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Labour 'will get recovery right' Labour 'will get recovery right'
(20 minutes later)
Chancellor Alistair Darling has said Labour made the "right calls" during the financial crisis and will make the right choices again to secure recovery.Chancellor Alistair Darling has said Labour made the "right calls" during the financial crisis and will make the right choices again to secure recovery.
In his final Budget before a general election, he is setting out the case for five more years of Labour.In his final Budget before a general election, he is setting out the case for five more years of Labour.
He has said it will not be a giveaway Budget but stamp duty up to £250,000 for first time buyers will be axed. He announced an end to stamp duty on homes up to £250,000 for first time buyers - paid for by a rise from 4% to 5% in stamp duty on homes over £1m.
The Tories say Labour has "run out of steam". The Lib Dems urged more honesty on the scale of cuts needed. He has also revised down his economic growth forecasts slightly.
The chancellor forecast the economy will grow by between 1% and 1.5% this year and between 3% and 3.5% in 2011. His forecast for the following years is unchanged.
EXPECTED ANNOUNCEMENTS Deficit not as big as predictedFirst time buyers stamp duty cutPlanned petrol duty rise staggeredForce state banks to lend moreCrackdown on tax evasionStrong cider and alcopop tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key points The politics of the Budget
He revealed that the £2bn proceeds of a bank bonus tax is more than three times what the Treasury forecast in his pre-Budget report.
And he said more countries now agree on the need for an international systemic tax on banks which he will urge international finance ministers to bring in at a US gathering next month.
He extended a six month job or training guarantee for under 24-year-olds to March 2012.
He also unveiled a guarantee to give everyone a basic bank account, giving up to a million more people access to bank accounts over the next five years.
Mr Darling said his Budget would use existing funds to boost growth and jobs and bring down the deficit.Mr Darling said his Budget would use existing funds to boost growth and jobs and bring down the deficit.
"The challenge now is to bring down borrowing in a way that does not damage the recovery or frontline services people rely on," he told MPs."The challenge now is to bring down borrowing in a way that does not damage the recovery or frontline services people rely on," he told MPs.
EXPECTED ANNOUNCEMENTS Deficit not as big as predictedFirst time buyers stamp duty cutPlanned petrol duty rise staggeredForce state banks to lend moreCrackdown on tax evasionStrong cider and alcopop tax hikeGrowth package to boost jobsBank accounts for all citizensGreen investment fund Live: Text and video At-a-glance: The key points The politics of the Budget
During heated exchanges between the party leaders at prime minister's questions ahead of the Budget, Mr Cameron accused Gordon Brown of a series of mistakes over the economy.
But Mr Brown said the Tories had got every key decision during the financial crisis and recession wrong.
Mr Brown said the Budget would show Labour had a vision for the future focused on creating jobs and promoting growth.
Some of the more controversial measures in the Budget may not make it into law before polling day, which could be just six weeks away.Some of the more controversial measures in the Budget may not make it into law before polling day, which could be just six weeks away.
A planned cut in stamp duty would stay in place whoever wins the election, as it is similar to existing Tory policy. But the planned cut in stamp duty would stay in place whoever wins the election, as it is similar to existing Tory policy.
Mr Darling is also expected to significantly increase the duty on strong ciders and alcopops - another Conservative policy - after ruling out a minimum price for alcohol. Other alcohol duties are expected to rise too.Mr Darling is also expected to significantly increase the duty on strong ciders and alcopops - another Conservative policy - after ruling out a minimum price for alcohol. Other alcohol duties are expected to rise too.
If the Conservatives win the election they will produce an "emergency Budget" within 50 days of taking office which could reverse many of Mr Darling's other measures.If the Conservatives win the election they will produce an "emergency Budget" within 50 days of taking office which could reverse many of Mr Darling's other measures.
The chancellor is not expected to unveil any new tax increases, with the new 50% top rate of income tax expected to come into force on 1 April.The chancellor is not expected to unveil any new tax increases, with the new 50% top rate of income tax expected to come into force on 1 April.
Public spendingPublic spending
He is also not likely to unveil the full extent of spending cuts needed if Labour is going to stick to its pledge to halve the Budget deficit in four years, with a comprehensive spending review delayed until after the election.He is also not likely to unveil the full extent of spending cuts needed if Labour is going to stick to its pledge to halve the Budget deficit in four years, with a comprehensive spending review delayed until after the election.
But he could set out more details of where the government expects to make £11bn of public sector efficiency savings by 2012/13.But he could set out more details of where the government expects to make £11bn of public sector efficiency savings by 2012/13.
