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As expected

The Budget has the shape I expected… a downgrade of the near term, and a bounce back in the medium term. By 2012, the golden rule measure of borrowing actually looks better than it did back in October. I suspect that means it is a net tax raising budget, with the tax rises delayed.

We've already had one tax rise from 2010 - the return of a new fuel tax escalator, with the half pence per litre rise in tax each year, over inflation. The MPs barely seemed to notice it, but it is a tax rise that the next government will find itself dealing with.

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  • 1.
  • At 01:32 PM on 12 Mar 2008,
  • Andy Bugden wrote:

Why is it called a "golden rule". When required the former chancellor just moved the goal posts - shouldn't it be called the "quick-silver rule"?

  • 2.
  • At 01:44 PM on 12 Mar 2008,
  • Angus wrote:

With banks and fuel companies making profits of billions, can someone explain to the layman (me) why the cost of living is going up? Why aren't the conglomerates forced to pay their stockholders slightly less of a bonus, and trickle the savings down to the consumer? This is blatant thievery and nobody in power seems to care.

  • 3.
  • At 01:56 PM on 12 Mar 2008,
  • Neil Cherrill wrote:

Please explain to me how the Inflation rate is only 2.something % when fuel is up from 88p to 108p (22%) dairy products up by more than 10% Council tax by 12% to name just three double figure %age rises in the cost of living?

  • 4.
  • At 02:01 PM on 12 Mar 2008,
  • Anonymous wrote:

It's always the lower paid person who suffers the most with petrol costs rising. I have to drive to work unless I want to extend my day by 4 hours to wait for buses to the small village where I work. As people come to the firm from different directions car sharing is not possible. Giving up work is not an option but finances will now be tighter with higher fuel costs, I don't even drive a gas guzzler.
I wish those people who come up with these ideas, which is really only to benefit the government cam and lived in my world...!

  • 5.
  • At 02:01 PM on 12 Mar 2008,
  • Kev M wrote:

Quote: "There will be no return to the inflation rates of the early 1990s," Mr Darling said.

What a load of rubbish, REAL inflation is raging, this 2.2% rubbish that that the ONS cooks up is garbage.

  • 6.
  • At 02:13 PM on 12 Mar 2008,
  • Jenny wrote:

Hi, a little confused how this all will affect those of us living in Scotland, particlularly students?

  • 7.
  • At 02:15 PM on 12 Mar 2008,
  • Mike Scott wrote:

Overall inflation is lower than the increases in basic foodstuffs and energy because other things have risen less or fallen. Clothes and shoes are down by 5% and telephone costs are down by 3%, for example.

  • 8.
  • At 02:22 PM on 12 Mar 2008,
  • Tony Kimberley wrote:

It's as expected all right. I'm a law abiding, working, company car driving, One family car owner, with a mortgage and a large family, most over 16 (1 in Uni). One of the only ways I relax is a drink with some friends on a Thursday and Saturday nights.

My Council tax just went up 4%, Fuel bills 22%, Petrol 20p a liter, Food bills 10% for most essentials. What has he done for me and my current high tax levels? Increased them.

Frankly I'm fuming. When is it that they will learn that normal people like myself don't agree with being taxed out of existence so that China etc can carry on polluting the planet. Give us all a break, Car drivers, sensible drinkers and normal people!

I believe that the only way to combat alcohol abuse is to raise the age of consent to 21 and make it a huge fine for parents who let their underage children drink. CUT taxes for alcohol in pubs where both the ages and behaviour of people is controlled.

In relation to cars, make Trains and buses much cheaper and more reliable BEFORE you tax us off the roads.

Sensible solutions don't work for this government as they are only intent on increasing taxes to hide their own mismangement of the country.

  • 9.
  • At 02:28 PM on 12 Mar 2008,
  • john doherty wrote:

2. At 01:44 PM on 12 Mar 2008, Angus wrote:
With banks and fuel companies making profits of billions ......

Banks and Fuel Cos are Global and in many cases only a small percentage of their profits come from the UK, if profit continues to become a dirty word in the UK all you will see are global companies moving abroad. As for paying shareholders less this would be an option but, remember among the largest shareholders are many pension funds so if you cut dividends you will be taking money out of everybody’s pensions not just individual shareholders. I am all for shareholders taking the pain when a company goes bust, but to take that risk there has to be some reward.

