UK Budget 2010 - What it means to the man on the street

Alistair Darling

Budgets come, and budgets go, and it's fair to say some resonate more than others. The 2010 budget brought with it some major questions. The country is crawling out of a pretty hefty recession (so hefty in fact that we haven't seen one like it since the Great Depression) and the national deficit has reached an uncomfortable and eye-popping £170 billion.

Couple this with the fact this could be Alistair Darling's final swansong as chance llor, and the rumours emanating from the City was that he was going to out with a bang, namely; to be the chancellor who went down in history as the man who did everything possible to restore the economy.

So what was the general results of the 2010 Budget? And did Mr Darling deliver a brighter future for Britain?

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Overall

As expected Mr Darling drew reference to the country's borrowing. Mr Darling says it will be £167 billion this year - £11 billion lower than the earlier forecast of £178 billion.

By 2013/14, Mr Darling said the overall debt will be £100 billion lower than originally predicted at the budget last year.

As a share of the economy, borrowing is forecast at 11.8 percent of GDP this year, 11.1 percent next year, then 8.5 percent. In 2012/13 it will be 6.8 percent, then 5.2 percent, falling to four percent in 2014/15

Mr Darling confirmed he has revised the growth forecast for 2011 down to between three percent to 3.5 percent. This is in order to bring growth back in line with predictions from the City.

For 2010, growth is predicted to be one to 1.5 percent.

Banks

Mr Darling confirmed state-supported banks are starting to turn things around in line with the arduous recovery from recession. Accordingly, the Treasury has already received more than £8 billion from them in return for the support it gave.

The 50 percent tax on bank bonuses - announced in the pre-Budget report last year - has also raised more than £2 billion for the collective pot.

Further, Mr Darling stated that everyone in the UK is to be guaranteed access to a bank account. This will address the one million people currently denied it.

Business

In relation to the slow recovery from recession, Mr Darling told the House that Britain "can't take growth for granted," as a result the government must play its part in helping businesses to expand and grow.

The chancellor confirmed that an accessible access to finance is key for these businesses, and confirmed, as was leaked yesterday, that both state-subsidised Lloyds-TSB and Royal Bank of Scotland (RBS) will be required to lend around £94 million, with at least 50 percent of that figure going to small and medium-sized firms.

Fuel

We're all sick of paying £60 to fuel our car, and it isn't going to get any better. Mr Darling confirmed the policy on fuel won't be the immediate three pence hit as expected next month, but in fact it will go up by one pence in April, another one pence in October and a final one pence in January 2011.

Property

First-time buyers will get some relief. They will not be required to pay stamp duty on properties worth up to £250,000. That will apply until the end of 2011. Mr Darling confirmed that in order to achieve this there will be a hike of five percent on stamp duty for properties worth more than £1 million.

Inheritance tax figures will be frozen for four years

Alcohol and Tobacco

Like previous Budgets, duty on beer, wine and spirits will increase from midnight, Sunday. The increase will be an increase of two percent above inflation for two further years from 2013.

Cider drinkers will be hit the hardest, with Mr Darling confirming that duty on cider will increase by ten percent, mainly due to having laxer duty in the past.

Surprisingly, tobacco duty won't take one complete hit, as Mr Darling confirmed that the increases will be staggered thus: By one percent immediately, then a further two percent in subsequent years.

Budget smoke and mirrors? - Response quotes

David Cameron claimed that "[Labour will] never get a medal for courage," with regard to the Budget. He continued, "they have given us the biggest bust and now they are forecasting an almost permanent boom - why should we believe them?"

"[The government will spend more on paying debt interest next year]than on educating our children." David Cameron said smugly whilst smiling to Gordon Brown.

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