"Put your trust in us and I will not let you down"

Perhaps today will be seen as the start of the election campaign.

Gordon tells his audience at Thomson Reuters in Canary Wharf that

Our opponents build their policy on political ideology. Ours is a policy built on the experience of economic history. That is why we have rejected from the outset the laissez faire approach that would have let the recession take its course - and it is why we are investing now in the industries of the future."

The message is essentially put your trust in us and I will not let you down adding that

we avoided adepression not by accident, but by design; by learning from the mistakes made and experience gained in previous recessions and making tough but necessary decisions.

At the same time framing the battle he announced that there will be pay freezes for doctors, dentists and hospital consultants as well as senior managers across most of the public sector.

At the same time confirming the budget will be on 24th March

Budget set and PM to tell us we are weathering the storm

We should finally have a budget date by the end of this morning.

It seens that the 24th March will be the date that Alistair Darling presents the last budget of this government to the country.

It will be the start of the election countdown.Parliament will debate the budget for the following week, before Gordon Brown is expected to ask for the dissolution of parliament for the election on the 6th May.

The Prime Minister meanwhile is expected to tell us today that whilst the recovery is fragile,by following Labour's plans,the country will be be best placed to tackle the recovery.

It is reported that he will say "We are weathering the storm; now is no time to turn back,"

Dark clouds over the budget

It is less than a week to the budget and the Indy's Hamish McRae introduces us to the grim realities of the future shape of budgets.

it will contain elements that next year the new government will have to incorporate into its own policies. We are going to get a glimpse of the future.

he writes

The harsh realities of the public sector finances will be laid bare.We will get realistc economic forecasts and most importantly when it comes to tax revenues

if you look at what has been happening for the past five or six years, revenue tended to come in below the level that the Treasury expected. Now it is collapsing. The reason for the collapse is that the boom had concealed the fact our tax system had become structurally much weaker than it was a decade or so ago. It has been over-dependent on types of revenue that could not be relied on. At a company level these included the corporation tax paid by banks and oil companies, and North Sea oil revenue itself. At a personal level these included tax on capital gains, on stamp duty on housing, and income tax on bonuses.
The consequence of this can only be a claw back in public spending.

It is surely time to batton down the hatches

Austerity on the way-look to Ireland

Staying on the subject of budgets, the Mail warns that Alistair Darling is preparing an austerity budget in two weeks time.

With drastically reduced Government revenues in the recession, the Chancellor may have to raise fresh taxes and cut back public spending.

reports the paper adding that

Treasury officials say Britain is in a 'V' shaped recession in which the downturn is unusually steep and no one knows where the bottom is.

Maybe it mightg be prudent to turn to Ireland which yesterday brought in its own austerity budget as an indicator of what the future might bring.

The country's second budget in six months saw large rises in taxes and severly slashed spending as the country fights to contain a burgeoning budget defecit as it forecasts an 8 per cent drop in growth this year

Guido make one good point tough comaring the two countrys.

Irish politicians rightly feel they need to share the pain - pensions for serving politicians are to be discontinued and allowable expenses cut by 10% across the board. The Irish President Mary McAleese has already announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan and his ministerial colleagues took a 10% wage cut last year. The opposition leader has instructed his party’s parliamentarians to take a 5% cut. The governor of the Irish Central Bank and Financial Services Authority has volunteered to also surrender 10% of pay. The state broadcaster RTÉ’s top six executives are taking a “significant reduction” in pay.

whereas ????????/

New beginnings

I have written before on this blog about the opportunities that this recession will provide for the country to re-examine its growth policies.

One area is green technology which was sadly overlooked by the G20.

The Prime Minister though attempts to put that right in an exclusive interview with the Indy this morning.

He tells the paper that he wants

to make Britain "a world leader" in producing and exporting electric cars, hybrid petrol-electric vehicles and lighter cars using less petrol.

and that the budget in two weeks tine will see the first signs of this process.The country he says

could increase its output of environmental goods and services by 50 per cent to £1.5bn in the next few years.

as he heralds that 400,000 jobs could be created.

