Stay tuned for live coverage of Alistair Darling’s statement from 1230.
1231, PH: PMQs is still going on. Tune into David’s live blog of that here.
1233, PH: Here’s Darling. One sentence in and he’s already refering to the global crisis and “unprecedented action”. He adds: “The task today is to ensure the recovery and to promote growth.”
1234, PH: One minute in, and it’s already dividing line heavy. “The choice is between going for growth or endangering the recovery … investment … cuts”. Yada, yada, yada.
1235, PH: Darling is pointing to signs of global recovery – US housing market stabilising etc. Shame we’re still in recession here.
1237, PH: Darling: “I’m confident that the economy will grow by the turn of the year … but we cannot be complacent.” He hasn’t said “do nothing Tories” yet – but its heavily implied in almost everything he’s said so far.
1237, PH: There we go. VAT will go back up to 17.5 percent in January.
1239, PH: Darling’s announcing a range of deferred rate changes. The most significant is that the increase in corporation tax for small enterprises will be postponed until after 2010.
1240, FN: Darling is speaking slowly and without interest – almost as if the words were written for him, and he’s repeating them under duress. Brown doing his best to keep that smirk in his face. And listen: the words are pure Brown.
STATE SPENDING KEY TO RECOVERY? “To promote growth, we need to invest in the dynamic sectors of the future” – who is ‘we’? What he means, the central Labour thesis, is that government needs to spend. The idea that the state can spend its way to recovery: this, the Japanese error of the 1990s, is now on its way to Britain.
OUTRIGHT POLITICKING “The choices are between going for growth or putting recovery at risk… Choices are between two competing visions” naked electioneering. This budget is supposed to be about country, not party. But that’s Brown for you.
1241, PH: Darling is as pains to highlight global trends – eg in trade – which will have negative impacts over here.
1242, PH: Gosh, this is political. Here’s Darling’s latest anti-Tory barb: “unemployment can never be a price worth paying.”
1243, PH: Darling’s making very suspect claims about employment. “3 million” have been taken off the claimant count over the past year. It all sounds a bit like Brown’s favourite claim that 500,000 have been saved from unemployment by Labour policies – i.e. something that can’t be proved…
1244, FN: The politiking just gets worse…“In recession of early 1990s, twice as many businesses went under…. In the early 1990s hundreds of thousands of families lost their homes and I did not want to see this repeated… Repossessions running at half the rate of the 1990s…” – some of Darling’s statement sounds like it should come from a soapbox on the campaign trail.
1245, FN: “Claimant count stands toady at 1.6m …Unlike 3m of the 1990s “. But count the others and the number on the dole is a scandalous 5.83 MILLION – details here.
1246, PH: Darling announces that he will cut bingo duty. Awave of laughter ripples through the chamber.
1247, PH: Darling says that low RPI inflation has “helped families” because of low prices. Seems like he’s claiming credit for something he’s had next to no influence over…
1248, PH: A-ha. Here are the growth figures. Darling’s downgraded 2009 growth to -4.75 percent. In 2010, he’s got it a between 1 to 1.5 percent. And from 2011 on it’s the same figure as he used in the Budget – a whopping 3.5 percent. Very optimistic, and all part of Labour’s narrative that we can grow our way out of our fiscal mess.
1250, PH: Darling’s sugarcoating the debt figures. He simply says that net debt will come down in 2015.
1252, PH: And there are the borrowing figures. Borrowing has been upgraded to £178bn this year and £176bn next. Will be down to around £80bn in 2015. Thanks, Darling.
1253, PH: Darling says our debt levels will remain in line with other G7 countries. Hm. The problem is how quickly our debt levels have risen, and how few signs there are that the brakes will be properly applied.
1255, JF: Darling has just detailed that the financial sector accounts for a quarter of all corporate tax revenues. Which does show just what a blunder letting the French get that commission post was.
1255, PH: More extensions. Dalring says that the loan guarantee scheme for businesses will be extended for another year.
1257, PH: Now Darling’s got into the energy and climate change section of his speech. It’s all about attention-grabbing schemes. A coupla hundred million for the “warm front” energy efficiency scheme. A fund to help people upgrade their boilers.
