| Who would you vote for?
Yet another budget that hits familys is expected next week, Darling seems to have no clue and this is what the experts reckon will be delivered:
THE cost of family cars is set to rise under plans for a new “showroom tax” to be unveiled in this week’s budget.
Alistair Darling is planning a series of green taxes designed to force consumers to become more environmentally friendly. The centrepiece of the chancellor’s first budget is expected to be a levy on new cars, which could put £2,000 on the price of the largest “gas guzzlers”.
However, it will hit also families buying saloons, estates and people carriers. “People don’t take much account of the cost of car tax and fuel when buying a car, it is the price sticker in the showroom that makes the difference,” said a senior Treasury official.
Darling is also expected to announce: Above-inflation duty increases on beers, wines and spirits; Increased taxation on air travel; A partial climbdown on the taxation of “nondoms”; And an extra winter fuel allowance for the overseventies paid for by the energy companies.
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The chancellor was last night agonising over whether to press ahead with a 2p a litre rise in the cost of petrol – despite fuel prices recently hitting a record. Insiders claim he may yet be persuaded to delay the increase but is anxious to avoid accusations of hypocrisy by endorsing an ostensibly antienvironmental move.
The showroom tax is designed to boost the market for less polluting “hybrid” cars, such the Toyota Prius. It comes after measures such as offering cuts in annual road tax to green cars failed to change buying habits.
The new tax is expected to be based on the seven bands used to determine car tax. It will mean that Band A and B cars such as the Prius and Smart car will become relatively cheaper to buy. The cost of cars in the highest band G such as Range Rovers, Jaguars and Porsches, would attract the heaviest tax.
However, the price of many family cars will also rise. The petrol versions of the Vauxhall Vectra and Ford Mondeo lie in the above average band E and the Renault Espace is in G.
The chancellor, in his Wednesday budget speech, is expected to lay out a vision of all motorists driving environmentally friendly electric or hydrogen-powered cars by 2050.
He has been influenced by a report by Julia King to be published on Wednesday which will call for “urgent” measures to change consumer behaviour. “Technology achieves nothing if it is not adopted,” the report, commissioned by Gordon Brown, will conclude.
Duty on beer, wines and spirits will increase by more than the rate of inflation. Darling is also considering an alcohol “accelerator”, signalling that drink taxation will continue to rise in real terms.
The Treasury has in the past resisted tax rises believing that putting up the price of drink would simply encourage cross-border smuggling.
However, pressure from the health lobby, worries over binge drinking and the need for extra taxes to close the growing budget deficit have prompted a change of heart.
Darling has rejected Conservative plans for “smart” taxes which would target alcopops and super-strength lagers, arguing it would be an “unworkable gimmick”.
“If you are going to raise duty you have to do it across the board. By targeting specific types of drinks, you will just cause people to switch to other cheaper varieties,” said a Whitehall source.
The cost of foreign holidays is also expected to rise as Darling announces heavier taxes on the aviation industry. The current air passenger duty will be scrapped for a tax on entire journeys.
The new system is designed to discourage carriers from allowing half empty flights. However, an internal Treasury report says the new tax will also ensure “the industry makes a greater contribution towards its environmental costs”. Industry insiders believe the change could mean a family of four paying £100 more for a return trip to Spain.
Darling, reacting to criticism over plans to charge so-called “nondoms” - people domiciled abroad to avoid tax - a £30,000 annual levy, will also announce a series of concessions.
So if there was a snap election on Monday who would you vote for?
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