Chancellor threatens compulsory carrier bag charge

In his first Budget speech, Alistair Darling said the government "wanted to be able to take action" against the "damage inflicted on the environment" by single-use bags.

"We will introduce legislation to impose a charge on such bags if we have not seen sufficient progress on a voluntary basis," he said.

Darling said that legislation, which would come into force in 2009, could lead to a 90% reduction, equating to 12bn bags.

Darling said that money raised from the scheme would go to environmental charities.

The Budget also included more help for small and medium-sized businesses in the form of a £60m injection into the Small Firms Loan Guarantee scheme for the coming year.

Darling also confirmed that non-domiciled residents, who have been in the UK for more than seven years, would have to pay a £30,000 charge to "maintain the right to be taxed differently".

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