This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't 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/politics/10371590.stm

The article has changed 24 times. There is an RSS feed of changes available.

Version 10 Version 11
Tough measures expected in Budget Tough measures expected in Budget
(40 minutes later)
The Budget is likely to prove a crucial moment for the governmentThe Budget is likely to prove a crucial moment for the government
The toughest package of tax increases and spending cuts in a generation is expected to be unveiled by Chancellor George Osborne in his first Budget.The toughest package of tax increases and spending cuts in a generation is expected to be unveiled by Chancellor George Osborne in his first Budget.
He will say the measures - designed to tackle Britain's record deficit of £155bn - will be based on fairness, with the better-off paying more.He will say the measures - designed to tackle Britain's record deficit of £155bn - will be based on fairness, with the better-off paying more.
Middle class benefits and public sector pay may be hit but 900,000 low earners will be taken out of the tax system.Middle class benefits and public sector pay may be hit but 900,000 low earners will be taken out of the tax system.
Labour say the poorest will be hit and say the cuts are ideologically driven.Labour say the poorest will be hit and say the cuts are ideologically driven.
They say the economy is too weak to withstand such a spending squeeze and the move could push the UK back into recession.They say the economy is too weak to withstand such a spending squeeze and the move could push the UK back into recession.
The point at which people start paying tax will rise by £1,000 to £7,475 taking nearly 900,000 people out of the tax system.The point at which people start paying tax will rise by £1,000 to £7,475 taking nearly 900,000 people out of the tax system.
Mr Osborne will deliver the coalition government's first Budget at 1230 BST (1130 GMT), fulfilling the Conservatives' pre-election pledge to hold a Budget within 50 days of coming to office.Mr Osborne will deliver the coalition government's first Budget at 1230 BST (1130 GMT), fulfilling the Conservatives' pre-election pledge to hold a Budget within 50 days of coming to office.
Cigarettes and alcohol
Mr Osborne has said the Budget will set out necessary plans to bring down borrowing over the next four years and how this will be divided up between spending cuts and tax rises.Mr Osborne has said the Budget will set out necessary plans to bring down borrowing over the next four years and how this will be divided up between spending cuts and tax rises.
The government says borrowing levels inherited from Labour - which are set to total £155bn this year - are unsustainable and delaying action will damage market confidence in the UK and store up worse financial problems for the future.The government says borrowing levels inherited from Labour - which are set to total £155bn this year - are unsustainable and delaying action will damage market confidence in the UK and store up worse financial problems for the future.
The chancellor is expected to announce a number of revenue-raising measures, including a levy on bank profits, an increase in capital gains tax and rises in cigarette and alcohol duties while a change in aviation tax is also expected.The chancellor is expected to announce a number of revenue-raising measures, including a levy on bank profits, an increase in capital gains tax and rises in cigarette and alcohol duties while a change in aviation tax is also expected.
Politics, like comedy, is all about timing. And the calculation in Team Osborne is that now is the time to inflict maximum pain. Why? Well, when is there ever going to be an easier time to dispense hair shirts to all and sundry.Politics, like comedy, is all about timing. And the calculation in Team Osborne is that now is the time to inflict maximum pain. Why? Well, when is there ever going to be an easier time to dispense hair shirts to all and sundry.
The public is braced, the markets are ready, the Opposition is in disarray and the new coalition government still has a favourable media wind behind it. It's a message rammed home to Mr Osborne by former Tory chancellors.The public is braced, the markets are ready, the Opposition is in disarray and the new coalition government still has a favourable media wind behind it. It's a message rammed home to Mr Osborne by former Tory chancellors.
History would suggest that inflicting the pain early is always a favoured tactic. Mrs Thatcher did it in 1979 with a doubling of VAT within months of her election victory. And Norman Lamont also hiked taxes straight after John Major's triumph in 1992.History would suggest that inflicting the pain early is always a favoured tactic. Mrs Thatcher did it in 1979 with a doubling of VAT within months of her election victory. And Norman Lamont also hiked taxes straight after John Major's triumph in 1992.
It's also a simple fact that all governments want to get the pain over long before they have to go back to the voters in four or five years. So today should be as bad as its going to get. Hopefully.It's also a simple fact that all governments want to get the pain over long before they have to go back to the voters in four or five years. So today should be as bad as its going to get. Hopefully.
Peston: The biggest Budget Flanders: A game changer? Send us your commentsPeston: The biggest Budget Flanders: A game changer? Send us your comments
But opposition, unions and employer groups have all expressed concerns about the steps being planned amid continuing speculation of a rise in VAT and a freeze on public sector pay beyond the one-year already planned in 2011-2012.But opposition, unions and employer groups have all expressed concerns about the steps being planned amid continuing speculation of a rise in VAT and a freeze on public sector pay beyond the one-year already planned in 2011-2012.
A Labour Party spokesperson said: "The real test for the Budget is what it means for jobs and growth. Acting Labour leader Harriet Harman said her party's biggest concern was about jobs.
