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LIVE: Pre-Budget report LIVE: Pre-Budget report
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By Victoria King 1249 Mr Darling confirms that the basic state pension will rise by 2.5% in 2010. But the BBC economics editor Stephanie Flanders points out that at the moment he is talking about spending money he knows he doesn't have, so the other side of the coin - the cutbacks and taxes - must be coming soon. By Victoria King 1258 Despite the unfavourable reaction in the House, BBC economics editor Stephanie Flanders says it is impressive that the scale of borrowing has not increased much further given the turbulence of the economy.
Darling is all talk and no trousers. What about a little humility after leading the country into the worst recession in 60 years under Gordon Brown's mantra of "no more boom & bust"?Tom, London
James Landale writes: Mr Darling says he wants to cut the budget deficit in half over four years "in an orderly way". This is the nub of his argument. He says this "is a sensible timetable" that will not threaten recovery. In other words, the Tories would cut too quickly and too early. We are about to get some examples of how the government will cut some spending, but this will just be a little flesh on the bones of an existing policy.
1254 Mr Darling says his timetable for cutting the budget deficit by half over four years is "sensible", but admits that this year's borrowing will be higher than expected - £178bn rather than £175bn. It will also be £3bn higher in 2010/11 than previously forecast.
MAIN POINTS SO FAR: Economy predicted to shrink by 4.75% this year. Public borrowing for 2009 to be £178bn. VAT to revert to 17.5% on 1 January. Bingo duty to fall from 22% to 20% in April. The 1p rise in corporation tax to be postponed. Basic state pension to rise by 2.5% next year.
1251 As expected, the chancellor confirms that the UK economy will shrink by 4.75% this year, but predicts it will grow by between 1% and 1.5% during 2010. As he refers to "the strength of our economy" there are laughs from the opposition benches.
1249 Mr Darling confirms that the basic state pension will rise by 2.5% in 2010. But the BBC economics editor Stephanie Flanders points out that at the moment he is talking about spending money he knows he doesn't have, so the other side of the coin - the cutbacks and taxes - must be coming soon.
1246 We'd been expecting youth unemployment to come up and here it is - the education or training guarantee for 16 and 17-year-olds is to be extended for a further year. Anyone under 24 will also be guaranteed training or employment after six months out of work.1246 We'd been expecting youth unemployment to come up and here it is - the education or training guarantee for 16 and 17-year-olds is to be extended for a further year. Anyone under 24 will also be guaranteed training or employment after six months out of work.
James Landale writes: Mr Darling is outlining lots of measures to support the economy - deferred tax rises for small businesses, help to avoid house repossessions. Even Treasury insiders accept that these plans are modest and do not involve large sums of money.James Landale writes: Mr Darling is outlining lots of measures to support the economy - deferred tax rises for small businesses, help to avoid house repossessions. Even Treasury insiders accept that these plans are modest and do not involve large sums of money.
1244 "No government can prevent every job loss," Mr Darling says, but he insists that Labour's record is better than that of governments in many other countries. A short spell out of work is not turning into a lifetime on benefits - as under previous Tory administrations, he adds.1244 "No government can prevent every job loss," Mr Darling says, but he insists that Labour's record is better than that of governments in many other countries. A short spell out of work is not turning into a lifetime on benefits - as under previous Tory administrations, he adds.
James Landale writes: Alistair Darling's first theme is familiar stuff - Labour, he claims, has been right to stimulate the shrinking economy with expensive tax cuts and spending increases. What he makes less clear is that that stimulus is about to end; the money simply isn't there to do it. The political debate now is when to cut spending and by how much, not whether to keep stimulating. Note too that VAT will return to 17.5% in January - a regressive tax rise that hits the poorest hardest.James Landale writes: Alistair Darling's first theme is familiar stuff - Labour, he claims, has been right to stimulate the shrinking economy with expensive tax cuts and spending increases. What he makes less clear is that that stimulus is about to end; the money simply isn't there to do it. The political debate now is when to cut spending and by how much, not whether to keep stimulating. Note too that VAT will return to 17.5% in January - a regressive tax rise that hits the poorest hardest.
1241 Confirmation too that the 1p rise in corporation tax is being postponed.1241 Confirmation too that the 1p rise in corporation tax is being postponed.
