Budget 2009: The key measures at-a-glance

The Times at-a-glance guide to Alistair Darling's Budget.

Taxes
- VAT will return from 15% to 17.5% by December
- Fuel duty will rise by 2p a litre from September and a further 1p above inflation thereafter.
- Alcohol duty will rise by 2% from midnight tonight
- Tobacco duty will rise by 2% from midnight tonight
- From April 2011, pension tax relief for people earning over £150,000 will be restricted to ensure it is tapered to the same 20% the majority of other people receive
- Tax rate for people earning over £150,000 a year will rise from 40% to 50%. It will be introduced by next April
- Fuel, alcohol and tobacco duty increases will raise £6 billion by 2012
- Government will close loopholes and schemes which will generate £1 billion over three years

Family finances and pensions
- Child tax credit will increase by £20.
- Children with disabilities will get an extra £100 in their Child Trust Fund and children with severe disabilities will receive an extra £200
- Pensions will rise by 2.5% even if the RPI measure of inflation continues to fall to below zero, as expected by September
- Pensioners of working age who look after grandchildren will gain in their basic state pension
- Winter Fuel Allowance for pensioners will be extended for another year and increased to £250 for the over 60s and £400 for the over 80s
- Capital exemption on pension credit has been increased, raising the ceiling from £6,000 to £10,000 from November this year
- Annual limit on ISAs will be increased £10,200, of which £5,100 can be saved in cash

Jobs
- Government pledges £1.7 billion to support Jobcentre Plus and the New Deal to help protect 500,000 jobs.
- From January, all people aged 25 years or younger will be given a job or training if they have been unemployed for 12 months or more. This is forecast to help 250,000 into employment.
- People in this scheme, placed in a job, will receive a wage. Participants on a training scheme will be given additional money on top of income support.
- £260 million will be provided to train young people for skills needed for emerging industries
- £250 million will go towards creating new sixth-form places, and a further £400 million in 2010-11
- Homeowners who lose their jobs will be given an additional six months of mortgage payments to cover costs while they seek employment
- Statutory redundancy pay will increase from £350 to £380 a week

Housing
- Stamp duty holiday on properties worth £175,000 or less will be extended until the end of the year
- Pledge to begin a scheme to guarantee securities backed by mortgages to help increase flow of money in housing market
- Government will make a further £80 million available for HomeBuy Direct - its shared equity mortgage scheme
- Darling announces £500 million pledge to kick-start housing
- A further £100 million will be made available for local authorities to build energy efficient houses
- Government will bring forward investment of £50 million for the modernisation of homes for the armed forces

Motoring
- Motorists will be given £2,000 to scrap cars older than ten years in exchange for purchasing a new vehicle. The scrappage scheme will be introduced from next month until March 2010

Economy
- UK economy is expected to shrink by 3.5% for 2009 but will begin to grow by the end of the year. Forecast for GDP growth in 2010 by 1.25%
- GDP growth will be 3.5% in 2011 and will grow at 2.75% in the following year
- CPI measure of inflation is expected to fall to 1% by the end of the year. The Bank of England's target for inflation will remain at 2%.
- RPI measure of inflation, which includes housing costs and is used as a benchmark for pay rises and pensions, is expected to fall to -3% by September before moving back to zero by the end of the year.
- VAT cut from 17.5% to 15% will continue until December

Borrowing
- Borrowing will reach £175 billion, 12.4% of GDP, this year. It will hit £173 billion next year then the following over subsequent years: £140 billion, £118 billion and £97 billion.
Public Spending
- Public spending will be cut to 0.7% - it had been forecast at 1.1%
- Efficiency savings to reap £9 billion by 2011-12

Business
- Main capital allowance rate will be doubled to 40%

Energy and Environment
- Commits to cutting carbon emissions by 35% by 2020
- Aims to exploit Britain's status as an island so will commit £525 million to wind farm projects
- Will make £1 billion available to help to combat climate change.

By Dearbail Jordan

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Comments

[Tom]

Does that mean I can buy a dirt cheap car on ebay - for £100 say, to get a £2000 rebate on a new car? Excellent.

[Dave White]

Tom: No it doesn't. there will no doubt be small print that insists that (a) you've owned it for x years and (b) you can only buy some nasty little eco-car. Of course prices will just go up bu £2000......

[Simon]

Child tax credits increasing? The fundamental problem for the planet is too many people - yet we offer money to have unlimited offspring.
The (growing) social underclass of the U.K. have just had their votes bought again by Labour. Complete madness...

[Sue]

Scrap MP's expenses (£91m 2008-2009), that money can be put into hospitals, and other needy services.

[John]

No Tom. Those £100 cars are suddenly £2,000 cars.

[Andy]

budget hasn't impacted the tax free status of spread betting right?

[Russ]

50% tax rate who said nu labour weren't true socialists.

So a person earning 200k pays much more tax than other people gross but we are alll treated as equal. Bonkers

[Dr Roy Thurston]

Brown hought he was a good Chancelllor but for ten years he was carried along powerless by the tide of the world economy -it just happened to be booming (albeit on dodgey money). Now the UK economy will again be carried along powerless by the world economy - in spite of whatever Darling does. Let's hope it goes in the right direction

[Neil]

I am a lower rate taxpayer but feel it is totally wrong for the state to steal 50% of someones wage. As with all Labour budgets the hard working and responsible are punished at the expense of the workshy and irresponsible.

