The verdict on Darling`s debut

27 March 2008

As the dust finally settles on the first Budget announced by chancellor Alistair Darling, consumers across the UK are starting to come to terms with what it all means and how it affects their day-to-day lives.

The main headlines on the day of the announcement seemed - in comparison to budget`s by his predecessor Gordon Brown - fairly low-key. Slight changes to long-term mortgages, the continuing reform of the individual savings account (Isa) system, a £950 `showroom tax` for gas-guzzling cars and a sharper than usual increase on alcohol duty.

As the measures have started to take effect, consumers - and the industry - have been able to digest the changes properly.

From March 16th, beer increased by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle.

The Beer and Pub Association’s Rob Hayward told the Telegraph: "This will escalate pub closures, which are already at record levels. And further depress beer sales which have sunk by one million pints a day over the last 12 months alone."

Changes to the mortgage system saw Mr Darling announce plans to help increase the number of long-term mortgages taken up, in a bid to reduce risks for first-time buyers and help them stay on the property ladder.

Sean Gardner, of MoneyExpert, said: "Long term fixed rate mortgages are here to stay. The chancellor himself announced his support for lengthy fixed deals in the Budget and lenders have already started to react to demand by adding long term products to their portfolios."

Meanwhile, savers were given a boost by Mr Darling when he confirmed a £3,600 limit on Isas from April, up from the previous £2,500. A savings "gateway", designed to combat the fall in private pensions, will also be launched in 2010.

Ewan Edwards, head of savings and investments at Alliance & Leicester, said: "Whilst the changes due in April this year are certainly steps in the right direction, we are disappointed that the government didn`t take this opportunity to further improve the Isa system.

"The structure must be straightforward enough for the man on the street to understand."

Also announced during Mr Darling`s debut at the dispatch box was a so-called showroom tax, in which a £950 levy will be added to the most environmentally harmful cars when sold either new or used.

A major reform of road tax will also see no tax having to be paid by the most eco-friendly car drivers.

As a result of this announcement, a poll by Direct Line taken a week after Mr Darling`s announcement saw that 50 per cent of motorists were now less likely to consider buying a high emission car in the future.

Direct Line`s Jennifer Culley said: "We expected the new tax to have an impact and this swing in opinion demonstrates that by hitting people`s wallets, Mr Darling has succeeded in making people think twice before they head for the forecourt."

Like most Budget`s, Mr Darling`s has had a bit of a mixed reaction. However, in uncertain financial times, he might just have succeeded in his task of steady the ship slightly.

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