The budget 2008
Updated on 12 March 2008
Alistair Darling delayed plans to increase fuel duties and predicted slower growth for Britain's economy, in his first budget speech today.
The chancellor floated the idea of a plastic bag tax, and warned of higher road taxes for cars with high carbon emissions.
It was also announced that an extra 11p will be added to the price of a packet of 20 cigarettes, 4p to a pint of beer, 14p to a bottle of wine, and 55p to a bottle of spirits.
Speaking against the backdrop of the most difficult economic conditions for more than a decade, Darling was keen to emphasise stability and continued growth.
He said: "The core purpose of this budget is stability, both now and in the future.
"Britain is better placed than other economies to withstand the slowdown in the global economy."
Despite this, he admitted the UK's economy would slow down, and scaled back growth predictions from 2-2.25 per cent a year, to 1.75-2.25 per cent. Inflation will remain at 2 per cent.
'Britain is better placed than other economies to withstand the slowdown in the global economy.'The chancellor, Alistair Darling
A 2p increase in fuel duty - which was due to come into force next month - will now be postponed until October, the chancellor revealed.
He said the postponement, which will be greeted with dismay by environmental groups, would help the economy during its current malaise.
Income tax was also cut to 20p in the main rate.
The chancellor pledged £2bn to the Armed Forces, saying he was "deeply proud" of the work they were doing. A total of £200m was also earmarked to help improve GCSE grades.
So called 'green' policies unveiled by Darling involved a potential tax on plastic bags, if voluntary schemes prove unsuccessful, as well as increased road tax for high emissions vehicles, and road pricing schemes.
Tory leader David Cameron was unimpressed by the announcements, saying it failed to offer any relief for taxpayers.
He said: "This budget was delivered with all the excitement of someone reading out a telephone directory.
"The prime minister and the chancellor live in an entirely different world. People's mortgage payments are getting higher, the fuel bills are going up, the tax bills are more - and there's no reductions here.
"This budget has just made it worse."
