This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/7741397.stm
The article has changed 14 times. There is an RSS feed of changes available.
| Version 11 | Version 12 |
|---|---|
| Economy boost may mean pain later | Economy boost may mean pain later |
| (about 9 hours later) | |
| The government is preparing to confirm that a huge and unplanned rise in government borrowing will have to be paid back in the years to come. | The government is preparing to confirm that a huge and unplanned rise in government borrowing will have to be paid back in the years to come. |
| It comes as the chancellor is expected to announce spending rises and tax cuts in his Pre-Budget report on Monday. | |
| "The chancellor has to tell the country how far we've gone into the red," said BBC political editor Nick Robinson. | |
| BBC Business Editor Robert Peston said the chancellor will also have to say how the money will be paid back. | |
| Mr Robinson said: "Next week the chancellor has to tell the country how far we've gone into the red. He's preparing to reveal that we'll soon be borrowing over £100bn - that's 11 noughts at the end. | |
| Harsh truths | Harsh truths |
| "A collapse in the tax the government receives from house sales and from the City of London means we're heading for an annual overdraft worth one twelfth of the country's annual income - a figure that will raise a few eye brows. | "A collapse in the tax the government receives from house sales and from the City of London means we're heading for an annual overdraft worth one twelfth of the country's annual income - a figure that will raise a few eye brows. |
| "It's not been seen since Denis Healey was chancellor - back in the 1970s - the last time Labour were in power." | |
| BBC Business Editor Robert Peston said in his blog the chancellor will have to announce deferred tax rises and cuts in public spending, "to kick in when the economy has recovered a bit," perhaps in 2010 or 2011 - the year after the latest date of the next general election. | BBC Business Editor Robert Peston said in his blog the chancellor will have to announce deferred tax rises and cuts in public spending, "to kick in when the economy has recovered a bit," perhaps in 2010 or 2011 - the year after the latest date of the next general election. |
| If you don't act now and fiscal action is what we are talking about - whether it's public investment or whether it's in taxation - we will pay for it later Gordon Brown Analysis: Crunch time for DarlingNick Robinson's blogRobert Peston's blog | If you don't act now and fiscal action is what we are talking about - whether it's public investment or whether it's in taxation - we will pay for it later Gordon Brown Analysis: Crunch time for DarlingNick Robinson's blogRobert Peston's blog |
| Mr Peston said in his blog: "I am certain that on Monday the chancellor will also announce a significant package of measures to stimulate the economy. | Mr Peston said in his blog: "I am certain that on Monday the chancellor will also announce a significant package of measures to stimulate the economy. |
| "These will include tax cuts and spending increases funded by extra borrowing, equivalent perhaps to as much as 2% of GDP. | "These will include tax cuts and spending increases funded by extra borrowing, equivalent perhaps to as much as 2% of GDP. |
| "And the bulk of the tax cuts will be directed at those on lowest incomes, partly because they have the highest propensity to spend - for the good of the economy - and also for reasons of social justice." | "And the bulk of the tax cuts will be directed at those on lowest incomes, partly because they have the highest propensity to spend - for the good of the economy - and also for reasons of social justice." |
| The Tories have warned against tax cuts now leading to a "tax bombshell" later. | The Tories have warned against tax cuts now leading to a "tax bombshell" later. |
| Experts have suggested failing to announce debt-reduction measures could lead to a damaging rise in government borrowing costs and a run on the pound, of the kind shadow chancellor George Osborne has been warning about. | Experts have suggested failing to announce debt-reduction measures could lead to a damaging rise in government borrowing costs and a run on the pound, of the kind shadow chancellor George Osborne has been warning about. |
| The BBC understands Mr Darling will have to borrow massively over the next two years - equivalent to at least 8% of GDP, which adds up to more than £110bn per year. | The BBC understands Mr Darling will have to borrow massively over the next two years - equivalent to at least 8% of GDP, which adds up to more than £110bn per year. |
| Election speculation | Election speculation |
| Mr Darling is also expected to unveil help for small businesses hit by the credit crunch and is reportedly "infuriated" by the banks' apparent refusal to free up credit despite receiving a £37bn bailout. | Mr Darling is also expected to unveil help for small businesses hit by the credit crunch and is reportedly "infuriated" by the banks' apparent refusal to free up credit despite receiving a £37bn bailout. |
| According to stories in the Daily Mail and the Daily Telegraph, he is preparing to underwrite small business loans in his pre-Budget report and may also legislate to make the banks start lending again. | According to stories in the Daily Mail and the Daily Telegraph, he is preparing to underwrite small business loans in his pre-Budget report and may also legislate to make the banks start lending again. |
| Downing Street refused to rule out such a move, but the prime minister's official spokesman declined to comment on the contents of the pre-Budget report, beyond saying it would include "help for small businesses to get them through this difficult period". | Downing Street refused to rule out such a move, but the prime minister's official spokesman declined to comment on the contents of the pre-Budget report, beyond saying it would include "help for small businesses to get them through this difficult period". |
| He said both Mr Darling and Mr Brown were determined to see banks and building societies fulfilling their commitments to lend to small businesses. He said the government wanted to work constructively with the banks and were "in dialogue" with them. | He said both Mr Darling and Mr Brown were determined to see banks and building societies fulfilling their commitments to lend to small businesses. He said the government wanted to work constructively with the banks and were "in dialogue" with them. |
| BBC's Nick Robinson and Hugh Pym discuss likely measures in the PBR | BBC's Nick Robinson and Hugh Pym discuss likely measures in the PBR |
| Speaking earlier Gordon Brown said: "If you don't act now and fiscal action is what we are talking about - whether it's public investment or whether it's in taxation - we will pay for it later. You've got to act now so we avoid a worse problem." | Speaking earlier Gordon Brown said: "If you don't act now and fiscal action is what we are talking about - whether it's public investment or whether it's in taxation - we will pay for it later. You've got to act now so we avoid a worse problem." |
| Shadow Chancellor George Osborne has said a Conservative government would step in to guarantee loans made by banks and would even loan money directly to businesses as a "radical" last resort. | Shadow Chancellor George Osborne has said a Conservative government would step in to guarantee loans made by banks and would even loan money directly to businesses as a "radical" last resort. |
| The Liberal Democrats have also said the government should lend directly to businesses, through the Post Office, local authorities or even by creating an entirely new government-owned bank. | The Liberal Democrats have also said the government should lend directly to businesses, through the Post Office, local authorities or even by creating an entirely new government-owned bank. |
| What would you like to see from the pre-Budget report? Send us your views and experiences using the form below: | What would you like to see from the pre-Budget report? Send us your views and experiences using the form below: |