1300, Mark Bathgate: Estimate for bank costs reduced from 50billion to 10billion. This completely flies in the face of the National Audit Office report last week. That’s probably less than Northern Rock alone will cost. Then there is Singer and Friedlander, Bradford and Bingley, before even starting to consider Lloyds and RBS. Nice way to improve the optics of the total deficit but unlikely to have much grounding in reality. Less than 1/10th of the IMF’s current estimate for the taxpayers hit from the banks.
1300, PH: Another fund, this one to help 10,000 students from low-income backgrounds to get internships.
1302, PH: As expected, Darling’s introduced a lower 10 percent corporation tax rate for profits made on the back of patents.
1304, PH: And here’s the soak the rich section. Darling introduces the 50 percent tax on bankers’ bonuses over £25,000. He adds that these measures will be used to pay for the “help for young people”. So they’re not about balancing the Budget, then?
1306, PH: Darling confirms that he’s to reverse the decision to increase the inheritance tax threshholds. Dividing line, ahoy.
1309, PH: The 40 percent tax threshold will be frozen until 2012.
1310, PH: Jeers from the Tory bench as Darling says “We take these decision from a position of strength”.
1311, PH: Now Darling’s giving his excuses for not providing a spending review – global uncertainty, etc.
1312, PH: Darling’s emphasising the savings that have already been identified in government budgets. Current spending is to fall by 0.8 percent a year between 2010 and 2013. He stresses the measures which Brown mentioed earlier this week: cutting high-end public sector pay, ditching quangos, smarter government, all that stuff.
1313, MB: Bank bonus tax applied with cover story of building up balance sheets. Darling asserting that banks have profited from government assistance. This is not untrue. The point about banks utilising their subsidies to build up balance sheets sounds very like what George Osborne suggested a couple of months ago. Given the taxpayer is being belted by huge costs from the blow up and mortgage payers being hit with much higher margins, keeping cash on balance sheets not the worst of ideas. Those losing out from this will be furious though. Government getting this involved in the banking sector in so many ways was always going to be trouble.
1314, PH: Government contributions to public sector pension funds will be cut by £1bn a year. Public sector pay deals will be frozen and 1 percent. Somewhere – I missed what – he mentions a £500 million cut. You could say that every little helps. But this really doesn’t sound like a plan to get us out of a debt crisis.
1316, PH: Here’s a sting in the tail. Darling is going to increase all employer and employee national insurance contributions by a “half-pence” from 2011. People on lower incomes will be protected from the rise.
1318, PH: Here’s the ringfencing section. Darling talks about spending increases for the NHS and schools.
1319, MB: Very muted financial market reaction thus far. Gilts little moved (Bank of England money printing programme continues to protect Gilt market). Pound drifting a little weaker but nothing remarkable.
1319, PH: A Labour crowd-pleasing ending from Darling. He says that “as a result” of his measures today, he’ll be able to extend Free Schools Meals to thousands more children. Then mentions the child poverty targets, and gets a automatous cheer from the benches behind him.
1320, PH: And here’s George Osborne with his response. He looks angry.
1322, PH: Osborne is trying to undermine the government’s claim to economic credibility (not hard, to be sure). He’s dwelling on the debt figures, and the historic nature of our recession.
1323, PH: This is something the Tories don’t do too often: Osborne picks up on a Brownie in Darling’s speech – Darling contrasted the UK’s negative growth figures for one year with international negative growth figures over the whole recessionary period.
1325, PH: This is quietly effective stuff from Osborne so far, but far less punchy and direct than his reponse last year.
1326, PH: Osborne rightly highlights how the government’s efficiency plans are either unbelieveable or insufficient to the scale of the debt crisis.
1328, PH: Good quip from Osborne: “Darling has managed to do the previously impossible: ringfence a black hole.”
1329, PH: Very good stuff from Osborne, attacking the government’s attack on enterprise. “If you’re a family who wants a house … wants to get in life … then the message today is that Labour has turned it’s back on you.” This will chime with a few Blairites who feel that Brown has turned his back on an aspiration society.
1331, PH: Osborne twists one of Brown’s favourite digs at the Tories, saying that Labour policies “Will be rejected by the many, supported by the few.”
1332, PH: Osborne sits down. A robust, if not quite electrifying, performance from him – but the PBR document rather tells the Tories’ story for them.
1334, PH: Right, I’ll sign off there. We’ll have plenty more PBR coverage on Coffee House this afternoon.
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