  • 10.
  • At 02:35 PM on 12 Mar 2008,
  • Kev M wrote:

Mike Scott wrote:
Overall inflation is lower than the increases in basic foodstuffs and energy because other things have risen less or fallen. Clothes and shoes are down by 5% and telephone costs are down by 3%, for example.
=====

Most people only buy shoes/clothes/electrical goods every now and then (sometimes only once in years).

Petrol, gas, electricity, food, shelter, water are used and consumed EVERY day and hurt the prudent people!

Everyone should demand 10% pay rises to keep up with inflation!!

  • 11.
  • At 02:37 PM on 12 Mar 2008,
  • James wrote:

It's as expected all right. I'm a law abiding, working, company car driving, One family car owner, with a mortgage and a large family, most over 16 (1 in Uni). One of the only ways I relax is a drink with some friends on a Thursday and Saturday nights.

My Council tax just went up 4%, Fuel bills 22%, Petrol 20p a liter, Food bills 10% for most essentials. What has he done for me and my current high tax levels? Increased them.

Frankly I'm fuming. When is it that they will learn that normal people like myself don't agree with being taxed out of existence so that China etc can carry on polluting the planet. Give us all a break, Car drivers, sensible drinkers and normal people!

I believe that the only way to combat alcohol abuse is to raise the age of consent to 21 and make it a huge fine for parents who let their underage children drink. CUT taxes for alcohol in pubs where both the ages and behaviour of people is controlled.

In relation to cars, make Trains and buses much cheaper and more reliable BEFORE you tax us off the roads.

Sensible solutions don't work for this government as they are only intent on increasing taxes to hide their own mismangement of the country.

Sums up my thoughts

  • 12.
  • At 02:56 PM on 12 Mar 2008,
  • Charles wrote:

I was annoyed to read "but delayed for six months a 2p rise in fuel duty." on the BBC web site. The spin being that he has been so kind, considerate and thoughtful to us poor road users whereas in fact he has RAISED tax 2p a litre. How Labour are allowed to get away with such spin amazes me. FUEL DUTY RISES is what your less erudite or Labour leaning bretheren ought to have said.

I hope you find time to tell us if you think there will be a bounce back! It all looks very gloomy from here.

  • 13.
  • At 03:08 PM on 12 Mar 2008,
  • Mark wrote:

Does anybody know why Darling was announcing new biometric technology measures for Heathrow immigration? Is he getting Jacqui Smith's job next week? Or perhaps it will be taxed, imply you may not fly without an ID card and a DNA database record...

Someone should ask some serious questions about this curious announcement.

  • 14.
  • At 03:16 PM on 12 Mar 2008,
  • Stephen Brooks wrote:

--[I believe that the only way to combat alcohol abuse is to raise the age of consent to 21 and make it a huge fine for parents who let their underage children drink. CUT taxes for alcohol in pubs where both the ages and behaviour of people is controlled.]--

Why do we have to make young people the scapegoat for this, when it's only a minority of young people who are causing alcohol-related trouble, plus quite a few over-21s? Imposing further restrictions on youth will just alienate them further. Better policing, which actually punishes the people who behave anti-socially, would be more appropriate.

  • 15.
  • At 03:44 PM on 12 Mar 2008,
  • Matt wrote:

9. At 02:28 PM on 12 Mar 2008, john doherty wrote:

Banks and Fuel Cos are Global and in many cases only a small percentage of their profits come from the UK, if profit continues to become a dirty word in the UK all you will see are global companies moving abroad. As for paying shareholders less this would be an option but, remember among the largest shareholders are many pension funds so if you cut dividends you will be taking money out of everybody’s pensions not just individual shareholders. I am all for shareholders taking the pain when a company goes bust, but to take that risk there has to be some reward.