1240 The chancellor confirms that VAT is going back up on 1 January to 17.5%, but says he has no other announcements on VAT. This may surprise some commentators who had suspected it could go up further in the not too distant future.1240 The chancellor confirms that VAT is going back up on 1 January to 17.5%, but says he has no other announcements on VAT. This may surprise some commentators who had suspected it could go up further in the not too distant future.
1239 Mr Darling says he is confident that growth will return this quarter, but recent problems in Dubai show just how fragile economies around the world still are.1239 Mr Darling says he is confident that growth will return this quarter, but recent problems in Dubai show just how fragile economies around the world still are.
BBC deputy political editor James Landale writes: Never let is be said that Alistair Darling beats around the bush when it comes to politics. His opening remarks make it very clear that he intends this pre-Budget report to set out "two competing visions" for the future economy. In other words, vote Labour at the next election for economic growth, vote Tory to risk the recovery.BBC deputy political editor James Landale writes: Never let is be said that Alistair Darling beats around the bush when it comes to politics. His opening remarks make it very clear that he intends this pre-Budget report to set out "two competing visions" for the future economy. In other words, vote Labour at the next election for economic growth, vote Tory to risk the recovery.
1236 Now Alistair Darling takes centre stage. He says the choice is between going for growth and trying to slash the deficit too quickly. It's a choice between two competing political plans - and two parties. Within the first couple of minutes, he uses that word "fair" again.1236 Now Alistair Darling takes centre stage. He says the choice is between going for growth and trying to slash the deficit too quickly. It's a choice between two competing political plans - and two parties. Within the first couple of minutes, he uses that word "fair" again.
1235 Adam Holloway, Conservative gets a withering tone from the PM when he criticises Britain's response to the economic crisis. Mr Brown says his approach is the right one - a remark met with a shake of the head from David Cameron.1235 Adam Holloway, Conservative gets a withering tone from the PM when he criticises Britain's response to the economic crisis. Mr Brown says his approach is the right one - a remark met with a shake of the head from David Cameron.
1232 Labour's Jeff Ennis is pleased about an American bed-spring company that has set up in his Barnsley constituency. Mr Brown says this is a good example of the sort of thing the chancellor is encouraging in order to get the country out of recession.1232 Labour's Jeff Ennis is pleased about an American bed-spring company that has set up in his Barnsley constituency. Mr Brown says this is a good example of the sort of thing the chancellor is encouraging in order to get the country out of recession.
PMQS has become a joke. Brown never answers a question and is allowed by yet another Speaker to get away with it. The rest of it is taken up by pre-loaded questions followed by a Labour Party political broadcast - a very well rehearsed one at that. Does this PM think we are all stupid?Jon, GloucesterPMQS has become a joke. Brown never answers a question and is allowed by yet another Speaker to get away with it. The rest of it is taken up by pre-loaded questions followed by a Labour Party political broadcast - a very well rehearsed one at that. Does this PM think we are all stupid?Jon, Gloucester
1228 Labour's Derek Twigg asks about efforts to encourage renewable energy. The PM insists Britain will lead the way on cutting carbon emissions. He says wind power will be important, but plans have been turned down around the country by Tory councils. Finishing the answer with a (pre-prepared?) barb, the PM says the Conservatives are "all wind and no turbine".1228 Labour's Derek Twigg asks about efforts to encourage renewable energy. The PM insists Britain will lead the way on cutting carbon emissions. He says wind power will be important, but plans have been turned down around the country by Tory councils. Finishing the answer with a (pre-prepared?) barb, the PM says the Conservatives are "all wind and no turbine".
I think the 50% tax for bank bonuses is a great idea. Banks should learn that we are all struggling and being bailed out by the government isn't an excuse to give themselves big bonuses again.Deb, BristolI think the 50% tax for bank bonuses is a great idea. Banks should learn that we are all struggling and being bailed out by the government isn't an excuse to give themselves big bonuses again.Deb, Bristol
1225 Labour's Lindsay Roy asks about the future of child tax credits. The PM says they have lifted 500,000 children out of poverty and he would regret very much any decision by a party to cut them - that party being the Tories. He says Mr Cameron wants to "hurt the many and help the few".1225 Labour's Lindsay Roy asks about the future of child tax credits. The PM says they have lifted 500,000 children out of poverty and he would regret very much any decision by a party to cut them - that party being the Tories. He says Mr Cameron wants to "hurt the many and help the few".