We have though heard this before and one wonders how this sits alongside yesterday's decision to pump more money into an ailing car industry.

The paper's leading article is optimistic

Mr Brown is certainly right when he argues that Britain will need to find some way of creating jobs in a post-recession world in which the City, our dominant employer of late, will be much diminished. Furthermore, we will need to expand our renewable industry rapidly if we are to meet our EU target of producing 15 per cent of our energy from low carbon sources by 2020. There is plainly scope for growth in the labour-intensive green economy.

Will Darling delay the budget?

Alistair Darling during his appearance on Andrew Marr on Sunday morning appeared to intimate that he was in no rush to set the date for the budget.

His rational was that the pre budget statement contained enough fiscal maesures to tide the country over for the foreseeable future.

Some though suspect that something more sinister is afoot.

Notably that it was force the government's policies under the scrutinty of the Commons, something that was initially at least avoided before Xmas.

Over at First Post this morning,they also see the motive behind such a move

Whenever the Budget is presented, it will reveal a nightmare combination of soaring costs for unemployment benefit and falling receipts from a collapse in corporate taxes as more businesses go to the wall. Darling's hopes of returning to growth by the end of the year have been blown apart by the economic crisis. Like Micawber, Darling is hoping that "something will turn up" if he delays for a month.

adding that a

would also enable Darling to indulge in some creative accounting:

So perhaps then a June budet after the European elections?

Best bit of the budget debate

Some might say this was the best bit of the budget debate yesterday as David Cameron turns on Ed Balls in the chamber

Thanks to Guido for the clip

Paper are not complimentary to the Chancellor

The budget dominates the headlines today in the nationals.

The Times calls it the hangover Budget

Drinkers and drivers were hit in the pocket yesterday as Alistair Darling used them and a borrowing surge to try to steer Britain away from recession and through global financial storms.

The hesitant debutante says the Guardian

In what one City commentator called a Mother Hubbard package, Darling promised economic stability but offered little hope for Labour MPs that they could go into an election in either 2009 or 2010 with a credible offer of tax cuts, or extra public spending.

The Mail calls him the man with Rose tinted glasses

Alistair Darling took a major gamble yesterday on Britain sailing through a global crisis.
In his first Budget, the Chancellor presented a rose-tinted picture of the economy to disbelieving MPs.He foresaw steady long-term growth, despite City warnings

.

For the Telegraph,the Chancellor

Declares war on family cars

Motorists have been hit by punitive rises in taxes as Alistair Darling targeted the drivers of family cars with a new 'showroom tax'.The Chancellor announced plans that will mean owners of estate cars and people carriers could pay hundreds of pounds a year more to drive on the roads.

Don't drink and drive says the front page of the Sun

Killjoy Chancellor Alistair Darling clobbered drinkers with a SIX PER CENT tax hike on booze.
And he hammered motorists driving typical family saloons with new road tax bands, aimed at cutting carbon emissions.

The Independent on its front page describes

If you want to understand what is happening don't listen to the words; look instead at the numbers. The words were the same as in the previous 10 Budgets, but the person saying those words was different. It was almost as though the new Chancellor was reading out a speech written by his predecessor. Indeed I suspect in large measure that is what happened.

The Express picks up on a comment made in the Commons

SO WHAT!?'

Tory leader David Cameron accused them of imposing the heaviest tax burden in our history.
With a laugh and a shrug, Children’s Minister Ed Balls sniggeringly retorted: “So what?”
Mr Balls then grinned and widened his eyes into a wild stare as the Tory leader rounded on him in disgust, noting for all to hear: “So what, says the Minister for Children.”

Inside in the editorial columns,the Mirror sticks up for Mr Darling,Playing safe and sound saying that

he isn't a politician to take risks when the economy's heading for a rough patch.

and

if Britain emerges next year or the year after relatively unscathed, his Budget will have proved to be a triumph

The Independent describes it as a lacklustre budget in the shadow of Mr Brown,noting that

There were times yesterday when it was hard to believe that there had been a change of Chancellor, so reminiscent of his predecessor's register and cadences was the Budget speech of Alistair Darling.