Latest figures suggest that government borrowing for 2009-10 - which had been predicted to reach £178bn - might be nearer £170bn, largely due to a lower-than-expected bill for unemployment.Latest figures suggest that government borrowing for 2009-10 - which had been predicted to reach £178bn - might be nearer £170bn, largely due to a lower-than-expected bill for unemployment.
The BBC's chief economics correspondent Hugh Pym said the financial markets - which have to fund the government's borrowing - will not be impressed if Mr Darling does not reduce the deficit as much as he can.The BBC's chief economics correspondent Hugh Pym said the financial markets - which have to fund the government's borrowing - will not be impressed if Mr Darling does not reduce the deficit as much as he can.
The chancellor is expected to outline plans to boost future economic growth, with billions invested in digital jobs, broadband for all, high-speed rail and biotech industries, using money from existing budgets.The chancellor is expected to outline plans to boost future economic growth, with billions invested in digital jobs, broadband for all, high-speed rail and biotech industries, using money from existing budgets.
Mr Darling is expected to say: "This will be a budget to secure the recovery, tackle borrowing and invest in our industrial future.Mr Darling is expected to say: "This will be a budget to secure the recovery, tackle borrowing and invest in our industrial future.
"At its heart is a growth package to help small business, promote innovation, invest in national infrastructure and key skills."At its heart is a growth package to help small business, promote innovation, invest in national infrastructure and key skills.
"This package will be partially paid for by switching spending from within existing allocations.""This package will be partially paid for by switching spending from within existing allocations."
'Sensible''Sensible'
Other predictions for the Budget include moves to force state-owned banks to increase lending by more than £80bn, a crackdown on tax evasion by wealthy investors, measures to force banks to offer all citizens a bank account and a green investment fund to finance projects such as wind farms and renewable energy.Other predictions for the Budget include moves to force state-owned banks to increase lending by more than £80bn, a crackdown on tax evasion by wealthy investors, measures to force banks to offer all citizens a bank account and a green investment fund to finance projects such as wind farms and renewable energy.
There has also been speculation that Mr Darling might choose to provide extra help for young unemployed people.There has also been speculation that Mr Darling might choose to provide extra help for young unemployed people.
Where are the famous red boxes made?Where are the famous red boxes made?
The chancellor told the BBC at the weekend there would be no "giveaways" and people wanted "a sensible, workmanlike Budget". He also said a rise in VAT was "not on the table".
Labour and the Conservatives have clashed over when the government should start reducing spending to tackle the budget deficit, which is among the highest in Europe and is expected to hit about 12.6% of GDP this financial year - well above the EU target of 3%.Labour and the Conservatives have clashed over when the government should start reducing spending to tackle the budget deficit, which is among the highest in Europe and is expected to hit about 12.6% of GDP this financial year - well above the EU target of 3%.
Last week the European Commission criticised the government's plans to halve the deficit in four years, saying they were not ambitious enough.Last week the European Commission criticised the government's plans to halve the deficit in four years, saying they were not ambitious enough.
Conservative leader David Cameron has called on the government to scrap its plans to increase public spending this year and warned that without prompt action to tackle the deficit, Britain risks entering the "danger zone" of rising interest rates and falling confidence on the money markets.Conservative leader David Cameron has called on the government to scrap its plans to increase public spending this year and warned that without prompt action to tackle the deficit, Britain risks entering the "danger zone" of rising interest rates and falling confidence on the money markets.
He said: "The choice is between a government which has completely run out of steam, completely run out of ideas, is not being honest about the mess we're in and has got no plans to clear it up, and a Conservative Party that's got the energy, the dynamism, the leadership to get the economy moving again.He said: "The choice is between a government which has completely run out of steam, completely run out of ideas, is not being honest about the mess we're in and has got no plans to clear it up, and a Conservative Party that's got the energy, the dynamism, the leadership to get the economy moving again.
"That's what we need, is to get this economy growing, get things going again. And that's what our Budget will do straight after the election.""That's what we need, is to get this economy growing, get things going again. And that's what our Budget will do straight after the election."
Lib Dem Treasury spokesman Vince Cable told the BBC on Tuesday: "One of the key tests of the government tomorrow is whether they are willing to be specific, willing to be open about what they are going to cut."Lib Dem Treasury spokesman Vince Cable told the BBC on Tuesday: "One of the key tests of the government tomorrow is whether they are willing to be specific, willing to be open about what they are going to cut."
Meanwhile, the Public and Commercial Services union will stage their first Budget day strike - union members are expected to mount picket lines outside the Treasury, Downing Street and Parliament in a row over redundancy pay.Meanwhile, the Public and Commercial Services union will stage their first Budget day strike - union members are expected to mount picket lines outside the Treasury, Downing Street and Parliament in a row over redundancy pay.
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