As it happened: Pre-Budget report

Watch the pre-Budget report in full

By Justin Parkinson

1825 On that note, it is time to end our live text coverage of what looks to be a momentous day for the UK, both politically and economically. Please join us again for prime minister's questions on Wednesday, when Gordon Brown and David Cameron look set to go head-to-head over the chancellor's plans.

Nick Robinson
1820 BBC political editor Nick Robinson says the chancellor has taken "a huge bet using your money". If Mr Darling succeeds, Labour will get a fourth term in government, but if he does not the Conservatives will win the next general election, he predicts.

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1814 Lib Dem supporter Alix Mortimer's reaction:This 0.5% on National Insurance. I smell another 10p fiasco. NI already hits lower earners disproportionately hard, with a current rate of 11% on your earnings between about £6,000 and about £40,000, and then 1% above that. What is this "offsetting" which will miraculously absolve those earning below £20,000 from being hit? Very over-complicated. Read more on Lib Dem Voice.

1811 Matthew Elliott, chief executive of the TaxPayers' Alliance, says: "An immediate VAT cut is welcome for families and businesses, but the prospect of large tax rises in the future is very worrying. To recover from this crisis we need permanently low taxes, not a crippling debt mountain and higher tax to come."

1808 Derek Simpson, joint general secretary of the Unite union says: "Today's pre-Budget report gives Britain a reason to be optimistic this Christmas and beyond. This is a welcome warm-up exercise after 30 years of inaction and neo-liberal economics."

1749 Across the Atlantic, US President-elect Barack Obama has been naming his economic team. Using rhetoric rather similar to Mr Darling's, he says: "The reality is that the economic crisis we face is no longer just an American crisis; it is a global crisis - and we will need to reach out to countries around the world to craft a global response."

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1745 Tory MP Douglas Carswell's blog from inside the Commons chamber:Three or four times Speaker Martin rose to tells Tory MPs not to raise voices as the chancellor spoke. Not once has he done likewise as Labour MPs heckle George Osborne. Zero objectivity. Zero sense that the Commons' job is to hold ministers to account. Either he's too dozy, or he thinks his job is protecting ministers from scrutiny. Read more on Douglas's blog.

1742 Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, says the government has an "extremely difficult task" - to encourage confidence, get people spending and yet show those outside the UK that the proposed increase in tax rate to 45% is not a disincentive to working in the country.

1737 On a tumultuous day in politics, the FTSE 100 index of leading shares closed at 4152.96 - up 372 points or 9.84% .

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1735 Have Your Say "Please can you tell me how this will affect me and my carer. I am disabled - there was no mention of our benefits. I heard about tax cuts and VAT reduction for the elderly and children, but nothing for disabled people and their carers."
Graham Coe, Chippenham, UK

1732 Mr Darling's plans are storing more problems up for the UK economy, former Conservative chancellor Lord Lawson tells the BBC. The current troubles are the "hangover" after the "credit binge", he adds. The VAT cut is "neither here nor there", Lord Lawson adds.

1720 Liberal Democrat leader Nick Clegg says Mr Darling could have "rebalanced the tax system for good" but did not. This was a "great pity", he adds. He tells Sky News the chancellor scored "barely five" out of 10 for his pre-Budget report.

1717 Chief Secretary to the Treasury Yvette Cooper tells the BBC that the government has "been straight" with people.

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1716 Labour MP Tom Harris gives his reaction on his blog: A comprehensive stimulus package... the chancellor had much to say about (and to give away to) home owners, those who don't yet have a home, those without a job, those in work, pensioners, parents, small businesses, medium-sized businesses, large businesses… you get the picture... A lot of politics, too: he repeated that the current crisis is global, not British... The most controversial announcement, I admit, is on proposals to raise the higher rate of tax. This is not the death of New Labour... it's about a new political culture. Read more on Tom's blog.