Dangerously Dull says the Guardian

Neither elegant nor adventurous, it bored MPs and will bore voters, too, who may notice the rising price of drink, but not the flurry of incremental schemes and reviews that accompanied it, nor the big increase in spending on child poverty. The speech was essentially a compendium of Gordon Brown's less interesting phrases - made even less fun by Mr Darling's delivery. Stability (the new prudence) is an estimable ambition, but after Northern Rock and with an economic outlook bleaker than a Beckett play, a commanding performance was called for and Mr Darling did not deliver.

The Times says

it proved to be a sanguine attempt to cope with a dramatic change in the economic climate

but

Still, against the backdrop of a precarious world financial system, a slowing British economy and an overstretched public purse, the modesty of Mr Darling's first Budget provides a welcome dose of dullness for the British economy in these all too interesting times.

The Sun pulls no punches

where have we heard that one before?
Darling trotted out the same line yesterday that we have been hearing in Labour Budgets for 11 long years

and

After 11 years, shouldn’t Labour be delivering rather than promising?

The Telegraph refers to Labour's decade of waste

the sun seemed to be peeping out from behind this thunder cloud as he delivered a distinctly sanguine assessment of the British economy. We hope, but doubt, he is correct

. and describes a

disappointing package of pettifogging measures that push money around the system without striking out in any clear direction.

And finally the Guardian reminds us of another lost opportunity

For a moment it seemed as if the chancellor had grasped the Stern review's conclusion: that the cheapest option is to face up to the threat and address it at once. Sadly, Mr Darling did not keep pulses racing. He followed his call for immediate action with a lumbering reminder about the worthwhile review of a far-off carbon target - set for 2050.Any serious hope that the budget might give a lead on the environment died the moment Mr Darling postponed a small rise in fuel duty, which simply caught up with inflation

Missed opportunities and a boring speach

One thing that most commentators are saying is that it was one of the dullest budget speaches ever given.listening to Ken Clarke on Radio 5 live earlier,he said that it sounded like the Chancellor had not seen before reading it out.

You can check out all the details HERE



Alan Cochrane asks

Was Alistair Darling's speech an absolute clincher in the argument for calling a halt to the annual budget statement, at least in its present form?

But back to basics and we seem to living in a parallel universe.On one side our economy is the most stable in the Western World,borrowing is under control and inflation is low.On the other we are teetering on the brink of bankrupcy and our incomes are being eroded by rising prices for food,housing and fuel.

What the budget did if anything was to show that this Chancellor once again is incapable of making a decision(Gosh he cannot even decide about taxing plastic bags).A major opportunity for taxing consumption has been lost as has one for controlling alcohol.(on that topic according to Fraser Nelson,a line of cocaine is now cheaper than half a pint of cider)



Perhaps most importantly as Adam Creighton says

Despite the sophistry of the Budget speech, the fact remains that Britain—after 10 years of solid economic growth—still has an enormous stock of debt, around 40 per cent of GDP. Moreover, it’s growing; this year there will be another £15 billion of borrowing to fund a bloated and enormous state. Darling made many comparisons to the state of British finances in the 1980s and early 1990s, but these comparisons through time are completely unfair given the different state of the economy then

.

Live blogging of the budget

Budget Live blog

13.23 It's all over and I wonder what if anything was actually said.More like a party political broadcast than a budget.David Cameron says that the Prime Minister and the Chancellor are living in a different world.

13.22 Fuel payment up to £250 and £400 for pensioners

13.20 11p on a packet of fags,alcohol duties will rise 6% above RPI and will stay at 2% above inflation for the next two years.

13.17 Here comes the cars bit,road tax system from 2009 will encourage drivers to use more economic cars.For 2010 on new cars a higher rate for the more polluting cars

13.16 Legislation to impose a charge on plastic bags if volunteery systems don't work

13.14 Now to climate change.The usual waffle on commitment,and next year will see a carbon budget alongside the normal budget.