---------------------------------

The comment above about Global companies moving out of the UK if overtaxed i don't understand completely. It is the international energy companies raising our energy prices here whilst not in their own countries that is the problem. They can't move abroad. As for shareholders, companies should not be passing costs onto the consumer just to keep shareholders dividends high. It may affect pension funds return, but they should be no different to any other shareholder (ok you lose out if they are cut, but that is only fair - the fund should invest elsewhere).

I'm also annoyed that as far as energy bills go it is ok for the energy companies to rip us off if we can afford it. It shouldn't be just the poor that get a fair deal, but everyone.

As for the increase in tax on alcohol it won't address the problem. When will the government learn that putting the price up on this and petrol isn't going to curb the use of them. We are drinking more and using cars more now than we did 10 years ago and the prices are much higher now. I also agree with comments that we need alternatives - public transport. Hitting the law abiding population for the excesses of a few won't solve the problem.

This was Labour's 12th Budget and Darling's first - and although I believe it was probably their most difficult in light of the gloomy financial environment, I found it very cautious and unimpressive. This was Darling's chance to prove that he's a competent Chancellor - and that the economy is safe in his hands and can weather the storm. For me, the stark economic reality is that Mr Darling will borrow a staggering £140bn over the next four years!

The colossal sum is £20bn more than he forecast in his own pre-Budget report just five months ago and some £32bn more than Gordon Brown was predicting in his final Budget last spring. And he plans to really squeeze the consumer by slapping on a pint of beer, 3p on cider and 14p on a bottle of wine - and a thumping 55p on a bottle of Scotch, ending a 10-year freeze on spirit duties.... don't forget that these duty increases are 6% above inflation.

As the founder and MD of a small PR business, I welcome the Chancellor's plans to improve access to finance by expanding the small firms loan guarantee scheme, and help female entrepreneurs. But I'd like to see the fine detail on this.

I totally agree with the reponses from the Opposition: David Cameron said the Budget contained 'truly dreadful figures' and Clegg said Darling was the Prime Minister's 'creature' who had been left to clear up his economic 'mess'. .... How true!

  • 17.
  • At 05:29 PM on 12 Mar 2008,
  • john wrote:

Global energy and fuel companies may not be able to physically move location but they can change where they are incorporated, where they are listed and where they report their profits, also if we do not allow companies to make profits what incentive is there for them to invest in their business, sounds to me like what someone wants the energy firms to be nationalised.
As for pension funds moving their money elsewhere for returns , one of the main problems with pension fund deficits is that there are not enough assets currently that provide big enough returns to match their predicted future outgoings, the current low interest rate environment does not help, taking away or reducing the dividends from relatively safe banks and energy shares would force pension fund to make more “riskier” investments to provide the required returns, which in turn could mean that pension funds end up losing some of their capital and are unable to fulfil their obligations and what would we see then , a whole queue of people expecting the government to bail them out

  • 18.
  • At 07:02 PM on 12 Mar 2008,
  • Richard wrote:

How is inflation going to be kept at 2% when public spending is going to be 2.2% over the next few years?

  • 19.
  • At 12:09 AM on 13 Mar 2008,
  • T Cowling wrote:

I see that once again the lower paid are to suffer,
Anyone like myself with a wife and family and the only pleasure is a car will soon have to give that up,
this government is trying to send us back to the victorian times when we had the rich and poor, why cant they do something to help the people instead of just tax,tax,tax i am sure they sit in parliment trying to find new ways of sending this country down the tubes, its no wonder so many people are leaving.

  • 20.
  • At 09:56 AM on 13 Mar 2008,
  • Garth wrote:

I own a classic car - I drive it around to the various meet ups my club has and I tend to knock up around 1,500 miles a year. But it was built in 1974 and from 2009 I'll need to fork out £300 a year for my hobby (on top of the on going restoration). The petition to the government regarding classic car tax was revoked with them barking on about 'reducing carbon footprints' etc. What a load of tosh. The same car two years older than mine, produces the same amount of CO2 and is except of tax.

I understand the government didn't care much for MG cars but isn't it about time they bought the car tax system up to date for the 21st century - start taxing cars based on usage therefore encouraging people to use public transport where available and affordable? I'm not proposing installing blackboxes/telescreens in each car, but add a little more tax at the pump, and reducing the tax disc to a sensible rate.

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