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1715 Reaction from Tory supporter Phil Hendren on his Dizzythinks blog: Yet again we are being told that we are in a "good position". Nobody really believes that. Apparently the Government has fixed the schools and hospitals in Britain... that is nonsense... the recession over within the next 18 months according to the Chancellor. A hostage to fortune? He's going to pay his child tax credits increases early. Slight problem, the uptake of tax credits is appallingly bad. Read more on Phil's blog.

1712 Professor Peter Spencer, chief economic advisor, Ernst & Young Item Club This statement says more about the shocking state of the public finances inherited by Alistair Darling from Gordon Brown than it does about the recession or the measures he's taking to try to deal with it. The recession now hitting hard, we're looking at public borrowing reaching a cool £118bn, 8% of GDP next year. In 2012/13 he is still going to be borrowing £70bn - that's almost £50bn more than he anticipated for that year back in April.

1708 Former deputy prime minister John Prescott says the PBR was "extraordinary" and that there is "clear division" between Labour and the other parties. Ex-Tory leader Iain Duncan Smith says the national debt will double and that borrowing next year could be £150bn, rather than the £118bn predicted by Mr Darling. Former Lib Dem leader Sir Menzies Campbell calls the event a "big wasted opportunity".

1708 The atmosphere in the Commons chamber has quietened, with many MPs filing out. BBC political editor Nick Robinson says the pre-Budget report is designed to offer a definite "choice" between Labour and Tory policies. There is not a "bombshell" in terms of a surprise, but there will be a "shock" for many when the changes kick in, he adds,

1707 Former Conservative Chancellor Ken Clarke tells MPs the recovery will be "long and painful", under the course of action planned by the government.

Iain Watson
1707 BBC political correspondent Iain Watson: Vince Cable for the Lib Dems - the man who once seemed to be a doom-monger for predicting a credit crunch - says income tax rather than VAT should have been cut.

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1647 Labour supporter Hopi Sen's blog:So here's the choice. Do we want to push the economy forward, help consumers with lower VAT, offer tax relief for middle income households, lower fuel prices, have up front capital spending and help for small businesses? Or do we want to do nothing and hope that low interest rates will solve the problem eventually? Read more on a blog from the back room.

Vince Cable
1644 Liberal Democrat Treasury spokesman Vince Cable says income tax cuts for low earners would be more effective in stimulating the economy.

1642 There is much shouting and ill feeling in the chamber, with the Speaker repeatedly warning MPs to behave.

1640 Mr Darling says the shadow chancellor has shown he is "not prepared to take any action".

1638 Families will be worse off under the chancellor's plans, Mr Osborne says. The Tories offer "fiscal sanity", he adds, amid a frenzied atmosphere.

1635 Mr Osborne says Labour has "forgotten past mistakes" and should show fiscal responsibility.

Iain Watson
1631 BBC political correspondent Iain Watson: The shadow chancellor tries to portray the government's measures as a way of digging themselves out of the 10p tax hole rather than genuinely boosting demand in the economy.

1632 The shadow chancellor says the prime minister "did not fix the roof when the sun was shining", to Conservative cheers.

1631 Mr Osborne rubbishes Labour's record, saying it was "ludicrous" of the prime minister to say he had "abolished boom and bust".

1630 Mr Osborne says chancellor's statement is "all about the political cycle and not the economic cycle".

Iain Watson
1629 BBC political correspondent Iain Watson: And there's the first use of the 'tax bombshell' attack by shadow chancellor George Osborne - that was a hugely successful campaign strategy against Labour in 1992.

Iain Watson
1628 BBC political correspondent Iain Watson: The chancellor ended there on a highly political note - the pressure is now on his opposite number to sound statesman-like and political at the same time.

1626 Shadow chancellor George Osborne is addressing MPs. He says Mr Darling will double the national debt to £1 trillion. He is leaving an "unexploded tax bombshell", Mr Osborne adds.

