Darling cuts stamp duty and pledges to slash deficit by 2015
Published 25/03/2010 | 05:00
BRITAIN'S chancellor of the exchequer Alistair Darling produced a surprise cut in stamp duty on housing in his budget yesterday, while pledging to cut the UK budget deficit.
With a general election weeks away, Mr Darling removed stamp duty on house purchases up to £250,000 (€280,000) increased pensions, and phased in a fuel-duty increase more slowly.
But stamp duty on house purchases worth more than £1m was increased from 4pc to 5pc.
Mr Darling set out his deficit reduction plans, saying it will fall from the expected 11.8pc of output (GDP) this year to 4pc by 2015.
This compares with Ireland's EU-approved plans to cut a 13pc of GDP deficit to below 4pc by 2014.
Better than expected tax revenues allowed Mr Darling to cut the expected deficit in the year from April from a previous estimate of 12.6pc of GDP.
Mr Darling warned that spending restrictions from 2011 will be the toughest for decades.
"The budget went a bit further towards addressing the fiscal crisis than was widely anticipated, but it leaves much still to be done," Jonathan Loynes, chief European economist at Capital Economics, a research consultancy, said.
"Further decisive action to put the public finances back into a sustainable position will still be needed after the election," he added.
"We're meant to be impressed that the deficit has turned out a few billion lower than the last disastrous forecast," opposition leader David Cameron said.
"It is more than every single previous Labour government has borrowed put together. Like every Labour government before them they've run out of money," Mr Cameron said.
Credit ratings agency Fitch said the budget statement does not materially change its view of Britain's public finances.
"The projected path of deficit reduction still renders the public finances vulnerable to shocks," its analysts said.
The budget included a £2.5bn "growth package" to support renewable energy projects and key future technologies.
He said that growth was fragile, and claimed that sluggish growth in the eurozone was holding back the UK recovery.
"It is imperative that EU countries act with renewed vigour to get the European economy working again," Mr Darling said.
Mr Darling plans to save an extra £11bn from efficiency gains across government departments. Postponing some spending programmes will save £5bn, he said.