Live blog of Alistair Darling's Budget statement

1.21pm Alistair Darling sits down.

1.20pm ISA limits to be increased.

1.19pm Increase in statutory redundancy pay from £350 to £380 a week. Promise that pensions will rise in real terms. Winter fuel allowance to be maintained at higher level.

1.16pm Child element of child tax credit to increase by £20. Extra money in child trust funds for the disabled children.

1.15pm £535million in support for off-shore wind farms. Combined heat and power technology to be exempt from the climate change levy.

1.13pm £435 million to promote energy efficiency in homes, businesses and public buildings.

1.10pm Extra funding to expand the broadband network announced.

1.06pm £500 million of support for house-building; £50 million investment in modernisation of  accommodation for the armed forces. £100 million towards local authorities building energy efficient housing.

1.05pm Public spending growth reduced to 0.7% from 1.1% in 2011-12.

1.03pm Local health and schools investments will continue. £9 billion of efficiency savings by 2013-14. £1 billion to combat climate change.

1.02pm Alcohol duties up 2% at midnight; tobacco duty up 2% at 6pm; fuel duty expected to rise by 2p a litre from September.

1.00pm No increase in income tax this year, but additional steps are "right" as the economy improves. 45p rate on £150k incomes and above will be increased to 50p. Those on £100k will not benefit from increase in thresholds.From April 2011, pension tax relief will be cut for those on over £150k.

12.58pm National debt will be 79% of GDP in 2013-14 and it will begin to fall in 2015-16.

12.57pm Borrowing will be 11.9% of GDP next year - £175 billion; and then £173 billion in 2010-11.

12.55pm "Countries cannot deflate their way out of recession". Fiscal easing of 0.5% this year.

12.54pm Allowing borrowing to rise is the "right thing to do".

12.53pm Public finances: tax revenues will not be up "for some years".

12.52pm For the car industry, a scrappage scheme will be introduced with a £2,000 discount for those buying new cars when trading in for a car more than ten years old - until March 2010.

12.51pm Help for companies with cash flow problems: loss making companies to be able to reclaim tax on profits made in previous 3 years.

12.49pm Stamp duty holiday on properties under £175k continues until the end of the year.

12.48pm From January, there will be a job or training place for all young people who have been out of work for 12 months. He announced additional funding for training and subsidies for those in sectors with strong future demand and more money for additional places in sixth forms.

12.46pm An extra £1.7 billion of funding for Job Centre Plus, and additional support for people out of work for more than 12 months.

12.44pm It's not in any government's power to prevent all job losses.

12.42pm From 2011 he forecasts growth of 3.5%. Inflation expected to reach 1% by the end of this year. RPI inflation to fall to -3% by September, falling back to 0% next year.

12.41pm 1.25% growth predicted in 2010.

12.40pm The economy contracted 1.6% in last quarter of 2008 and he expects it to do the same in the first quarter of this year, with his forecast for the year being -3.5%.

12.40pm Before the recession employment was at an all time time, but "no country can insulate itself from the worldwide downturn."

12.39pm "There are no quick fixes, there is no overnight solution".

12.36pm The help announced in the PBR "is coming through now", he claims.

12.35pm World economy to contract this year for the first time since WWII.

12.34pm The economy will start growing again "towards the end of this year".

12.32pm The budget will "provide jobs and spread prosperity" in the "most serious economic turmoil for 60 years" and not repeat the mistakes of the 1930s.

12.31pm The Deputy Speaker has taken the chair for the Budget statement. Alistair Darling gets to his feet.

Jonathan Isaby

Comments

[John Moss]

3.5% growth!

What planet is he on?

[Comstock]

Scrappage scheme- how many people with a ten year old car can afford a new one?

[Comstock]

Good to see the government are ignoring Tory calls for cuts, though.

[Thomas]

"Good to see the government are ignoring Tory calls for cuts, though."

