Alistair Darling warned against “throwing away” Britain’s economic recovery when he announced his final Budget before the general election in the House of Commons on Wednesday. The Chancellor of the Exchequer told a packed chamber that Tory plans for immediate and savage cuts in public spending would be “wrong” and “dangerous” and “risk ruining the economic recovery”.
In what was, as expected, less a Budget and more an election manifesto, coupled with a robust defence of the party’s record in government, Mr Darling put clear water between Labour and Conservative proposals for the economy.
He said “our economy is at a crossroads” and there are “tough choices ahead which will shape our economy and society for decades to come”, adding: “the record shows the right calls were made.” The Chancellor said the role of government was not to stand aside – as David Cameron and George Osborne have said a Conservative government would do – but to help people. He told the chamber: “This is a Budget to secure the recovery and invest in our industrial future.” Mr Darling concluded by saying: “We have worked too hard to support this country to throw it all away now” – by voting for Mr Cameron in May – and Tory plans would only “deepen the recession and delay the recovery”.
Borrowing, he said, was £11 billion lower than forecast and, despite the global recession, Britain has the fastest deficit reduction plan of any G7 country. “The result of our choices,” he said, “is that revenues are better than forecasted” and the deficit will be halved over a four year period. The economy would grow by between 1 and 1.5 per cent this year and by between 3 and 3.5 per cent in 2011.
At the heart of an economically neutral Budget was a £2.5 billion growth package for small businesses to be provided, said Mr Darling, by switching existing spending.
He abolished stamp duty for first time buyers on properties under £250,000 – which means, he said, that nine out of 10 first time buyers will pay no stamp duty at all – and to pay for that increased stamp duty to 5 per cent on properties over £1 million.
He extended to March 2012 the scheme which guarantees anyone aged between 18 and 24 a job or training after six months out of work.
He said his tax on bankers’ bonuses has brought in £2 billion – twice as much as forecast – and he announced plans to make it easier for poor people to access banking services – he guaranteed a basic bank account for one million more of us – as well as plans to reform the international regulatory system. It is not right, he said, that banks are rewarded for creating excessive risk but the taxpayer has to pick up the bill when it all goes wrong.
Finally, Mr Darling warned that there was “nothing pre-ordained about continued recovery. We need to support trade and discourage protectionism.”
