The Budget rumour mill
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3. Pensions
Little is known about Darling’s plans for pensions but experts have their own wish list. Malcolm Cuthbert, managing director of financial planning at stockbrokers Kilik & Co, would like investors to be able to reclaim a 10% tax credit for pensions and Isas, and for them to be free to invest as they choose within a pension, for example, being able to put property in a pension. NOT LIKELY
Age Concern wants the Chancellor to reinstate the link between earnings and the basic state pension. A spokeswoman says: “It’s a national disgrace that there are still 1.8 million older people living in poverty in the UK. At the same time the real value of the Basic State Pension is declining. If the state pension had continued to be linked to increases in average earnings since 1980 the basic pension would now be worth over £50 more a week.” NOT LIKELY
4. Car taxes
A tax which could add up to £2,000 to the cost of gas-guzzling cars is widely expected. As well as hitting less-than-environmentally-friendly 4x4s, any move could also affect people buying family vehicles such as saloons, estate cars and people carriers.
But will the tax have the desired effect? Jennifer Culley, spokesperson for Direct Line, says, “The latest research from Direct Line shows 16% of drivers intending to buy a new car in 2008 will purchase a 4x4 or people carrier.”
Those buying fuel-efficient cars, for example the Toyota Hybrid, could benefit from lower taxes. HIGHLY LIKELY
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5. Fuel
A possible 2p per litre rise in the cost of petrol hangs in the balance but would prove highly unpopular with consumers. Will he take the plunge? LIKELY
6. Plastic
There are also rumours that Darling will levy a tax on plastic bags produced by manufacturers, which in turn would be passed on to consumers, to discourage people from using them. POSSIBLE
7. Air travel
An increase in the amount of tax paid by consumers for air travel is likely, experts claim. It would form part of the measures aimed at forcing people to become more environmentally aware.
“There will be more green taxes,” says Harry Katz, financial adviser and business consultant at Norwest Consultants. “We've been softened up with all this nonsense, with the result to be higher prices all round.” LIKELY
8. Drink
Drinkers are likely to face above-inflation price increases on wine, spirits and beer. In “binge-drinking” Britain, this announcement would come as no real shock. HIGHLY LIKELY
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