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Budget will reveal plans to cut deficit, says Alistair Darling
Joe Murphy, Political Editor2 Mar 2010
The Budget this month will show a “clear direction of travel” towards halving the record £178 billion deficit, Alistair Darling said today.
Speaking to the Evening Standard as uncertainty over Parliament's ability to deal with the debt crisis sent the pound tumbling for a sixth straight session, the Chancellor indicated that he will give more detail about how efficiency savings will be implemented in his plan to halve the nation's annual borrowing.
“People rightly want to hear from us a clear direction of travel,” he said. “I will say more about that at the time of the Budget.”
He confirmed that the long-awaited review to set departmental budgets for the following three years will be delayed until the autumn, saying: “We cannot risk a spending review now because there is so much uncertainty around.”
After days of antagonism between him and the Prime Minister, Darling turned his guns on the Conservatives for what he called “contradictions” about future cuts.
He called on George Osborne to clarify Tory plans for child tax credits to be axed from better off families, arguing that Tory figures suggested that people on middle incomes like teachers and police officers could lose out.
Osborne has said only households with an income of £50,000 or more would lose out from the plan.
Shadow Treasury Secretary Philip Hammond says that the measure would save £400 million to go towards the Conservative campaign to cut the record £178 billion deficit.
However, Darling said that to raise £400 million, child tax credits would have to be taken from families with a combined income of a modest £31,000 or more.
“That's not much if you live in London,” said Mr Darling. “The Conservatives either have a black hole in their proposed savings or they are planning to hit people on modest incomes.
“Either George Osborne is right in telling us what is going to happen or Philip Hammond is,” the Chancellor said.
Darling's attack comes days after he caused a furore by accusing Downing Street of unleashing “the forces of Hell” at him.
But he moved to patch up relations by saying he and Gordon Brown were as one in their basic beliefs.
“People can have their ups and downs while being very united in their ambitions to see the country through to economic recovery,” he said.
Philip Shaw, economist at Investec, said of Darling's plans: “He talks of halving the budget deficit over a period of four to five years, but that is not ambitious enough.
“Given where we are starting from, that would still leave the Government borrowing 5%-6% of GDP which is clearly too much.”
Reader views (6)
"We cannot risk a spending review now..." -- what planet does this idiot live on?
- Paul, Milton Keynes, UK, 03/03/2010 04:09
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I pray that this will be Labour's last Budget. Ever.
- Will, Bristol, England, 02/03/2010 16:05
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Not another, "Road Map," Pleaseeeeee. He has put off until Autumn what cuts there will be in the public sector, so all of this is a load of meaningless tosh. I thought Darling was better than this. The markets certainly won`t like it.
- Brian G, Norfolk Gorleston, 02/03/2010 15:22
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Couldn't agree more with Andyr. The other point that Andyr hasn't explianed is that, to achieve this reduction, good old Gordon and his Darling do not have to do much, other than hope the economy starts to pick up. The economy increases, more Paye taxes and fewer benefits paid, greater receipts from VAT and other taxes, = less borrowing by these two clowns. Nowt to do with Govt strategy. We are back to the 'Form of Words', as Marx said 'The bigger the lie, the more it is repaeted, the more truthful it becomes' or something like that. Smoke and mirrors anyone? It's the same for all the main parties, which is why anyone who says, like Vince Cable, that we should reduce the debt quicker gets my vote!!!!
- Alan, carlisle uk, 02/03/2010 15:18
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They run the country into the ground and now they tell us they will dig it out again. If, you believe that you will believe in flying pigs. Don't judge us on our record - judge us on our intentions. Yeah right mate!
- Frederick, London, 02/03/2010 14:26
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Lets just be clear what he is talking about. I wish reporters were more careful in how they report this!
He is saying they are going to reduce the annual *borrowing* requirement from 178 billion to around 90 billion. A year.
The deficit still goes up by 90 billion a year in year 4 and by much more in years 1 to 3.
Only the yearly borrowing requirement goes down.
Its like saying i need to put 100 quid a month on my credit card to survive, but i'm going to reduce that to 50 a month. You still have the original credit card debt, and it is still increasing by 50 a month!
We need the economy back in surplus so we can repay the existing debt.
Dont forget a few years ago we were worried when we were borrowing just 40 billion a year! The level of mismanagement is criminal.
- Andyr, St Ives, Cambs, 02/03/2010 13:27
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