1626 The state pension for single people will rise from £90.70 a week to £95.25 next April, the chancellor says as he brings his statement to an end.

1625 The increase in child benefit will be moved forward from April to January.

1624 The pension credit will increase from £124 to £130 a month for single people, the chancellor says.

1624 Mr Darling says the new vehicle excise duty bands will be phased in. The maximum increase next year will be £5.

1623 So a quick round-up. VAT to be cut from 17.5% to 15% for a year from next Monday - but alcohol and tobacco rates won't be cut. If Labour wins the next election National Insurance is to go up by 0.5p and a new 45% income tax rate brought up on earnings over £150,000. Darling has slashed growth forecasts for the UK to between -0.75% and -1.25% in 2009.

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1619 Have Your Say "Raise the tax threshold allowing us to keep more of our earnings. Remove VAT from gas, electricity and other utility bills."
Brian Stephenson, Gateshead, UK

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1618 Have Your Say"So a cut in VAT, but he didn't miss the chance to hike up fuel, tobacco and alcohol taxes. Will these taxes be reduced when the VAT rate is raised in 13 months time? I think not."
B, Bury, UK

Iain Watson
1613 BBC political correspondent Iain Watson: A new panel being set up to monitor lending levels is likely be described by the opposition as a rather weak way of trying to get baled out banks to lend more.

1616 The chancellor promises £15m to offer debt advice.

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1616 Have Your Say "Petrol prices are plummeting at the moment. Increasing fuel tax is the right thing to do. I appreciate that might not be popular, but it is responsible."
VP, Gloucester, UK

1615 Reposession should be the "last resort" for mortgage lenders, the chancellor tells MPs. There should be three months' grace for those struggling with payments, he says.

1614 The chancellor says he wants to improve the supply of mortgages. The government "will work up a detailed scheme" by the Budget next spring, he adds.

Iain Watson
1613 BBC political correspondent Iain Watson: The chancellor's threatening of companies with measures to get energy prices down for the least well off - should help stave off demands for a windfall tax from unions and the left wing of his party.

1611 The chancellor says the economic recovery must "support our environmental objectives", with the transition to a "low-carbon world continuing" continuing.

1610 The chancellor says the government will provide an extra £100m to help households improve insulation.

1609 Air passenger duty will be reformed so that those who travel furthest pay most, Mr Darling says.

1608 BBC political correspondent Iain Watson: The National Insurance rise announced of 0.5p is the sting in the tail - a tax rise by any other name. But the new higher income tax rate of 45pc - after the election - will cheer Labour backbenchers even though it raises relatively little cash

Iain Watson
1607 BBC political correspondent Iain Watson: The relief for empty properties has been pushed by many Labour backbenchers and apparently had the support of the chief whip Nick Brown so this defuses a potential labour rebellion as well as helping busineses.

1605 The chancellor promises £1bn for a temporary Small Business Finance Scheme.

1605 The government is closely monitoring banks' commitments to ensure lending facilities for firms are maintained, Mr Darling says.

1604 Mr Darling says small businesses will have a temporary increase in tax relief thresholds for empty properties. There have been reports of firms knocking buildings down to avoid the charge. From today, firms facing difficulties will be able to spread the timetable for paying taxes, he adds.

Iain Watson
1603 BBC political correspondent Iain Watson: The VAT cut is the centrepiece and the chancellor immediately hits out at the Conservatives, suggesting they would do nothing - he will also make permanent the measures designed to help most of those who lost out from 10p rate - the policy most toxic with Labour supporters during Brown's darkest days in the summer.

1601 The Budget will be brought back into balance by 2015/16, the chancellor says.

1601 Alcohol, tobacco and petrol taxes will be raised to offset the VAT cut, Mr Darling says.

1600 Mr Darling says that, from April 2011, a new 45% income tax rate will be charged to those earning above £150,000 a year.

