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| Tax rise 'not end of New Labour' | Tax rise 'not end of New Labour' |
| (9 minutes later) | |
| The income tax increase for the highest earners does not mark the end of New Labour, Gordon Brown has insisted. | The income tax increase for the highest earners does not mark the end of New Labour, Gordon Brown has insisted. |
| A 50p rate for earnings over £150,000, being brought in from next April, was a key part of Wednesday's Budget. | A 50p rate for earnings over £150,000, being brought in from next April, was a key part of Wednesday's Budget. |
| The Tories - who dubbed the Budget a "fantasy" - said it broke a key New Labour pledge, repeated in its 2005 manifesto, not to raise income tax. | |
| But Mr Brown argued New Labour was all about "helping people make the most of their potential" so it was not dead. | But Mr Brown argued New Labour was all about "helping people make the most of their potential" so it was not dead. |
| And Business Secretary Lord Mandelson told the BBC the Budget had reflected New Labour priorities of a "dynamic economy" and "fairness" on taxes. | And Business Secretary Lord Mandelson told the BBC the Budget had reflected New Labour priorities of a "dynamic economy" and "fairness" on taxes. |
| He also urged people "to judge us in year's time", saying he thought people would look back at the Budget and decide that the decisions taken had been "tough... responsible and fair". | He also urged people "to judge us in year's time", saying he thought people would look back at the Budget and decide that the decisions taken had been "tough... responsible and fair". |
| The new rate, announced by Chancellor Alistair Darling in his Budget statement on Wednesday, breaks Labour's 2005 manifesto pledge not to raise income tax for high earners during this Parliament. | The new rate, announced by Chancellor Alistair Darling in his Budget statement on Wednesday, breaks Labour's 2005 manifesto pledge not to raise income tax for high earners during this Parliament. |
| 'Gained the most' | 'Gained the most' |
| Mr Darling said it was necessary to help pay for declining revenues during the recession, with the government expected to borrow £175bn this year. | Mr Darling said it was necessary to help pay for declining revenues during the recession, with the government expected to borrow £175bn this year. |
| The government estimates the higher rate will raise £1.13bn next year. | The government estimates the higher rate will raise £1.13bn next year. |
| Speaking at a Prince's Trust event in east London, Mr Brown said: "The point that I think we have got to accept is, if we are going to give people opportunities they need for the future, then there has got to be a contribution by those who have the most and who have gained the most over the last few years. | Speaking at a Prince's Trust event in east London, Mr Brown said: "The point that I think we have got to accept is, if we are going to give people opportunities they need for the future, then there has got to be a contribution by those who have the most and who have gained the most over the last few years. |
| KEY POINTS 50% tax rate for earnings over £150,000Big debt and deficit increasesEconomy shrinks at record ratePublic spending squeeze plannedBooks not balanced until 20182p on fuel, 1p on a pint of beer and 7p on cigarettes£15bn public sector 'efficiency savings'Claw back tax relief on top earners' pension £2bn help for young unemployed£1bn to boost housing market£2,000 car scrappage scheme At-a-glance: Budget 2009 Analysis: Election countdown Tax rise as UK debt hits record Press verdict on Darling's Budget Send us your comments | KEY POINTS 50% tax rate for earnings over £150,000Big debt and deficit increasesEconomy shrinks at record ratePublic spending squeeze plannedBooks not balanced until 20182p on fuel, 1p on a pint of beer and 7p on cigarettes£15bn public sector 'efficiency savings'Claw back tax relief on top earners' pension £2bn help for young unemployed£1bn to boost housing market£2,000 car scrappage scheme At-a-glance: Budget 2009 Analysis: Election countdown Tax rise as UK debt hits record Press verdict on Darling's Budget Send us your comments |
| "This is not taxation for its own sake; it is tax for a purpose. This is Britain fighting back against the international recession. This is Britain taking bold action for recovery." | "This is not taxation for its own sake; it is tax for a purpose. This is Britain fighting back against the international recession. This is Britain taking bold action for recovery." |
| Mr Brown said he remained committed to the values which defined the New Labour project in the 1990s, which he had a key part in designing. | Mr Brown said he remained committed to the values which defined the New Labour project in the 1990s, which he had a key part in designing. |
| This was aimed at extending the party's support base by proving it was economically competent and not in favour of increasing taxes on higher earners. | This was aimed at extending the party's support base by proving it was economically competent and not in favour of increasing taxes on higher earners. |
| The new higher income tax rate - an increase on the 45% proposed in last year's pre-Budget report - was brought forward a year by Mr Darling to begin in April 2010. | The new higher income tax rate - an increase on the 45% proposed in last year's pre-Budget report - was brought forward a year by Mr Darling to begin in April 2010. |
| The Conservatives are expected to face pressure from grassroots members to promise to scrap the measure if they come to power. | The Conservatives are expected to face pressure from grassroots members to promise to scrap the measure if they come to power. |