[Jon]

Plus Tom it won't work because the German scheme isn't and we have no car industry, plus it isn't going to make a difference anyway, those £100 cars won't exist because they will scrap them instead before you get them, or the next owner will and you won't get a small cheap cars for students and the like, forcing them to get into debt to get a new rubbish eco-box instead. Bye bye kit car and modifying and even small car scene!! it isn't eco-friendly either!!

[Neil]

Growth figures again optimistic.

Efficiency savings which the gov't will never deliver on.

Wasteful spending on car scrappage schemes, wind farms and child tax credits.

Debt figures do not include PFI projects or unfunded state and public sector pensions. If they did and were truthful they would be at bannana republic levels.

What we needed was a budget that addressed gov't waste. Whats we've got is more wasteful spending.

[Julie]

I don't understand how they came to the magical number of 25 to get a job or training.

Does this mean we can retire at 26?

[Nick Wilson]

The vital figures are the net increase in expenditure, the net increase in income, timing of expenditure and income, and the assumptions on which Government income expectations is based.
Any chance of a summary?

[Derek]

Why does our status as an island allow us to exploit windfarms? If it referred renewable tidal or wave energy it would make sense, not wind!

[alex]

still no forced redundancies in all the wasteful government departments from housing, road cleaning, ASBO officers,..lesbian outreach workers and the like

Billions of quid a year wasted on Councils worthless Jobsworths none-jobs,..occupied by worthless inept, people
wasting taxpayers money hand over fist, day in, day out

[Derek]

Raises tax rate for people earning over £150,000 from 40% to 50%. Will not effect politicians as they get the majority of their wages paid to them as expenses!

[Billy]

I have an 8 year old Vauxhall Zafira, the reason why I have an 8 year old car is because I can not afford to buy a new one. The £2K offerred as part exchanging my old car for a new one, still leaves me with approx £13K to find. Does this Goverment live in the real world? Oh and plus I can't claim it on expenses like some folk can!!

[Wilma]

Well said Simon-ludicrous to increase child tax credits. No wonder Britain has so many teenage mums etc etc and no wonder it's the immigration utopia of Europe. When is this government going to get real? Oh,and Billy, your Vauxhall Zafira needs to be 10 years old!

[Martin Ryan]

Morally, economically and politically inept, bankrupt, deceiving bunch of shysters who will never be forgiven or forgotten for what they have done to this generation and our childrens' generations to come.

[Amanda]

50% higher tax rate - great, anyone earning more than 150k can surely afford it but why are we encouraging teenage pregnancies? What kind of message do you think this gives out to young people?

[Jon]

Amanda, as a young person (PC term for me!) I have not got the faintest idea, personally I don't see why it will help or hinder people, with companies charging the earth for such small items for child upbringing what is £20 a year (I assume it is an annual thing?) going to buy a child, nowt is the answer, why is it an encouragement for suddenly teenage pregnancies it is happening at an alarming rate already so why is there going to be a boom? also where has £525 Million come from??

[Guy]

Amanda

Whether anyone earning above £150,000 can afford another 10% of their earning stolen is largely irrelevant.

Personally my earnings have fluctuated around the £100k to £150k pa when charging day rates and my viewpoint is I see it as totally unacceptable that Labour should steal my pay to cover their inept economic policy.

Further I can see the argument for "fair2 when it's 40%, at 50% i.e. when the state takes more of my earnings (NI contribution) than I do then I say that's "unfair".

Those I know who will leave the country will do, some will look at tax avoidance and more still will just decrease economic activity.

If and when I hit the £150k mark I'll just start taking days off and fewer consultancy contracts rather then pay these socialist scum any more money.

As always increased tax rates will lead to smaller tax takes. Labour never learn

[Tony]

What this means?

The richest will work less, or leave the country.

The underclass will continue to grow, unabated.

We will have to pay more to drink alcohol responsibly.

We will have to pay more to drive our cars responsibly.

Jobs that are economically inviable and, therefore, unstable will be protected, thus keeping the wolf at the gates only in the short-term.

The environment is still on the back-burner.

I'll end on a positive though! The elderly are less likely to freeze to death, which I don't think anyone would argue with.

[Louise]

Why can't we just take the vote back away from those who have never worked and just suck our country dry??? That way Labour can stop stealing our money to pay for their despicably selfish lifestyles.

[Ian]

The problem is the level of unaffordable government spending NOT the rate of tax we pay. Why no news on taking a axe to the unproductive ineffective overbloated public sector. Effeciency savings of 15bn, peanuts compared to the overall public borrowing requirement. What rubbish from the party that bankrupted the UK.

[Robin]

How come no-one is mentioning the big hike in the upper level of NI by £74 per week. This means the 11% rate of NI extends up to £43,880 - the same level at which the higher rate of income tax kicks in (personal allowance £6475+£37,400=£43,875).

This will cost EVERYBODY earning £43,800 or more an extra £423 this year (and anyone earning over £38,000 by a lesser amount).

The real rates of tax+NI are 31% up to £43,800 then 41% on earnings above (with 51% for earnings above £150,000 from next year).

The extra tax band may hit the richest next year but the NI rise will hit all middle earners this year!

[Golden Trade Investment]

The richest will work less, or leave the country.

The underclass will continue to grow, unabated.