"Of course no-one's going to object to an increased personal allowance. "People shouldn't be thrown out of work as a result of this Budget. Because if that happens it is not only very unfair on the individual... but it also costs the public purse more and in the end will lead to higher tax increases."
"But if it's paid for by a VAT rise the Tories said they wouldn't implement, and that the Liberals campaigned against, the public will rightly feel short changed." She added: "We do need to get the deficit down, but it mustn't be brought down in a way that pushes the economy back into recession and which costs jobs, because if that happens that will make the deficit worse."
The BBC's Political Editor Nick Robinson said the government's plans to raise personal tax allowances would take an estimated 880,000 people out of the tax system and also give millions of basic rate taxpayers a tax cut of £200 per year.The BBC's Political Editor Nick Robinson said the government's plans to raise personal tax allowances would take an estimated 880,000 people out of the tax system and also give millions of basic rate taxpayers a tax cut of £200 per year.
The plan is the first step towards a key Lib Dem coalition demand of taking all those earning less than £10,000 out of tax.The plan is the first step towards a key Lib Dem coalition demand of taking all those earning less than £10,000 out of tax.
The chancellor must find £3.5bn to pay for the giveaway - which will be clawed back from top rate taxpayers - and Labour are likely to argue it is irresponsible in the current climate.The chancellor must find £3.5bn to pay for the giveaway - which will be clawed back from top rate taxpayers - and Labour are likely to argue it is irresponsible in the current climate.
Nick Robinson said it would be clear from the chancellor's statement that overall, people in all income groups would pay more as a result of other tax rises, spending and benefit cuts and limits to public sector pay and pensions.Nick Robinson said it would be clear from the chancellor's statement that overall, people in all income groups would pay more as a result of other tax rises, spending and benefit cuts and limits to public sector pay and pensions.
He said it was "far from certain" VAT will rise from its current 17.5%.He said it was "far from certain" VAT will rise from its current 17.5%.
'Fiscal bombshell''Fiscal bombshell'
In an e-mail to Lib Dem members on Monday evening, Deputy Prime Minister Nick Clegg said the budget deficit amounted to a "fiscal bombshell" that had to be dealt with.In an e-mail to Lib Dem members on Monday evening, Deputy Prime Minister Nick Clegg said the budget deficit amounted to a "fiscal bombshell" that had to be dealt with.
"Without action on the deficit, we will carry on racking up unaffordable debts our children will have to pay off," he said.
"We will carry on spending more money on debt interest than we do on our schools.
"And we will undermine the economic growth needed to create jobs and opportunities for all of us. There is nothing fair, liberal or progressive about any of that."
He rejected claims that the Liberal Democrats had "sold out" after they campaigned during the election against early spending cuts due to the fragility of the economic recovery.He rejected claims that the Liberal Democrats had "sold out" after they campaigned during the election against early spending cuts due to the fragility of the economic recovery.
"We have always argued that cuts would be necessary, but the timing should be based on economic circumstances, not political dogma," he said. "The economic situation today means that time has come.""We have always argued that cuts would be necessary, but the timing should be based on economic circumstances, not political dogma," he said. "The economic situation today means that time has come."
'Hardest thing''Hardest thing'
Mr Clegg said the economic situation in Europe had deteriorated in recent months while Labour had exacerbated the situation by making a large number of unfunded spending promises in its last few months. He added: "We have taken the difficult decisions with care, and with fairness at their heart. You will see the stamp of our Liberal Democrat values in [the] Budget. But nonetheless, it will be controversial.
"So cuts must come," he added. "We have taken the difficult decisions with care, and with fairness at their heart. You will see the stamp of our Liberal Democrat values in [the] Budget. But nonetheless, it will be controversial.
"This is one of the hardest things we will ever have to do, but I assure you, the alternative is worse: rising debts, higher interest rates, less growth and fewer opportunities.""This is one of the hardest things we will ever have to do, but I assure you, the alternative is worse: rising debts, higher interest rates, less growth and fewer opportunities."
Other measures widely forecast to be included in the Budget include a cut in the headline rate of corporation tax, a two-year freeze in council tax and the scrapping of Labour's planned 1% rise in National Insurance contributions paid by employers.Other measures widely forecast to be included in the Budget include a cut in the headline rate of corporation tax, a two-year freeze in council tax and the scrapping of Labour's planned 1% rise in National Insurance contributions paid by employers.
Unions have said any tax rises must fall predominately on the better-off, while business groups have called for radical reform of public services to avoid across-the-board tax increases.Unions have said any tax rises must fall predominately on the better-off, while business groups have called for radical reform of public services to avoid across-the-board tax increases.
"This needs to be a bold and ambitious Budget, with a credible pathway for restoring sound public finances and a convincing narrative for growth," the CBI's deputy director general John Cridland said."This needs to be a bold and ambitious Budget, with a credible pathway for restoring sound public finances and a convincing narrative for growth," the CBI's deputy director general John Cridland said.
What do you want to see from the Budget? How do you think it will affect you? You can send us your comments using the form below.What do you want to see from the Budget? How do you think it will affect you? You can send us your comments using the form below.