Budget 09: The big gamble for Darling

Apr 23 2009 Huddersfield Daily Examiner

CHANCELLOR Alistair Darling is gambling on a rapid economic recovery to rebuild Britain’s battered finances – as he revealed that borrowing this year would hit a record £175bn.

In a grim Budget statement, he outlined the full depth of the economic crisis – warning that output would shrink by 3.5% this year, more than doubling his previous forecast.

He also revealed that borrowing this year would soar to £175bn – with another £173bn in 2010 – as the country battled with the worst global downturn in 60 years.

Despite the bleak figures, Mr Darling insisted public finances would get back on track with borrowing to be halved within four years as the economy begins to recover from the end of the year.

Tory leader David Cameron launched a scathing attack on the Government’s handling of the economy, saying: “As of today any claim they have ever made to economic competence is dead, over, finished.”

Among major Budget measures, the Chancellor said the planned new top income tax rate of 45% on incomes above £150,000 will be increased to 50% and take effect from next April – a year earlier than planned.

And from April 2011, pension tax relief would be restricted for those with incomes over £150,000.

Mr Darling defied calls from transport and motoring groups to announce a 2p per litre rise in fuel duty in September and then by 1p a litre above inflation each April for the next four years.