Chancellor Alistair Darling delivers election Budget

Wednesday 24th March 2010

Alistair Darling has delivered a highly political Budget in the House of Commons this afternoon, his third and last before the general election.

The chancellor announced a two-year stamp duty holiday for first-time buyers on house sales under £250,000, a move that would be funded by increasing duty of homes worth more than £1 million, up from four per cent to five per cent.

He also announced the inheritance tax threshold would be frozen for four years.

Mr Darling confirmed the widely publicised increase of duty on cider, up by ten per cent above inflation. There will also be a rise in tobacco duty by one per cent, with the planned 3p fuel duty rise to be phased in over the next ten months.

Mr Darling told MPs in Wednesday the budget deficit would come down from his original prediction from £178 billion to £163 billion.

Growth in Britain's economy was also maintained at 1.25 per cent for 2010, but was revised down to 3.25 per cent for next year.

The predicted deficit was also downgraded to £11 billion and £14 billion for 2010/2011. Mr Darling also said he predicted government borrowing to fall to four per cent of GDP by 2014/15.

Government savings of £20 billion were also announced, including the relocation of some 15,000 civil servants out of London. Each of the government departments are also expected to announce details of savings this afternoon.

There were a number of clear political moves in what could be Mr Darling's final Budget, including a new tax avoidance agreement signed with Belize – the country where Conservative donor Lord Ashcroft, who recently admitted he was a non-dom, has the majority of his business interests.

Also included in the measures announced was £100 million to pay for local road repairs, acknowledging the damaged caused by the severe winter and the fact councils are continuing to struggle to repair dilapidated roads, namely pot holes.

There was news that business rates had been cut, with a doubling of entrepreneurs' relief for Capital Gains Tax.

Mr Darling confirmed the recently announced taxes on banker's bonuses had raised £2 billion – much higher than the £500 million predicted by the government.

He also said he planned to make sure everyone in the UK has a bank account. The chancellor said moves would see one million currently without accounts being able to open one in the next five years.

Conservative leader David Cameron slammed the chancellor's announcements, accusing Labour of making "a complete mess of the economy".

He also claimed the government had stolen his party's policies on stamp duty and the cider tax to tackle binge drinking.

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