1220 Lib Dem leader Nick Clegg gets angry after his efforts to discuss the issue of child poverty are met with loud jeers from Labour backbenchers. "You can shout as much as you like," he says, "But it doesn't change the facts." Mr Brown comes back with a list of improvements he says the government has made, including Sure Start and child tax credits.1220 Lib Dem leader Nick Clegg gets angry after his efforts to discuss the issue of child poverty are met with loud jeers from Labour backbenchers. "You can shout as much as you like," he says, "But it doesn't change the facts." Mr Brown comes back with a list of improvements he says the government has made, including Sure Start and child tax credits.
1219 A question comes about Tory parliamentary candidate Zac Goldsmith who has been found to have non-domicile tax status. The PM says this proves the Conservatives favour the rich and are the only party in history "to have come up with a tax policy just for themselves".1219 A question comes about Tory parliamentary candidate Zac Goldsmith who has been found to have non-domicile tax status. The PM says this proves the Conservatives favour the rich and are the only party in history "to have come up with a tax policy just for themselves".
1217 Mr Cameron asks whether the PM will support a 5% cut in ministerial pay and a 10% cut in the size of the Commons. The PM ignores those suggestions and attacks the Tories' economic policy instead. He says the Tory leader has "lost the art of communication, but not the power of speech".1217 Mr Cameron asks whether the PM will support a 5% cut in ministerial pay and a 10% cut in the size of the Commons. The PM ignores those suggestions and attacks the Tories' economic policy instead. He says the Tory leader has "lost the art of communication, but not the power of speech".
positivematt tweets: This Tory is cringing. What's happened to Dynamo Dave? He's making Gordon look a) like a leader and b) like he has a grip.positivematt tweets: This Tory is cringing. What's happened to Dynamo Dave? He's making Gordon look a) like a leader and b) like he has a grip.
1215 Mr Cameron changes tack to MPs' expenses. Giving full details of second home allowances is "a vital part of rebuilding trust in this place". He says he wants more thorough breakdowns of claims to be published. Mr Brown insists he has nothing to hide, but Mr Cameron comes back again, saying the issue is "profound". He is met with barracking from Labour backbenchers, who are then told to "simmer down" by the Speaker.1215 Mr Cameron changes tack to MPs' expenses. Giving full details of second home allowances is "a vital part of rebuilding trust in this place". He says he wants more thorough breakdowns of claims to be published. Mr Brown insists he has nothing to hide, but Mr Cameron comes back again, saying the issue is "profound". He is met with barracking from Labour backbenchers, who are then told to "simmer down" by the Speaker.
Though the tax rises on the well-off will grab the headlines, we should remember that when public services are inevitably cut, it is the less well-off who will suffer.Mr Rama, OxfordThough the tax rises on the well-off will grab the headlines, we should remember that when public services are inevitably cut, it is the less well-off who will suffer.Mr Rama, Oxford
1210 Mr Cameron says British forces are still spread too thinly in Helmand province, leaving them vulnerable in comparison to the Americans. In reply, the PM insists troops levels are being "thickened" and bolstered by Afghan personnel.1210 Mr Cameron says British forces are still spread too thinly in Helmand province, leaving them vulnerable in comparison to the Americans. In reply, the PM insists troops levels are being "thickened" and bolstered by Afghan personnel.
1207 Tory leader David Cameron also pays tribute to the 100th British casualty in Afghanistan. He says troops don't want sympathy and pity, they want support back home. He says we now have the last, best chance to end the campaign in the country successfully.1207 Tory leader David Cameron also pays tribute to the 100th British casualty in Afghanistan. He says troops don't want sympathy and pity, they want support back home. He says we now have the last, best chance to end the campaign in the country successfully.
