Darling's Budget focuses on stability

Alistair Darling has made economic stability the priority of his first Budget as world markets grapple with the global credit crunch.Mr Darling rose to deliver his statement to the House of Commons at 12.31pm, saying: "Every Government has one aim - to maintain stability through the world economic slowdown."He added that Britain is better placed than other economies to withstand the global economic slowdown which "poses a major risk to the world economy".Mr Darling slashed his growth forecast, saying: "This year, growth in the British economy will be between 1.75 per cent and 2.25 per cent, and growth will rise to 2.25 per cent-2.75 per cent in 2009 and 2.5 per cent-3 per cent by 2010."The UK can be confident about the inflation outlook. The inflation target for the Bank of England's Monetary Policy Committee remains 2 per cent." He added that debt has fallen to 36.6 per cent of GDP.However, Mr Darling said borrowing in 2009 will rise to £43 billion - 2.9 per cent of national income - falling to 2.5 per cent, 2 per cent, 1.6 per cent and 1.3 per cent by 2012/13.In the job since last June, Mr Darling, 54, has been embroiled in a series of crises since taking over from Gordon Brown, including his handling of the Northern Rock fiasco, attempts to tax "non dom" foreigners living in the UK and his overhaul of the capital gains tax system.But, Mr Darling told the Commons that "the action taken to support Northern Rock means that we have maintained confidence and stability in the banking system".And he did a U-turn on plans to impose an annual £30,000 levy on wealthy foreigners living in Britain who claim non-domicile status - the so-called "non-doms" - saying the scheme will be implemented from April with no further changes to the regime in this Parliament or the next.The Chancellor chose No Smoking Day - today - to put 11p on a packet of 20 cigarettes from 6pm and 4p on the price of five cigars. From midnight on Sunday, alcohol duty rates will increase by 6 per cent above the rate of inflation - meaning beer is up by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle.He also said that alcohol duties would increase by 2 per cent above the rate of inflation in each of the next four years.But, boosting his "green" credentials, the Chancellor said fuel duty will be raised by 0.5 pence per litre in real terms from 2010. However, he is delaying the 2p fuel duty rise, scheduled for April, until October "to support the economy now and help business and families".The move - following last-minute lobbying by motoring organisations and business leaders - will infuriate environmental campaigners who have been urging Mr Darling to stick to his guns.Mr Darling also announced plans for a zero rate of car tax in the first year for new, low-emission vehicles but a higher first year rate on the most polluting cars. And from April 2009, Vehicle Excise Duty will be reformed to encourage manufacturers to produce cleaner cars, introducing new rate bands.He said revenue from plane duty will be increased by 10 per cent because aircraft emissions are forecast to grow and confirmed the Government is poised to impose charges on the use of plastic carrier bags unless supermarkets make "sufficient" progress on a voluntary basis.Meanwhile, for families, Mr Darling announced that rules for housing and council tax benefits will change from October 2009, so parents are better off in work than on benefit. He said a working family with one child on the lowest income will gain up to £17 a week, lifting 150,000 children out of poverty.From April 2009, child benefit for the first child will increase to £20 a week - a year earlier than planned - while the child element of the child tax credit for families on low and middle income will increase by £50 a year above inflation.The Chancellor said a family with two children earning up to £28,000 a year will be £130 a year better off. A further £125 million to be spent over the next three years to help families.Mr Darling said the Government will invest £765 million next year and a further £950 million in 2010, taking 250,000 more children out of poverty. He said that since Labour came to power there were 600,000 fewer children in relative poverty and the number of children in absolute poverty had halved.He said: "If we are to build a fairer future for our children then we must eradicate child poverty in Britain."Tackling rising energy prices which are hitting poorer families, Mr Darling said 5 million customers on energy pre-payment meters will be given a fairer deal, with legislation if necessary.For the elderly, Mr Darling said he will raise winter fuel payments for over 60s from £200 to £250 and for the over 80s from £300 to £400 saying 9 million pensioner households will be better off.Mr Darling said the Budget offered "fairness and opportunity for everyone in Britain" and would "secure a strong, sustainable future".The Chancellor sat down at 1.21pm.© Independent Television News Limited 2008. All rights reserved.

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ITN | March 12, 2008