Chancellor Alistair Darling has defended his first Budget saying he is taking "a cautious view" to weather economic turbulence.
He reiterated his claim that, thanks to low unemployment and inflation, Britain is well placed to deal with any fallout and shrugged off criticism of his economic optimism.
The Chancellor, who slashed growth forecasts, said it is unsurprising that borrowing is forecast to soar to £43 million given the global impact of the sub-prime mortgage crisis in the US.
"I believe our projections are in line with what people are saying and most people expect our economy to grow" - Alistair Darling
He said: "When you get this period of uncertainty the right thing to do is to allow your tax policy and your fiscal policy to support the economy. That's what we're doing."
He added: "I said yesterday, at some length, that we are going through pretty uncertain times, but I believe our projections are in line with what people are saying and most people expect our economy to grow."
Shadow chancellor George Osborne branded it a "bad news Budget" which "kicked Britain's families when they're down".
Mr Osborne said: "The cost of living is already rising fast and the Government has added to it with stealth taxes on cars and alcohol, when we believe that these kinds of taxes should be offset with tax reductions elsewhere."
And as London's benchmark FTSE 100 index fell over 100 points in early trading as recession fears continued, the independent Institute for Fiscal Studies said Mr Darling had delivered his Budget "with fingers crossed".
The IFS said: "If the downturn is deeper than expected, if he is over-optimistic about the underlying strength of tax revenues, or if political pressure requires further giveaways, then Mr Darling or his successor may have to inflict more pain."
Mr Darling defended delaying a planned 2p increase in fuel duty, due on April 1, which has now been put back to the autumn.
The last-minute climbdown, reportedly in the face of lobbying by business and motoring organisations, has infuriated environmentalists who had been promised the "greenest" Budget on record.
And he said his new "showroom tax" for cars - ranging from zero to £950 for the biggest gas-guzzlers - will enable people to make "better choices" when buying new vehicles.
Meanwhile, Mr Darling said his booze tax hike was "a fair and a reasonable thing to do".
From Sunday, drinkers will feel the pain of a 6 per cent above-inflation hike for alcohol duties - putting 4p on a pint of beer, 3p on a litre of cider, 14p on a bottle of wine and 55p on a bottle of spirits. This will continue to rise by 2 per cent above inflation in future years.
Mr Darling said: "If you look at the price of a bottle of wine now, it would have cost you more to buy it ten years ago, if you go into a supermarket."
He said Tory plans to raise duty on alcopops to fund tax cuts on other types of alcohol would push young binge drinkers to other types of drink and be in breach of EU laws.
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