In reply to Robert, Glos: Yes, it's about getting the net spend down primarily. At the minute we are spending much more than we are bringing in. Otherwise the debt will continue to get bigger. Debt is manageable, if your books are balanced, and the debt is not going up too much a year. The UK, per person, actually has one of the smaller debts in the G8. The issue is that we have the largest budget deficit to controlChris, BristolIn reply to Robert, Glos: Yes, it's about getting the net spend down primarily. At the minute we are spending much more than we are bringing in. Otherwise the debt will continue to get bigger. Debt is manageable, if your books are balanced, and the debt is not going up too much a year. The UK, per person, actually has one of the smaller debts in the G8. The issue is that we have the largest budget deficit to controlChris, Bristol
1203 To the Commons, and Mr Brown begins his Q&A session by paying tribute to the latest British casualty in Afghanistan - the 100th death this year.1203 To the Commons, and Mr Brown begins his Q&A session by paying tribute to the latest British casualty in Afghanistan - the 100th death this year.
1201 As PMQs is about to start, MP Michael Fallon restates the Tory message once again that efforts to cut the deficit must start now. Bashing the bankers will not make a huge amount of money, he says, adding that public sector finances are where real change is needed.1201 As PMQs is about to start, MP Michael Fallon restates the Tory message once again that efforts to cut the deficit must start now. Bashing the bankers will not make a huge amount of money, he says, adding that public sector finances are where real change is needed.
1200 Former home secretary Jacqui Smith introduces one of the words of the day - "fair". "Fair taxes", "fair cuts", all designed to contrast the government's plans with those of the Tories, which it, of course, feels are "unfair". She says Labour will make sure that "those will the broadest shoulders" bear the brunt.1200 Former home secretary Jacqui Smith introduces one of the words of the day - "fair". "Fair taxes", "fair cuts", all designed to contrast the government's plans with those of the Tories, which it, of course, feels are "unfair". She says Labour will make sure that "those will the broadest shoulders" bear the brunt.
I am an unemployed IT Manager. I am 48 and I have been trying to get a job since March. I would like to see a pre-Budget report aimed at getting me back in to work. I can't see anything aimed to do that. We have the government cutting the NHS IT scheme, banks doing nothing, public services looking to get cut. What can he do for me? Nothing. Carl Hammonds, Alsager, CheshireI am an unemployed IT Manager. I am 48 and I have been trying to get a job since March. I would like to see a pre-Budget report aimed at getting me back in to work. I can't see anything aimed to do that. We have the government cutting the NHS IT scheme, banks doing nothing, public services looking to get cut. What can he do for me? Nothing. Carl Hammonds, Alsager, Cheshire
1155 The BBC's Nick Robinson says there will have to be "eye-watering" cuts to government departmental budgets in the coming years. We're unlikely to hear much about the most painful ones though today, he says.1155 The BBC's Nick Robinson says there will have to be "eye-watering" cuts to government departmental budgets in the coming years. We're unlikely to hear much about the most painful ones though today, he says.
Can someone elaborate on the deficit and debt thing? Halving the deficit means halving the difference between income and expenditure - yes? The debt can remain the same whilst this is happening? And that is a good thing?Robert, GlosCan someone elaborate on the deficit and debt thing? Halving the deficit means halving the difference between income and expenditure - yes? The debt can remain the same whilst this is happening? And that is a good thing?Robert, Glos
1148 The BBC's Naga Munchetty is at CMC Markets in the City. Analyst James Hughes says people like him will focus on the chancellor's GDP projections and "just how wrong he was" with earlier forecasts. He also says there could be a brain drain from the financial sector if the bonuses are hit hard.1148 The BBC's Naga Munchetty is at CMC Markets in the City. Analyst James Hughes says people like him will focus on the chancellor's GDP projections and "just how wrong he was" with earlier forecasts. He also says there could be a brain drain from the financial sector if the bonuses are hit hard.
1144 He's out. The chancellor appears, clutching his pre-Budget report. There's a confident half-smile on his face, but is he as relaxed as he looks?1144 He's out. The chancellor appears, clutching his pre-Budget report. There's a confident half-smile on his face, but is he as relaxed as he looks?
1141 Gordon Brown has just left Downing Street bound for the Commons. Mr Darling, meanwhile, remains inside the Treasury - is he dotting some final Is and crossing some Ts?1141 Gordon Brown has just left Downing Street bound for the Commons. Mr Darling, meanwhile, remains inside the Treasury - is he dotting some final Is and crossing some Ts?
