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Darling's first budget: what it means to marketers

 

LONDON - Chancellor of the Exchequer Alistair Darling's first budget has focused mainly on issues such as higher taxes on alcohol and the most polluting cars. Below is a roundup of how his budget will affect marketers in the year ahead.

Darling's first budget: what it means to marketers
 
Travel

Air passenger duty has been scrapped and replaced with a single tax per flight to encourage airlines to operate fuller flights. The tax will be based on emissions created by each aircraft, providing airlines with an incentive to operate new and more fuel-efficient planes.

The move will close a loophole that allows cargo flights and private jets to avoid paying taxes. The government hopes that the changes will increase its revenue from aviation by 25% to £2.5bn as well as reducing carbon dioxide emissions.

New measures at Heathrow and other airports, using biometric technology to speed up the time it takes to get through security checks, were also announced.

Retail

Darling said laws will be introduced by 2009 to tax plastic bags unless supermarkets do more to bring in charges for their use.

Drinks

Drinks companies face above-inflation tax increases on wine, beer and spirits in a bid to fund the government's drives to combat child poverty and tackle alcohol abuse.

Duties on alcohol will go up by 2% above inflation for next four years.

The budget increased the price of beer by 4p a pint, wine by 14p a bottle, spirits by 55p a bottle and cider by 3p a litre by Sunday.

Food

The delay in fuel duty rises will be welcomed by all manufacturing sectors including food companies as the UK economy slows and consumer confidence wanes. But with the rising cost of raw materials, the food industry fears the promotion of biofuels could give rise to potential conflicts with food supply.

Cars

As expected, Darling's so-called 'Green Budget' has cracked down on the most polluting cars, introducing a 'showroom tax' on the least fuel-efficient vehicles. From 2009, there will also be a major reform of vehicle excise duty. From 2010, the lowest polluting new cars will pay no road tax in the first year. Higher polluting cars will pay more.

The government already uses vehicle excise duty to encourage people to buy cleaner cars and vehicles which produce fewer than 100g of CO2 per kilometre are exempt from road tax.

Darling also delayed the 2p increase in petrol duty, which had been due to come into effect on 1 April, due to recent increases in crude oil prices.

 

 

 

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Jeremy Lee

Jeremy Lee - 12 March 2008

Appalling - the carrier bag tax is just a ridiculous attempt at crowd-pleasing and the rest of the hikes have nothing to do with the environment or responsible drinking and more to do with filling a Northern Rock-sized hole in public finances. Still at least the regional assemblies remain well-funded.

David Llewelyn-Jones - 13 March 2008

I concur with Jeremy's statement on the carrier bag tax. M&S's current 5p charge for bags is also questionable.

If the reasoning behind it is to encourage consumers to go without the bag, they should first be made aware of the charge and given a choice, rather than just having their items automatically put into a bag.

Secondly, if the surcharge is supposed to act as a financial deterrent, it should be of a higher amount than a paltry 5p.

James Cooke - 13 March 2008

Hocus pocus. Green group think nonsense. Blindness and stupidity...

The economy is at the end of a nasty credit induced , over-extended boom.

It will soon need low taxes and low interest rates to help it cope with a few years of penny pinching from over-stretched punters who 'don't really need anything' until they get back in black, or credit lines re-open. Perhaps even some government spending to help stimulate things...

Unfortunately the government has already run up public borrowings the size of Ireland. So it's up a creek.

It won't want to gently lay off un-necessary bureaucratic staff over the next few years either. While sensible, that would cost too many lefty votes from council workers and the like. Oh well.

I hope there's still a country worth saving by the time the Tories get in. Seriously. The last thing we need in recession is a bloated left-wing government.

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