This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/8013570.stm

The article has changed 22 times. There is an RSS feed of changes available.

Version 2 Version 3
Opposition label Budget 'fantasy' Opposition label Budget 'fantasy'
(10 minutes later)
Opposition parties have attacked as "fantasy" economic growth predictions contained in Alistair Darling's Budget.Opposition parties have attacked as "fantasy" economic growth predictions contained in Alistair Darling's Budget.
The chancellor said the UK economy would return to growth by the end of 2009, expanding by 3.5% in 2011.The chancellor said the UK economy would return to growth by the end of 2009, expanding by 3.5% in 2011.
But Mr Darling's forecasts have been called "preposterous" and "ludicrously optimistic" by opposition politicians.But Mr Darling's forecasts have been called "preposterous" and "ludicrously optimistic" by opposition politicians.
He said the UK would have to borrow a record £175bn as he announced measures for reversing the sharpest contraction of the economy since World War II.He said the UK would have to borrow a record £175bn as he announced measures for reversing the sharpest contraction of the economy since World War II.
The borrowing figure is far higher than Mr Darling had previously estimated.The borrowing figure is far higher than Mr Darling had previously estimated.
'Fantasy land''Fantasy land'
In his Budget statement on Wednesday, the chancellor predicted the economy would shrink by 3.5% in 2009 - higher than he had forecast in the pre-Budget report - but suggested it would return to growth by the end of the year.In his Budget statement on Wednesday, the chancellor predicted the economy would shrink by 3.5% in 2009 - higher than he had forecast in the pre-Budget report - but suggested it would return to growth by the end of the year.
However his forecasts that the UK economy would grow by 1.25% next year and 3.5% in 2011 were questioned by opposition parties and other groups.However his forecasts that the UK economy would grow by 1.25% next year and 3.5% in 2011 were questioned by opposition parties and other groups.
Within an hour and a half the International Monetary Fund had put forward a more pessimistic forecast for the year - predicting the UK economy would shrink by 4.1% this year and by 0.4% next year.Within an hour and a half the International Monetary Fund had put forward a more pessimistic forecast for the year - predicting the UK economy would shrink by 4.1% this year and by 0.4% next year.
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 recordKEY 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
Mr Darling said he had "good grounds" to be confident because of concerted action taken by countries around the world to boost their economies.Mr Darling said he had "good grounds" to be confident because of concerted action taken by countries around the world to boost their economies.
But the Conservatives said it was a "dishonest Budget" based on "fantasy forecasts".But the Conservatives said it was a "dishonest Budget" based on "fantasy forecasts".
Shadow chief secretary to the Treasury Philip Hammond told the BBC: "The government hasn't taken the opportunity to be honest with the electorate about the scale of the problems today.Shadow chief secretary to the Treasury Philip Hammond told the BBC: "The government hasn't taken the opportunity to be honest with the electorate about the scale of the problems today.
"Alistair Darling is predicting 1.25% growth next year. The IMF is saying the economy will still be shrinking next year, 0.4%."Alistair Darling is predicting 1.25% growth next year. The IMF is saying the economy will still be shrinking next year, 0.4%.
"He's made a prediction of growth the year after which is frankly fantasyland prediction, and all of that has a huge implication for the scale of the problem that he has to tackle.""He's made a prediction of growth the year after which is frankly fantasyland prediction, and all of that has a huge implication for the scale of the problem that he has to tackle."
Lib Dem Treasury spokesman Vince Cable said Mr Darling's figures were "utter fantasy" and his party leader Nick Clegg said the "lamentable failure" of the government to get its predictions right would lead people to believe they were living in a "fantasy world". Liberal Democrat Treasury spokesman Vince Cable said Mr Darling's figures were "utter fantasy" and his party leader Nick Clegg said the "lamentable failure" of the government to get its predictions right would lead people to believe they were living in a "fantasy world".
Tax surpriseTax surprise
The Confederation of British Industry also raised concerns about "optimistic" growth forecasts.The Confederation of British Industry also raised concerns about "optimistic" growth forecasts.
Director general Richard Lambert said: "The key question for this Budget was whether it set out a credible and rigorous path for restoring the public finances to health. The CBI's preliminary judgment must be that it does not."Director general Richard Lambert said: "The key question for this Budget was whether it set out a credible and rigorous path for restoring the public finances to health. The CBI's preliminary judgment must be that it does not."
But the Budget was welcomed by the Unite union, which said it had put "Labour back on the side of working families" and the British Chambers of Commerce, which said there were some "good measures" to help businesses.But the Budget was welcomed by the Unite union, which said it had put "Labour back on the side of working families" and the British Chambers of Commerce, which said there were some "good measures" to help businesses.
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 BudgetBUDGET 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
The Conservatives are expected to face pressure from grassroots party members to say they would scrap Mr Darling's new top rate of income tax of 50% on earnings over £150,000.The Conservatives are expected to face pressure from grassroots party members to say they would scrap Mr Darling's new top rate of income tax of 50% on earnings over £150,000.
In one of the biggest surprises of the Budget, the new rate - an increase on the 45% Mr Darling had planned in the pre-Budget report - was brought forward a year to begin in April 2010.In one of the biggest surprises of the Budget, the new rate - an increase on the 45% Mr Darling had planned in the pre-Budget report - was brought forward a year to begin in April 2010.
If that happens before the next general election, Labour will have broken a manifesto pledge not to increase the top rate of tax during this Parliament, but Mr Darling said it would "pay for additional support for people now".If that happens before the next general election, Labour will have broken a manifesto pledge not to increase the top rate of tax during this Parliament, but Mr Darling said it would "pay for additional support for people now".
The chancellor has also reduced pension contribution relief in an effort to stop big earners shifting more of their salary into their pension fund in order to pay less income tax, but this does not come into force for two years. The chancellor has also said he will reduce pension contribution relief in an effort to stop big earners shifting more of their salary into their pension fund to pay less income tax, but this does not come into force for two years.
BBC political editor Nick Robinson said Labour had ditched its pledge not to raise income tax before the next election in an effort to "wrong foot" opponents and cheer its core supporters, as well as raising money.BBC political editor Nick Robinson said Labour had ditched its pledge not to raise income tax before the next election in an effort to "wrong foot" opponents and cheer its core supporters, as well as raising money.
The Conservatives say, while high top tax rates are "inefficient", scrapping them will not be a priority in the short term.The Conservatives say, while high top tax rates are "inefficient", scrapping them will not be a priority in the short term.
But the Tory Mayor of London, Boris Johnson, told the BBC he was against the new top rate and believed the Tories should "not proceed with it". Mr Darling's public sector squeeze is also likely to come under further scrutiny as opposition parties seek more details of where cuts might come.
"Obviously I understand the very cute political game Labour thinks it is playing but it's a complete gimmick," he said. He said spending would grow by only 0.7% per year from 2011 - a lower rate than when Margaret Thatcher was in power.
Mr Darling's spending squeeze is also likely to come under further scrutiny as opposition parties seek more details of where cuts might come. Budget measures aimed at helping companies include deferring business rate payments, a £2,000 payment to car-buyers who scrap vehicles more than 10 years old and finance help for the construction industry.
He said spending would grow by only 0.7% per year from 2011 - a lower growth rate than when Margaret Thatcher was in power. The director-general of the British Chambers of Commerce, David Frost, said: "I think there's an understanding now from the chancellor that it's business that hauls us out of this very deep recession.
"It will no longer be public expenditure. It won't be the consumer. It will be business. So there are I think a number of measures in there that have the potential to really start to stimulate some business growth."