Tory calls for cuts? Isn't everybody, including many prominent members of the labour party, calling for cuts?

[Comstock]

Can I feel a tax rise somewhere about to be revealed?

Lets hope it's on the rich

[Sally Roberts]

Bribing young people with money that we have not got - shameful!!

[Tommy]

"Lets hope it's on the rich"

Maybe, but if it is anything like the last tax hike then it will be on the poor.

[Sally Roberts]

I think you're about to get your wish, Comstock!....

[Sally Roberts]

Clouting the "rich" pensioners - spiteful!

[Comstock]

50%.....yes!!!!!!

[Bob Crozier]

Truely shocking borrowing figures!

Astounding.

[Sally Roberts]

50% top rate tax!! This could be an elephant trap - we need to be careful how we respond to it.

[Mark Fulford]

So, if you're buying a new car you go and get a banger first for £200 and go £1800 up.

Labour takes us back into 50% tax territory.

[Cleethorpes Rock]

50% income tax will kill what's left of the economy. It certainly won't raise any money.

I can only assume Comstock, that you're an accountant licking your lips at the amount of business coming your way as people queue up to hide their money from Brown and Darling?

[Comstock]

"So, if you're buying a new car you go and get a banger first for £200 and go £1800 up.

Lets wait for full details, but I don't like this scheme, especially when he has just put fuel taxes up again!

Crazy to subisdise cars with one hand only tax 'em with the other!

[Ross Warren]

Well so far (about 10 Min's in) he has spent a vast amount on the Unemployed and allowed a few business's to defer their tax. We are getting the silly car scraping scheme. All this extra spending despite the fact that taxation is falling. This is clearly a budget aimed at getting Labour reelected. Jam today, but none tomorrow. What a very irresponsible budget. Labour have made their choice and its to increase our debt burden for political reasons. How Darling sleeps at night is beyond me. This is a spend spend spend Budget and an attempt to bribe the population into voting this shower back in for another term. Shockingly transparant, Labour is putting its own desire for power before the long term good of our nation.

[Sally Roberts]

Bribing the Armed Forces with promises of extra homes for them (again using borrowed money....) - and he thinks that is suddenly going to make our Servicemen and women love Labour - I don't think so...

[Sally Roberts]

"This is a spend spend spend Budget and an attempt to bribe the population into voting this shower back in for another term. Shockingly transparant, Labour is putting its own desire for power before the long term good of our nation."

Quite agree Ross - in fact it shows the desperation of a terminally sick administration which is trying to shore up its core vote.

[ToryBoy85]

A recession is occurring because the government has slowly increased government debt (and turn a blind eye to personal debt), resulting in a very big bust at the end of a boom.

A depression will occur if our entrepreneurs, our CEOs, our businesses, are asked to pay for it. They will leave. The country will go into prolonged recession or worse.

New Labour is dead, I keep on underestimating Alistair Darling.

[YMT]

We're doomed....

[MG]

Yes the scrappage scheme is nuts and I doubt any detail thats contrived can get round all the unintended consequences which anyone can soon imagine if they actually spend time thinking about it!!

[fight50p]

A 50p top rate is outrageous. If we don't fight this with everything we've got we might as well go home. How we have allowed the creation of a climate where such an announcement is seen as politically acceptable is another question. For the moment, we need to see Cameron stand up and say he is opposed to this in principle.

[Adam]

50% tax - what a disgrace.

The Tories MUST oppose that. Either we stand for aspiration and enterprise or we stand for nothing at all.

[Michael McGowan]

There is no chance he will oppose 50% ( and when you add in the NI surcharge it is in fact closer to 53%). Moreover, you will have loads of "Modernisers" telling the media that the Tories must agree with Labour's plans to soak high earners to "show that they have changed."

[Cleethorpes Rock]

The government are trying to bribe their way back into power with money they don't have.

Their schemes up to now have failed and now they just want to throw good money after bad. Now Brown is pawning the future.

