor George Osborne said he had no plans to change the existing proposals in place to increase alcohol duty, which is set at 2 per cent above inflation annually until 2014/15
And millions of workers may have to work longer before they can retire, Mr Osborne also signalled in his Budget.
The Chancellor had been besieged with calls from the motoring lobby for a cut in fuel duty as forecourt prices have soared to record highs.
But Mr Osborne ignored them, declaring: “I do not propose to make any further changes to the fuel duty plans already set out.”
With regard to pensions he told MPs: “I can confirm today that there will be an automatic review of the state pension age to ensure it keeps pace with increases in longevity.”
That raised the prospect of longer working lives. Mr Osborne also set a target for savings in the welfare budget of £10 billion by 2016.
But he dealt a blow to smokers saying that duty on all tobacco products would rise by 5 per cent above inflation - slapping 37p on a packet of cigarettes from 6pm.
There was good news in the Budget for business as the Chancellor announced another 1 per cent cut in the rate of corporation tax from next month to 24 per cent. He said that by 2014, the rate would be 22 per cent which is “dramatically lower” than competitors.
Mr Osborne also revealed that the withdrawal of British troops from Afghanistan by the end of 2014 meant military operations there would £2.4 billion lower than expected.
The Chancellor predicted slightly better than expected economic growth as he unveiled a Budget which he said “rewards working families and helps those looking for work”.
Mr Osborne said the Office for Budget Responsibility expects UK plc “to avoid a technical recession with positive growth in the first quarter” of this year. He said the OBR had reported that the economy has “carried a little more momentum into the new year than previously anticipated”.
He added: “Indeed, the Office for Budget Responsibility is slightly revising up in their growth forecast for the UK this year to 0.8%.” This is up from 0.7% last autumn. The OBR is also predicting growth of 2 per cent next year, 2.7 per cent in 2014 and 3 per cent in both 2015 and 2016. Mr Osborne also gave an upbeat assessment of attempts to beat down the UK’s debt mountain.”
Our Star business experts, led by Bob Rae and David Walsh, plus our news team are compiling reaction and reports for a special round-up in The Star tomorrow.
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Here are the Budget’s major points at a glance :
TRANSPORT: Fair fuel stabiliser means above-inflation rises in fuel duty will return only if price of oil falls below £45 a barrel; Vehicle excise duty to rise by rate of inflation. Duty frozen for road hauliers.
DUTY: No change to existing alcohol duty plans; Duty on all tobacco products to rise by 5 per cent above inflation from 6pm tonight - 37p on a packet of cigarettes; New duty on gaming machines; Changes to taxation on gambling firms, imposing tax at the place of consumption to discourage online gambling moving offshore; Stamp duty charge on properties above £2 million through a company to rise immediately to 15 per cent; Stamp duty rate of 7 per cent on properties worth more than £2 million.
PENSIONS: State pension age to be automatically reviewed to ensure it keeps up with growing longevity; Simplification of tax system for pensioners; Single-tier state pension to be introduced - estimated to be £140.
BENEFITS: Child benefit to be reduced incrementally when one member of household earns more than £50,000. Child benefit will be removed completely at £60,000.
TAX: Government to consult on anti-tax evasion rules; 50p tax rate raised £1 billion - a third of the amount forecast; Top rate to be reduced from 50p to 45p from April 2013; Changes to taxation mean the Treasury will receive “five times more money each and every year from the wealthiest in our society”; Personal tax allowances to rise by £1,100 from next April. Tax-free allowance to rise to £9,205, making 24 million people £220 a year better off; Personal tax statement will explain how taxation is spent; Reform of tax system for small firms and review of VAT.
ECONOMY: The Office of Budget Responsibility expects UK to avoid recession and is revising growth forecast for this year up to 0.8 per cent; Inflation forecast to fall from 2.8 per cent this year to 1.9 per cent next year; Unemployment expected to peak at 8.7 per cent this year; Borrowing forecast to fall from £126 billion this year - £11 billion less than forecast in Autumn Statement - to £21 billion by 2016/17; Cost of operations in Afghanistan to be £2.4 billion less than expected. Extra £100 million to be spent on armed forces accommodation; Consultation to be held on offering gilts - Government bonds - with maturity terms of more than 50 years.
BUSINESS: “Major package of tax changes” to boost oil and gas extraction in North Sea, and £3 billion new field allowance west of Shetland; Tax credits for video games, animation and TV production in the UK; Funding for faster broadband in UK’s 10 largest cities; Headline rate of corporation tax to be cut further from next month by one percentage point - to 24 per cent. Future cuts to go ahead as planned; Bank levy to be increased to 0.105 per cent from next January, raising £2.5 billion a year; Legislation for relaxed Sunday trading laws on eight Sundays during Olympics and Paralympics, starting July 22.