| But shadow chancellor George Osborne told the BBC: "I can't promise to reverse it. I'm sorry, but I can't give that promise." | But shadow chancellor George Osborne told the BBC: "I can't promise to reverse it. I'm sorry, but I can't give that promise." |
| 'Not being honest' | 'Not being honest' |
| He said Labour had "completely messed up the finances of the country", adding: "Yesterday all that you got was a fantasy Budget - a claim that you could deal with the country's massive debt problems by simply taxing people over £150,000. | He said Labour had "completely messed up the finances of the country", adding: "Yesterday all that you got was a fantasy Budget - a claim that you could deal with the country's massive debt problems by simply taxing people over £150,000. |
| "I don't think the chancellor is being honest with the British people about that and what they want from the Conservative Party, hopefully the next government, is some honesty, some straight talking about the problems this country faces and the answers." | "I don't think the chancellor is being honest with the British people about that and what they want from the Conservative Party, hopefully the next government, is some honesty, some straight talking about the problems this country faces and the answers." |
| Shadow chancellor George Osborne on how he would get Britain out of the recession | Shadow chancellor George Osborne on how he would get Britain out of the recession |
| Mr Osborne said taxes on high earners were not his "priority", but added: "I don't agree that long-term higher marginal tax rates are good for the economy. Tony Blair used to say that." | Mr Osborne said taxes on high earners were not his "priority", but added: "I don't agree that long-term higher marginal tax rates are good for the economy. Tony Blair used to say that." |
| In the Budget, Mr Darling predicted the economy would return to growth by the end of 2009, expanding by 1.25% next year and 3.5% in 2011. | In the Budget, Mr Darling predicted the economy would return to growth by the end of 2009, expanding by 1.25% next year and 3.5% in 2011. |
| He said the UK would have to borrow a record £175bn this year as he announced measures for reversing the sharpest contraction of the economy since World War II. The figure is far higher than previous predictions. | He said the UK would have to borrow a record £175bn this year as he announced measures for reversing the sharpest contraction of the economy since World War II. The figure is far higher than previous predictions. |
| The International Monetary Fund put forward the more pessimistic prediction that the economy would shrink by 4.1% this year and by 0.4% next year. | The International Monetary Fund put forward the more pessimistic prediction that the economy would shrink by 4.1% this year and by 0.4% next year. |
| Mr Darling said experts had made a "wide range of forecasts" and that his was within this. | Mr Darling said experts had made a "wide range of forecasts" and that his was within this. |
| Asked whether government spending had been unsustainable, he said: "The fundamentals of the economy, the strength of our economy - despite what is happening just now, I remain confident we can seize those opportunities and that is the vision I've got for the future. | Asked whether government spending had been unsustainable, he said: "The fundamentals of the economy, the strength of our economy - despite what is happening just now, I remain confident we can seize those opportunities and that is the vision I've got for the future. |
| BUDGET FORECASTS Growth - Minus 3.5% in 2009, rising to 1.25% in 2010 and 3.5% in 2011Debt - Doubles to 79% of GDP by 2013Deficit - Rises to £175bn for two years before falling to £97bn in 2013/14 SNP attacks spending 'cut' Wales faces £416m budget squeeze NI reaction to Darling's Budget | BUDGET FORECASTS Growth - Minus 3.5% in 2009, rising to 1.25% in 2010 and 3.5% in 2011Debt - Doubles to 79% of GDP by 2013Deficit - Rises to £175bn for two years before falling to £97bn in 2013/14 SNP attacks spending 'cut' Wales faces £416m budget squeeze NI reaction to Darling's Budget |
| "Today doesn't look good in terms of headlines and I've been resigned to that for some time, but I believe we have reason for confidence and we should not get ourselves into a reason of believing otherwise." | "Today doesn't look good in terms of headlines and I've been resigned to that for some time, but I believe we have reason for confidence and we should not get ourselves into a reason of believing otherwise." |
| Liberal Democrat Treasury spokesman Vince Cable said the Budget figures were "utter fantasy". | Liberal Democrat Treasury spokesman Vince Cable said the Budget figures were "utter fantasy". |
| He added: "I just didn't understand where this spectacular growth rate, this 3.5% which they're assuming a year from now... came from." | He added: "I just didn't understand where this spectacular growth rate, this 3.5% which they're assuming a year from now... came from." |
| The Institute for Fiscal Studies said that, when investment was taken into account, the Budget would mean a 0.1% real terms decline in public spending. | The Institute for Fiscal Studies said that, when investment was taken into account, the Budget would mean a 0.1% real terms decline in public spending. |
| By 2017/18 the cost per family to bring the Budget back into balance would be £2,840, it added. | By 2017/18 the cost per family to bring the Budget back into balance would be £2,840, it added. |