In brief: The budget 2009

15:46 22 April 2009

Chancellor Alistair Darling predicted that the economy will return to growth by the end of 2009 in his eagerly awaited budget announcement.

He confirmed that the UK would have to borrow a record 175bn this year as he divulged measures for reversing the sharpest contraction of the economy since World War II.

But his forecasts have been called "preposterous" and "ludicrously optimistic" by opposition politicians who believe the chancellor's proposals for economic growth is a "fantasy".

However the chancellor told the BBC he remained "confident" about "the fundamentals of the economy" and that his targets are "firmly in range.

Key factors

Here are the key points of Alistair Darling's 2009 Budget:

Cigarettes, alcohol and fuel

Alcohol taxes to go up 2% from midnight - putting the price of the average pint up 1p

Tax on tobacco to go up by 2% from 6pm - equivalent to an extra 7p on a pack of 20 cigarettes

Fuel duty to rise by 2p per litre from September, then by 1p a litre above indexation each April for the next four years

Car scrappage scheme

From next month until March 2010 motorists to get 2,000 discount on new cars if they trade in cars older than 10 years

They will have to show they been the registered keeper of the vehicle for the previous 12 months before ordering the new car

The government will provide 1,000 with the industry expected to provide the other half

Tax

Income tax for those earning more than 150,000 to rise to 50% from April 2010

Tax relief on pensions to be reduced for people on more than 150,000 a year from April 2011

UK economy

Economy forecast to shrink 3.5% in 2009

Growth expected to pick up in 2010, expanding by 1.25%.

Economy to grow by 3.5% annually from 2011

Public borrowing to increase to 175bn this year

Borrowing levels to be 173bn, 140bn, 118bn and 97bn in years after

Consumer price inflation to fall to 1% by end of year. Retail Price Index to go to -3% by September.

Capital investment to continue at historically high levels until 2012

Jobs and trading

Government support for economy to protect 500,000 jobs

Statutory redundancy pay up from 350 to 380 a week

Extra support for people who have been out of work for 12 months through the flexible new deal

From January all under-25s out of work for a year to be offered a job or training place with extra money on top of benefits for those in training

1.7bn extra funding for Job Centre network

250m funding to help people get work experience in growth industries

Funding to create 54,000 new places in sixth form education

Housing

Scheme to guarantee mortgage-backed securities to boost lending

Stamp duty holiday for homes up to 175,000 to be extended to end of year

Extra 80m for shared equity mortgage scheme

500m to kick-start stalled housing projects - including 100m for local authorities to build energy efficient homes

50m to upgrade housing for the armed forces

Government savings

Tax loopholes and schemes identified which could provide 1bn of extra revenue over the next three years if closed

An extra 9bn in efficiency savings is planned

Public spending growth to be cut from 1.1% next year to 0.7% from 2011-2012

Benefits

Child tax credit to rise by 20 by 2010

Child trust funds for disabled children to rise by 100 a year, 200 a year for severely disabled children

Savings

Annual limit for tax-free ISAs to rise to more than 10,200 for over-50s this year and for everyone else next year. Of that amount 5,100 can be saved in cash

Environment

Britain commits to cut carbon emissions by 34% by 2020

An extra 1bn to help combat climate change by supporting low-carbon industries

525m for offshore wind projects over the next two years

435m support for energy efficiency schemes for homes, firms and public buildings

405m to encourage low-carbon energy and advanced green manufacturing

Help for buisness

Help for loss-making companies extended - they will be able to reclaim more taxes paid in the last three years until November 2010

Businesses' main capital allowance rate doubled to 40% to encourage firms to bring forward investment

New 750m strategic investment fund to help emerging technologies and regionally important sectors

Pensioners

Grandparents of working age who care for their grandchildren will see that work count towards their entitlement for the basic state pension

Winter fuel allowance to be maintained at higher level - 250 for over 60s and 400 for over-80s - for another year

The basic state pension will be increased by at least 2.5%, regardless of inflation

From November the limit on savings pensioners can have before their Pension Credits are reduced is to be raised from 6,000 to 10,000 to help those hit by low interest rates. It will mean an average of 4 extra a week, says the chancellor