They are beneath contempt. I hope Osborne and Ken Clarke are in the media later ramming home the scale of this con.

[Comstock]

"you can grow your way out of a recession, you can't cut your way out of it"

The whole think in a nutshell. Scrappage scheme aside, great stuff.....

[Ashley Fox]

The borrowing forecasts for the next 5 years are huge, yet based upon unrealisticaly optimistic growth estimates.
It is likely growth will be lower and therefore that borrowing will be even higher than forecast. Quite frightening !

[ToryBlog.com --> Lol, last Labour budget for a long time]

"A 50p top rate is outrageous."

Lol, he might as well make it 99p, few will pay it, most will restructure before it is introduced, and it will raise peanuts.

Maybe people earning 150k can reduce their salaries to 125k and receive 25k a year in tax-free attendance allowances...

[Mark Fulford]

and when you add in the NI surcharge it is in fact closer to 53%

And when you add the company's contribution it's 64%.

[Ross Warren]

"A 50p top rate is outrageous." & "50% tax - what a disgrace." I do agree, most especially as he is clearly planning to spend far more than we can afford. 700 Billion pounds of borrowing its loony land stuff. I thought this was supposed to be a fair budget. D.C. will have to play this one carefully. Sally is right this is an elephant trap. David is speaking right now so I'm off to listen to him.

[Adam-]

Early indications suggest a big thumbs down in the currency markets - pound fell sharply as the budget finished...

[Norm Brainer]

Well, the ISA thing is good - But why only for the over 50s this year?
I expect it's something else that will come clear and it's done for their political advantage to dig them out of some hole.

Fail!

[Paul D]

Shares in the airlines will be rising sharply though as high earners book their one-way tickets out of the UK

[ToryBlog.com --> Lol, last Labour budget for a long time]

Sterling is dropping like a stone.

The markets have spoken.

[Cleethorpes Rock]

This is the Back to the Future Budget. Get your flares and platforms on, chuck another bin-bag on the heap, dust off those Slade albums- 1978 here we come!!!

Short term borrowing and spending will lead to astronomical medium term inflation. It's easy to get carried away on the deflation bandwagon, but what situation will all this spending and money printing put the economy in when we eventually get out of the recession?

[Will B]

The scrappage scheme is an absolute travesty of a policy!

It's two main claims to being a fantastic policy is that it will stimulate the car industry as people will go out and buy new cars and that it will help the environment in that it will reduce pollution.

Neither are true.

The thing is that people can't actually afford to go out and buy new cars, even with a two grand cheque from the government. Most of us who where going out to buy new cars during the good years where doing it on credit!

As for the environment argument, I don't consider throwing perfectly fine working cars on the scrap to go and buy another car is very environmentally friendly. It's just more of the same thing from a government applying their old mentality to a new and devastating situation.

Consumerism in car production is not going to be any more environmentally friendly than it's been in the clothing industry. We can't afford economically and environmentally to be a use once and bin it economy.

Cameron responded quite cleverly to the 50% gimmick. Pointed to these increases in duties, which as someone without as much disposable income as some of our minsters of state, will be affected quite significantly.

Every. Penny. Counts. And this government is slamming us as hard as they can.

[Norm Brainer]

It's two main claims to being a fantastic policy is that it will stimulate the car industry as people will go out and buy new cars and that it will help the environment in that it will reduce pollution.

I don't like the protectionist tone aswell... "Throw away your dirty foreign vehicle and we'll use other people's money so you can buy a nice clean British one"

I'll keep my Rover, thanks.

[Cleethorpes Rock]

"Labour governments always run out of other peoples' money."

Tory spokesmen should repeat this as many times as they can on the news today.

[Steve Tierney]

We need to let the 50p tax go for now. It's just another trap. We aren't in power so we can't stop it. The purpose is to encourage the mind-numbed folk who don't know economy from astrology to cheer (cue Comstock) in the sad belief that this will help rather than cripple the poor and to get us to shout about it, bringing the 'left' back "on side."

