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Darling '£15bn spending cuts due' Darling '£15bn spending cuts due'
(30 minutes later)
Chancellor Alistair Darling is expected to announce some £15bn of spending cuts over the next few years when he delivers his Budget statement.Chancellor Alistair Darling is expected to announce some £15bn of spending cuts over the next few years when he delivers his Budget statement.
He will say the money can be found by making Whitehall more efficient.He will say the money can be found by making Whitehall more efficient.
BBC political correspondent Laura Kuenssberg said the Budget would reveal the extent of public borrowing this year, potentially more than £160bn. The Budget will reveal the extent of public borrowing this year, potentially more than £160bn.
The Conservatives say the Budget will be a "day of reckoning" amid the worst economic crisis for decades. The Conservatives say Wednesday's announcement will represent a "day of reckoning" amid the worst economic crisis for decades.
The Treasury has already said that there will be £5bn of savings in the financial year 2010 to 2011.The Treasury has already said that there will be £5bn of savings in the financial year 2010 to 2011.
But Mr Darling is expected to say that another £10bn will be found from the 2011-12 financial year onwards. Help for motorists?
A decision on including the car scrappage scheme in the Budget has still not been finalised by the Treasury. But Mr Darling is expected to announce that another £10bn will be found from the 2011-12 financial year onwards.
A decision on including the car scrappage scheme - aimed at helping the ailing automobile industry - in the Budget has still not been finalised by the Treasury.
We need Alistair to inject some optimism, not just among Labour MPs of course, but in the wider economy Tom Harris, Labour MPWe need Alistair to inject some optimism, not just among Labour MPs of course, but in the wider economy Tom Harris, Labour MP
This could see motorists receive a payment of £2,000 to trade in cars that are a certain number of years old.This could see motorists receive a payment of £2,000 to trade in cars that are a certain number of years old.
Officials are still studying the detail of how such a scheme might work, but it is expected that a plan of some description will feature in Wednesday's announcement.Officials are still studying the detail of how such a scheme might work, but it is expected that a plan of some description will feature in Wednesday's announcement.
Labour MP Tom Harris said the chancellor had to be upbeat, despite the difficult circumstances.
"I think it's very important he gives us some optimism, some cause for optimism," he said.
"I think most of the economists who are putting their head above the parapet at the moment are saying that they expect the upturn to begin early next year.
"And we need Alistair to inject some optimism, not just among Labour MPs of course, but in the wider economy."
'Unsustainable'
Our correspondent said "not many in Westminster will envy" the chancellor's "huge challenge" as he delivers his second Budget.
"With his previous predictions of the scale of the recession now proved wrong, one of his tasks will be to admit his mistake," she said.
Think of everybody earning £30,000 a year spending £40,000 a year Conservative MP Mark Field
Conservative MP Mark Field called Labour's figures "unsustainable".
He said: "Suddenly, you know, the true horror will really come to the fore.
"And I think one of the difficulties is that people are so befuddled with these figures about trillions of pounds of overall debt and hundreds of billions of pounds of bailing out of banks.
"But the statistics are, even by Labour's own figures, it now looks as though, for the year ahead, they will be saying for every £4 they're spending, they're only going to be able to raise £3 in tax.
"And that's a huge thing. Think of everybody earning £30,000 a year spending £40,000 a year - well, it's simply not going to be sustainable".
Revised figures
Shadow chancellor George Osborne has said the Budget, expected to confirm a likely 3% fall in growth in 2009, will "lay bare" Labour's economic failings.Shadow chancellor George Osborne has said the Budget, expected to confirm a likely 3% fall in growth in 2009, will "lay bare" Labour's economic failings.
"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 said."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 said.
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 now revise this to a projected drop in annual growth of between 3% and 3.5% - which would be the worst recession since 1945.Experts believe he could now revise this to a projected drop in annual growth of between 3% and 3.5% - which would be the worst recession since 1945.
'Unsustainable'
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.
On Monday, the CBI employers' group predicted a "slow and fragile" return to growth in spring next year. Conservative MP Mark Field called Labour's figures "unsustainable".
He said: "Suddenly, you know, the true horror will really come to the fore.
"And I think one of the difficulties is that people are so befuddled with these figures about trillions of pounds of overall debt and hundreds of billions of pounds of bailing out of banks.
"Even by Labour's own figures it now looks as though, for the year ahead, they will be saying for every £4 they're spending, they're only going to be able to raise £3 in tax.
"And that's a huge thing. Think of everybody earning £30,000 a year spending £40,000 a year - well, it's simply not going to be sustainable".
Labour MP Tom Harris said the chancellor had to be upbeat, despite the difficult circumstances.
'Above the parapet'
"I think it's very important he gives us some optimism, some cause for optimism," he said.
"I think most of the economists who are putting their head above the parapet at the moment are saying that they expect the upturn to begin early next year.
"And we need Alistair to inject some optimism, not just among Labour MPs of course, but in the wider economy."
The Confederation of British Industry predicted a "slow and fragile" return to growth in spring next year.
Director-general Richard Lambert told BBC Radio 4's Today programme he thought the chancellor should do very little in the short term.
He said: "We don't think he's got room for a big fiscal boost. We think he should be doing things to help jobs, particularly [for] young people, who face a tough jobs market in the next year."
Mr Lambert added: "The big question is what's he going to say about the medium term and how are we going to plug this big borrowing gap that's now building up?"
Meanwhile, the Ernst & Young Item Club predicted that the UK economy would shrink by 3.5% this year, but only by 0.1% in 2010.Meanwhile, the Ernst & Young Item Club predicted that the UK economy would shrink by 3.5% this year, but only by 0.1% in 2010.
Will efficiency measures restore the British economy? What would you like to see in Budget 2009? Send us your comments using the form below.Will efficiency measures restore the British economy? What would you like to see in Budget 2009? Send us your comments using the form below.
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