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Budget 2008

On 12 March, Alistair Darling stepped up to deliver his first Budget as Chancellor of the Exchequer, of which he labelled a ‘responsible Budget to restore and sustain stability’. What does it mean for us?

Our economy

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• The Chancellor believes the UK economy will continue to grow in 2008 and beyond, but with the global economy slowing, Mr Darling has revised his growth forecast for 2008 to between 1.75% - 2.25%, which is down from the 3% growth seen in 2007. In 2009 the economy is forecast to grow between 2.25% and 2.75% in 2009.
• Inflation is set to rise in the short term but will return to< target of 2% in 2009 and remain on target thereafter.
• Borrowing next year will rise to £43 billion, some 2.9% of national income. It will fall to 1.3% by 2012/13

• Pint of beer – up 4p
• Pint of cider – up 3p
• Bottle of wine – up 14p
• Bottle of spirits – up 55p
• Packet of cigarettes – up 11p
• 2p rise in petrol – postponed until October

• From April, key workers, such as teachers and nurses, will be able to borrow money from shared equity schemes.
• Stamp duty on shared ownership homes will not be required until people own 80% of their home.
• Long term fixed rate mortgages will be encouraged. The Chancellor believes they are a way to introduce stability, reduce risks for first time buyers and keep them on the property ladder.
• Sites for 70,000 more houses have been identified

• In a bid to encourage people to save, the Government will launch the "savings gateway" nationally with the first accounts available by 2010.
• Cash ISA limit confirmed as £3,600 a year from this April.

• Urgent action is needed. Target to reduce carbon emissions by 60% may be extended to 80% by 2050
• Environmentally unfriendly cars - £1,000 vehicle excise duty.
• Road tax should support lower emission cars. From 2009 there will be new bands for the most polluting cars. From 2010, lowest emission cars will pay no tax in first year.
• Carrier bag legislation pledged in 2009 if usage does not fall
• £26 million next year to help homes cut their carbon footprint and energy consumption.
• New non-domestic buildings zero carbon by 2019
• First carbon budget pledged alongside next year's Budget.

• £10 million over five years to improve science teaching. Outside contributions will bring this figure up to £30 million
• £60 million over three years to boost skills for those entering the labour market.

• More help for small businesses, with capital gains tax remaining at 10%
• Corporation tax will fall from 30% to 28% by April this year, with simpler taxes for small companies.
• £60 million more for Small Firms Loan Guarantee Scheme, which will be extended to all small companies
• New target of 30% of Government contracts for small firms
• £30,000 charge for non-doms confirmed from April, but no further change for this Parliament and the next.

• Budget 2008