1138 BBC political editor Nick Robinson tells BBC Two's Daily Politics that he thinks a further rise in National Insurance is inevitable. Meanwhile, economics editor Stephanie Flanders says Mr Darling has to prove to the markets that he really is serious about getting the deficit down. She also says that the City won't like a speech that focuses more on higher taxes than spending cuts, because the former have a much shorter term impact on the economy.1138 BBC political editor Nick Robinson tells BBC Two's Daily Politics that he thinks a further rise in National Insurance is inevitable. Meanwhile, economics editor Stephanie Flanders says Mr Darling has to prove to the markets that he really is serious about getting the deficit down. She also says that the City won't like a speech that focuses more on higher taxes than spending cuts, because the former have a much shorter term impact on the economy.
1135 Scrapped your car already? Well, the BBC's John Pienaar says you'll soon be able to trade in your old boiler as well under a new scheme to be announced by Mr Darling. Also set for the scrap heap, our correspondent says, is the planned 1p rise in corporation tax - dreaded by nearly a million small businesses in the UK.1135 Scrapped your car already? Well, the BBC's John Pienaar says you'll soon be able to trade in your old boiler as well under a new scheme to be announced by Mr Darling. Also set for the scrap heap, our correspondent says, is the planned 1p rise in corporation tax - dreaded by nearly a million small businesses in the UK.
1133 We're also expecting announcements about cuts in government spending - balanced by much talk of protecting frontline health and education services. Going hand-in-hand with that will be tax rises - VAT back up to 17.5% and possibly even higher in the longer-term, and a potential hike in National Insurance.1133 We're also expecting announcements about cuts in government spending - balanced by much talk of protecting frontline health and education services. Going hand-in-hand with that will be tax rises - VAT back up to 17.5% and possibly even higher in the longer-term, and a potential hike in National Insurance.
1130 Looking a bit further ahead to the PBR itself, what do we know already? Well, top of the list will be more detail about a planned "supertax" on bankers' bonuses, something the government hopes will win it some brownie points with the public. The BBC's Robert Peston thinks any bonuses over £10,000 could be in line for a 50% levy.1130 Looking a bit further ahead to the PBR itself, what do we know already? Well, top of the list will be more detail about a planned "supertax" on bankers' bonuses, something the government hopes will win it some brownie points with the public. The BBC's Robert Peston thinks any bonuses over £10,000 could be in line for a 50% levy.
1129 Tributes will also be paid to the 100th British soldier to die in Afghanistan this year. And mention may be made of "Eton-gate" - the row over who in the Commons had the poshest education and whether or not it matters.1129 Tributes will also be paid to the 100th British soldier to die in Afghanistan this year. And mention may be made of "Eton-gate" - the row over who in the Commons had the poshest education and whether or not it matters.
1124 Coming as it does just before Mr Darling's big speech, we can safely expect PMQs to be dominated by talk of the economy. Gordon Brown will no doubt throw his support behind his chancellor, while the Tories are likely to say that whatever is planned will be too little too.1124 Coming as it does just before Mr Darling's big speech, we can safely expect PMQs to be dominated by talk of the economy. Gordon Brown will no doubt throw his support behind his chancellor, while the Tories are likely to say that whatever is planned will be too little too.
1122 Hello and welcome to our live coverage of prime minister's questions and more importantly, Chancellor Alistair Darling's pre-Budget report. My colleague, BBC deputy political editor James Landale, will be providing analysis throughout. And from BBC Two's Daily Politics, former home secretary Jacqui Smith, former Lib Dem leader Charles Kennedy and Michael Fallon, Tory deputy chairman of the Treasury Select Committee, will be adding their two-pence-worth.1122 Hello and welcome to our live coverage of prime minister's questions and more importantly, Chancellor Alistair Darling's pre-Budget report. My colleague, BBC deputy political editor James Landale, will be providing analysis throughout. And from BBC Two's Daily Politics, former home secretary Jacqui Smith, former Lib Dem leader Charles Kennedy and Michael Fallon, Tory deputy chairman of the Treasury Select Committee, will be adding their two-pence-worth.