Don't play their game. There will be opportunity to address this once we've got the lunatics back in the asylum. Until then, softly softly. Point out that high taxation discourages wealth-creation, which reduces employment or all and leave it at that.

[Patsy Sergeant]

I am afraid my first reaction, to all the intentions that Alistair Darling was telling us was - PROVE IT!!

Even the news journalist said amongst other things, that this is a voters Budget (whats new), preparing for the next general election.

The sound-bites were all there, I am surprised Comstock is so susceptible!

The only excuse for promising hot air to millions of people unemployed, with not much chance of getting a job, and 'being economical with the truth' with the economic and debt statistics, is that perhaps, optimism, however hollowly based, might help to 'talk-up' the financial markets. More optimistic financial markets might help to produce jobs - in the long term, but not in the short term. Even Mr. Darling must know this!

[James Cullis]

"There are no quick fixes, there is no overnight solution".

Darling, Oh DEAR; there is an real alternative its called A TAX CUT IT stops the flight of capital wich is going to happen

[James Sproule]

As a point of unalterable principle, governments should always have to justify taking our money (remember it is ours, not theirs) in tax. Does anyone (even the lefties) actually defend all government expenditure? Or have we decided to accept that it is easier to raise taxes before tacking waste (what a set of priorities to set before the electorate!)

Given it will be difficult for any government which cuts expenditure to be loved, here a couple of general principles. It is better to cut whole programmes than have across the board reductions (allow a few people to hate you a lot, rather than have everyone hate you a fair amount). Do it quickly so that benefits can be delivered (the lesson from Eastern Europe was that those governments which did best were the ones which tackled their problems head on, rather than tried to muddle through). We do not want to be hated when we are in government, but we must not be afraid of some people disliking us either.

[Matthew Dear]

Summary: load of old hogwash. This budget was the sort of frantic scrabbling for cashflow that precedes a bankruptcy. Borrowing on a scale not seen since the Marshall Plan. Only we're not trying to rebuild a war-ravaged continent, we're simply trying to keep everybody in iPods, electric toothbrushes and gold-plated pensions.

Let it go people, let it go. This was the opportunity to re-evaulate. This was the chance to say "modern life is not making us any happer." This was the possibility of getting off the treadmill, yet we've chosen to crank it up to 20 and hope we can run fast enough for long enough to get to where we think we might be going.

Hello, is that the IMF? Erm, Gordon here. Nobody will buy our bonds, miserable buggers, any chance of an advance?...

[a-tracy]

"From April 2011, pension tax relief will be cut for those on over £150k."

Who will actually pay this extra tax bill? I don't know anybody personally earning over £150k but I don't like the idea of a tax relief reduction on pensions. After all this only applies to private sector workers as all public sector workers pensions are defined benefit not money purchase (so in other words small earning tax payers pay this tax increase on public sector workers behalf).

If large private conglomerates have to increase contributions to make up this tax deduction, to maintain defined benefit pensions to people like Mr Goodwin, then it is normal small ISA investors and money purchase pensioners whose returns from these very same Companies will reduce and thus reduce our pensions.

[Ross Warren]

Comstock this budget is going to place an intolerable burden on our children and their children. Brown and Darling,seem to have thrown caution to the wind and decided that as they cannot win the next general election they will bankrupt us instead. Then they will come into power and place all of the blame on an "unfeeling Tory government". Just look at the pound right now, the markets know this budget is wrong only the most crass pinko would imagine otherwise.

[Ross Warren]

"Then they will come into power" Opposition is what I meant to say. I'm so angry I could spit blood.

[Paul G (formerly Comstock)]

Paul D's comment of the day said "Shares in the airlines will be rising sharply though as high earners book their one-way tickets out of the UK"

Let them go. Plenty will be keen enough to take their jobs. A 200 grand job is still a 200 grand job even when you are paying an extra 2,500 in tax a year.