13.10 Wants to see more flexible mortgages,and the use of long term fixed mortgages to stablise the housing market.

13.09 Key workers will be able to borrow money thru shared equity schemes,level now at 50% rather than 75%

13.07 New funding for research into road pricing

13.05 Government has doubled investment in public transport since 1997.There will be maesures to speed up passenger movement thru airport controls( another sop to the City)

13.04 More investment for teaching science in schools,increased investment in adult skills training.Over £6b a year will be spent onscience skills by 2011

13.02 The Non Doms issue is raised.No changes in the current proposals

13.00 Wants to do more to help small and medium sized businesses.an additional £60m for the small business loan scheme and a widening of the limits for companies wishing to use the scheme.no changes though to corporation tax

12.59 The UK is one of the best places in the world to do business

12.58 Now for business.Open and competive markets and removing barriers to trade thru the world.

12.57 Customers on pre payment energy meters will be given a fairer deal

12.54 Now comes the child poverty comittments.Oct 2009 the rules for council tax and rent will be adjusted to help parents working as opposed to those on benefits.the planned £20 increase in child benefit is being brought forward to April 2009

12.53 Propoganda continues,spending must be aligned with reform,schools results are better,cancer traetment is better.The focus for the next decade is to make public services even better

12.51 By April 2010 all long term incapacity benefit claimants will have attended a clinic

12.49 The propoganda starts.Spending on health,education and public transport all at record levels.Spending on defence at record levels as with overseas aid.The longest suatained level of public spending by 2011.

12.47 Our debt levels will be lower tha the Euro zone,America and Japan

12.45 Planned 2p rise in fuel duty due to come in from April postponed until October

12.42 Government public finances are in good shape( to opposition sniggers) Debt and borrowing will be lower than forecast.Next year borrowing will £43b less than 2.7% and will be 1.2% by 2012( more gasps of disbelief)

12.39 We can look foreward to more inflation in the short term due to fuel inflation but the target will remain at 2%

12.38 Growth will be faster in Britain than other members of the G8

12.36 We are the most stable economy in the Western world according to the Chancellor.

12.34 According to Iain Dale

Don't blame it on the sunshine, don't blame it on the moonlight, don't blame it on the good times, blame it on the world econonmy.

12.32 Alistair Darling gets to his feet for his first budget.The usual pre amble as the Cahncellor tells usBritain is better placed than most to weather the economic storms and because of measures taken during the course of the government,growth will continue.

12.00 Prime Minister's questions starts with a planted question which is their to demonstrate that the budget will be one for stability and to appease backbenchers he says that the government will maintain its commitment to child poverty

Gone by the end of the year?

Will this be Alistair Darling's first and last budget.The rumourmongers are predicting that he will be gone by the end of the year.

It has been billed as the budget which will have little room for manoeuvre.Instead Darling will have to demonstrate that he is at least in control of battening down the hatches against global economic recession.

Over at Coffee House,Elizabeth Truss and Lucy Parsons say that

This week's Budget provides the Chancellor with an opportunity to set out a new approach for government spending, based on the notion of a long term sustainable public spending policy. If this opportunity is missed, it will leave the way clear for the Opposition parties.

They quote from a new report published today by independent think tank Reform which argues that

the programme of public spending increases begun in April 1999 has been unsuccessful. This period of public sector expansion - the largest and longest spending increase of the last 35 years – has failed to achieve its stated aims; has acted as a weight on the private sector, damaging long-term economic growth; and has left the UK ill-placed to face the challenges of the coming years.

Wednesday's budget will also take place in an atmosphere where as Guido points out

during all this long unbroken period of economic growth, Gordon failed to pay down the government debt - a truly prudent Chancellor would have done it at some strong point in the economic cycle. He did however forecast the budget surplus this year to be of some £9 billion, in fact the budget will probably be in deficit £9 billion.

So what do we have to look forward to.Some sops to green taxation,a pledge to reduce child poverty,taxes on alcopops and taxing of Non Doms.

According to John Redwood

The Chancellor should turn his mind to the big picture. He should try to get on top of his own spiralling debt and spending, without damaging important public services

. and

We are in dangerous and uncharted waters. The UK ship of state is carrying too much surplus weight and is not being sailed well. We need more liquidity in markets, and lower interest rates, but the poor performance of the UK public sector constrains UK action