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| Version 0 | Version 1 |
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| UK faces 'Budget woes' - Tories | UK faces 'Budget woes' - Tories |
| (about 2 hours later) | |
| The 2009 Budget will be a "day of reckoning" for the government with the UK set for the worst recession since 1945, the Conservatives have said. | The 2009 Budget will be a "day of reckoning" for the government with the UK set for the worst recession since 1945, the Conservatives have said. |
| Chancellor Alistair Darling is expected to tell MPs the recession will be more severe than earlier forecast and the economy could contract by more than 3%. | Chancellor Alistair Darling is expected to tell MPs the recession will be more severe than earlier forecast and the economy could contract by more than 3%. |
| He will also outline borrowing levels for the current year which some experts believe could be as high as £160bn. | He will also outline borrowing levels for the current year which some experts believe could be as high as £160bn. |
| Labour said higher borrowing was needed to get Britain through the recession. | |
| Business Secretary Lord Mandelson said the best way to rebalance the public finances was to get the economy moving again and the Budget would set out plans to "go for growth". | |
| Recession forecasts | Recession forecasts |
| But shadow Chancellor George Osborne said the UK's finances were in "an enormous hole", telling the BBC Mr Darling should focus on future plans to reduce government debt rather than "short-term political pressures" ahead of a likely election in 2010. | |
| The Lib Dems said Mr Darling must address the fact that banks were still reluctant to lend and unemployment was rising fast. | The Lib Dems said Mr Darling must address the fact that banks were still reluctant to lend and unemployment was rising fast. |
| I think you are going to see the Chancellor forecast the longest recession that Britain has had since World War II George Osborne class="" href="/1/hi/business/8002618.stm"> The Budget in figures | |
| Economists agree Wednesday's Budget - Mr Darling's second as chancellor - will make gloomy reading for the government. | Economists agree Wednesday's Budget - Mr Darling's second as chancellor - will make gloomy reading for the government. |
| Mr Darling is expected to have to admit that his previous forecasts for how weak the UK economy would be in 2009 were far too conservative. | Mr Darling is expected to have to admit that his previous forecasts for how weak the UK economy would be in 2009 were far too conservative. |
| In last autumn's pre-Budget report, the chancellor forecast the economy would contract by between 0.75% and 1.25% in 2009. | In last autumn's pre-Budget report, the chancellor forecast the economy would contract by between 0.75% and 1.25% in 2009. |
| Experts believe he could announce a revised forecast of a drop in annual growth of between 3% and 3.5% - which would be the worst recession since 1945. | Experts believe he could announce a revised forecast of a drop in annual growth of between 3% and 3.5% - which would be the worst recession since 1945. |
| However, Mr Darling is expected to say the economy will return to growth next year and gain further strength in 2011. | However, Mr Darling is expected to say the economy will return to growth next year and gain further strength in 2011. |
| Mr Osborne told BBC One's Andrew Marr Show the Budget statement would be a "truly dramatic moment in which the economic carnage of the last 10 years will be laid bare". | |
| "It will be a day of reckoning and I think you are going to see the Chancellor forecast the longest recession that Britain has had since World War II." | "It will be a day of reckoning and I think you are going to see the Chancellor forecast the longest recession that Britain has had since World War II." |
| He added that the UK's public finances "were not just the worst in the world but the worst since World War II". | He added that the UK's public finances "were not just the worst in the world but the worst since World War II". |
| 'Saddled with debt' | 'Saddled with debt' |
| The Conservatives have said Labour's borrowing - which in November was forecast to hit £78bn this year but is now expected to be much higher - is reckless and will leave a whole generation saddled with debt. | The Conservatives have said Labour's borrowing - which in November was forecast to hit £78bn this year but is now expected to be much higher - is reckless and will leave a whole generation saddled with debt. |
| Ministers say the sharp rise in borrowing is needed to support the economy through the downturn and protect jobs while stressing the UK must live within its means in the medium term. | Ministers say the sharp rise in borrowing is needed to support the economy through the downturn and protect jobs while stressing the UK must live within its means in the medium term. |
| This has led to speculation that Mr Darling could pay the way for a range of likely tax rises and spending cuts on Wednesday. | This has led to speculation that Mr Darling could pay the way for a range of likely tax rises and spending cuts on Wednesday. |
| Mr Osborne said the Tories would spell out very clearly the difficult choices they would face if elected and that government was facing a "very serious period of spending restraint". | Mr Osborne said the Tories would spell out very clearly the difficult choices they would face if elected and that government was facing a "very serious period of spending restraint". |
| He said Labour's pledge to increase public spending by 1.1% next year was looking "unrealistic" and should be reviewed. | He said Labour's pledge to increase public spending by 1.1% next year was looking "unrealistic" and should be reviewed. |
| The Conservatives were reviewing government spending programmes across the board, he stressed, although he added that he had not ruled out future tax increases as well. | The Conservatives were reviewing government spending programmes across the board, he stressed, although he added that he had not ruled out future tax increases as well. |
| "I understand how tough it is going to be but it is necessary," he said of likely spending constraints in the future. | "I understand how tough it is going to be but it is necessary," he said of likely spending constraints in the future. |
| 'Sensible | |
| Lord Mandelson said the Conservative approach would lead to "savage cuts" in public spending. | |
| Labour must show, in the Budget, that its fiscal policy was "sensible and responsible", he argued. | |
| The reason borrowing is going up is to pay for the costs of the recession Lord Mandelson | |
| Debt levels were a matter of concern, he acknowledged, but were justifiable in the short term because of the exceptional economic conditions the country was facing. | |
| "The reason borrowing is going up is to pay for the costs of the recession and to get us through it as quickly and painlessly as possible," he added. | |
| For the Lib Dems, Vince Cable said the UK was in the midst of an economic crisis and ministers must do more to free up bank lending and stem the spiralling rise in unemployment. | For the Lib Dems, Vince Cable said the UK was in the midst of an economic crisis and ministers must do more to free up bank lending and stem the spiralling rise in unemployment. |
| "Now the challenge is to face up to the sheer scale of something we have never had in our lifetime, which is complete collapse of the banking system and all that flows from that," he said. | "Now the challenge is to face up to the sheer scale of something we have never had in our lifetime, which is complete collapse of the banking system and all that flows from that," he said. |