thetorydiary

In opening his response to the Budget yesterday, David Cameron suggested that he supported the Government's proposed hike in cider duty:

"Remember our tax plan for super-strength cider? When we announced it, the Chancellor's spokesman said that that was illegal. It is now official Government policy."

But today - amid a burgeoning Facebook campaign against the rise in cider duty at 10% above inflation, accompanied by a bid to get I am a Cider Drinker by the Wurzels back into the charts - the party has made it clear that it does not support the blanket measure on all ciders.

On a trip to West Country, where much English cider originates, David Cameron said he supported only the duty increase for high alcohol ciders rather than the traditional apple drink:

"The Government has made a mistake. They don't understand the West Country, they don't understand this part of our country and they've got it wrong. Of course we need a higher tax on the dangerous high strength, things like White Lightning, which have as much relation to an apple as I do with Gandhi. But proper cider that people like to drink down the pub, we shouldn't be having a great tax hike on that."

George Osborne echoed this in the House of Commons:

"He [The Chancellor] said yesterday he was taxing the drinks that cause the binge drinking problems. Announced by us at our Conference last year, denounced by them – and it seemed, adopted by them Except, it turns out, they haven’t actually copied our idea. They’ve used it as a cloak for a huge duty rise on all cider drinkers – instead of just the super strength white ciders that are linked to problem drinking – and that is something that will hit the industry hard and it is something we oppose."

• "Alistair Darling failed to explain in his speech that all personal allowances were frozen at £6,475 in the Budget (Table A4, page 123)
• But the latest RPI inflation figure is 3.7% (ONS)
• According to the Treasury’s own ready reckoner, the revenue gain to the exchequer from not increasing all tax allowances in line with 3.7% inflation is £2.2 billion in 2010-11 and £2.8 billion in 2011-12[1]
• This is the biggest single tax rise in the Budget
• A 3.7% increase would correspond to a £240 increase in the personal allowance
• At the 20% basic rate of tax this means that the Budget contains a £48 a year stealth tax on every basic rate taxpayer starting in April, or £96 a year for a two earner couple
• Higher rate taxpayers will lose even more because the higher rate threshold was also frozen
• More than 30 million income taxpayers are affected by this
• This is not usual practice – in previous years personal tax allowances have been increased by more than inflation."

Over on CentreRight, Harry Phibbs has attacked this "stealth tax" on the poor.

Tim Montgomerie

Cameron says Darling's Chancellorship started with stealing Tory ideas on inheritance tax. It ends with stealing Tory ideas on stamp duty. The only new ideas are coming from the Tories.

Darling didn't tell us about the widening trade deficit nor falling business investment. Borrowing may be slightly less terrible than previously thought but more is being spent on debt interest than on education. Labour doubled national debt and will double it again.

Labour have nothing to be proud of. This is the worst recession in our modern history. We were the first in recession and the last out. Biggest risk to recovery is another five years of Labour.

In thirteen wasted years Britain has gone from the top of the premier league in tax and regulatory competitiveness to the bottom of the Conference. The manager needs to be sacked.

The big choice at this election, says Cameron, is between inaction and starting to repay debt. Debt will be as bad in four years' time under Labour plans as when Denis Healey went cap in hand to the IMF in the 1970s.

Labour has planted ticking tax bombshells waiting to explode after election, killing the recovery.

The idea that Brown is the answer to the nation's economic challenges is as silly as putting the Captain of the Titanic in charge of the lifeboats, or putting Robert Maxwell in charge of pensions, or Richard Nixon in charge of cleaning up politics. No one has yet thought of a question to which the answer is five more years of this Prime Minister.

Under Labour there's only ever debt, taxes and waste. Only the Conservatives have the energy to give Britain a fresh start.

Tim Montgomerie

4.45pm Full text of DC's response

VERDICT: Darling sits down at 1.30pm. Ending with his central message that Labour acted to mitigate the recession while the Tories would have done nothing. The jibe at Ashcroft summed up the political nature of the Budget. No action announced to tackle the biggest budget deficit in UK history. Whoever wins the General Election we'll need an emergency budget to start reducing the borrowing. The real pain will start then.

***

Highlights, not verbatim, most recent at top of post.

Huge Labour cheers as Darling announces agreement on sharing tax information with government of Belize. George Osborne shakes his head. Sir George Young laughs. Measures to tackle tax evasion and avoidance are predicted to save £500m pa.

£2bn for new Green Investment Bank. [Like the stamp duty policy for FTBs that's another stolen Tory policy].

Extra £100m on local roads to deal with potholes. £285m for motorways.

In another dividing line with the Tories promises to protect corporation tax allowances. [George Osborne warns to abolish the allowances and cut headline rates of tax].

Promises a 15% increase in the proportion of central government contracts that go to small/medium-sized enterprises and cuts in business rates for one year. Another quango to be set up; UK Finance for Growth.

Confirms asset sales, including Tote and Dartford Crossing. Promises £11bn of efficiency savings.

[Chris Cook, FT leader writer: Darling’s pledge to remove the “bulk of the structural deficit” will be a deliberate choice of words. This was, until recently, the exact choice of words used by the Tories (who’ve drifted a little: they now say they’d cut the “bulk of the current structural deficit”).  So despite the extremely different tones of the two parties, there is basically no difference between the Tories and Labour on how deep they would cut. The only concrete real difference we know of is that the Tories insist that we need to start cutting now - but won’t say how hard.]

Number of civil servants in London will be cut by a third - moving more jobs northwards.

Best Tweet of the Budget so far:

No further announcements on VAT or income tax. 60% of reduction will be paid for by richest 5%, says Darling.

Deficit to fall from 11.8% this year to 5.2% in four years.

Tory frontbench doing their sums while Darling speaks:

Borrowing forecast cut from £178bn to £167bn in 2009/10.

Higher fuel duties will be staggered. 1p in April, 1p in October, 1p in January.

Economy predicted to grow between 1% and 1.5% this year.

He confirms that the stamp duty threshold will be doubled to £250,000 for first time buyers - much Tory cheering - to be funded by higher stamp duty (from 4% to 5%) on house purchases of £1m plus - no Tory cheering. [Who needs Cable's mansions tax?].

[Comment: This is a very political budget statement. We've had seven minutes of the 'Tories are the do nothing party' and the recession would have been much worse if they'd been in power.]

Recession of 6% would have been worse if government hadn't acted, Darling claims. Rate of repossessions was double in the last recession, he claims. Business failures were also greater. Unemployment in UK is lower than in USA and Eurozone.

Darling confirms that a basic bank account will be a legal right for all. He also confirms that bank bonus tax brought in £1.5bn more than originally expected.

Recovery is in its “infancy” says Darling, pledging to halve deficit over four years and to continue to use government power to protect people.

Opening statement: £2.5bn growth package to help small businesses are "at heart" of Budget.

MUCH HAS ALREADY BEEN LEAKED OF COURSE.