1557 The temporary £120 allowance for people who lost out as a result of ending the 10% income tax rate will be made permanent, with the amount rising to £145.

1556 The chancellor says he would like retailers to pass on the VAT cut as quickly as possible.

1555 Mr Darling says VAT will be cut from 17.5 to 15% until the end of next year, coming into effect next Monday.

Iain Watson
1554BBC political correspondent Iain Watson: Bringing forward spending will shore up support on Labour benches - especially social housing - but many projects are too complex to bring forward quickly

1554 Mr Darling says £3bn of capital spending will be brought forward from 2010/11. This will include housing and road projects, he adds.

Iain Watson
1552 BBC political correspondent Iain Watson: Those efficiency are generally seen as a pain free way of cutting government spending but could lead to civil service job losses in a recession.

1554 The government will find a further £5bn in efficiency savings in 2010/11, the chancellor says.

1553 The chancellor promises to continue "improving" public services and ensuring "value for money".

1552 UK net debt will remain below that of many countries, the chancellor says. Doing nothing would create a "deeper and longer recession", he tells MPs.

Iain Watson
1550 BBC political correspondent Iain Watson: We've just been told borrowing will be 8pc of GDP within two years - that's higher than the percentage borrowed under the Labour government of the seventies. There is Opposition incredulity that everything will be on an even keel by 2015/6, as Darling says it will then be a case of borrowing only to invest again.

1549 Government borrowing will rise to £78bn this year and £118bn next year, Mr Darling says.

1548 From Steve Schifferes, BBC economics reporter: The new economic forecast of growth next year from -0.75 to -1.25% is a sharp turnaround from the previous forecast of +2% growth. Probably the biggest ever.

1548 The chancellor says tax revenues will fall significantly in the near term. It is right to ensure fiscal stability in the medium term, he adds.

1547 Mr Darling says increasing borrowing will help families. The PBR represents a £20bn fiscal stimulus, he adds.

1544 Outlining the economic forecast, Mr Darling says UK GDP growth this year as a whole is expected to be 0.75%. Output will continue to fall for the first half of next year. GDP is expected to fall to between minus 0.75 and minus 1.25% next year, he adds.

Iain Watson
1541 BBC political correspondent Iain Watson: Monetary policy is not enough says chancellor so we will soon get the political dividing line with Conservatives on fiscal policy set out - ie whether its right to borrow to fund short term tax cuts.

1542 The chancellor says inflation is expected to continue to fall.

1540 The chancellor says the UK economy is in a position of "relative strength" compared with rivals. The Conservative benches erupt with laughter. But Labour MPs cheer as Mr Darling says his party "did fix the many roofs that needed fixing".

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1539 Have Your Say "What the government should be doing is tightening its belt, not borrowing yet more money to spend on ever increasing numbers of civil servants."
Charlie, Cwmbran, UK

Iain Watson
1534 BBC political correspondent Iain Watson: The chancellor emphasises the importance of working with other countries - this is part of the political strategy to suggest the Conservatives are out of step with global opinion

1537 The Commons speaker Michael Martin tells Tory MP Michael Fabricant to be quiet.

1535 The government has to work closely with other countries, the chancellor says. The UK will "take the lead" to prevent a recurrence of problems.

Iain Watson
1533: BBC political correspondent Iain Watson Laughter from the opposition as the chancellor insists that financial problems emanated from America and aren't due to homegrown policies- a key political dividing line.

1531 The chancellor says he wants the UK to live within its means and the government to make the slowdown shallower and shorter.

Darling
1531 The statement is under way. Mr Darling says he wants to take "fair and responsible" steps to help businesses and the economy.

1528 The chancellor has entered the House of Commons.

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1526 Novelist Richard Kelly's blog:Today, incredibly, finds Brown and Darling riding a (shaky, treacherous) wave of momentum... I don't believe Cameron believed any of this before his poll lead took a bashing… but it seems he's now prepared to argue only for 'fully funded' tax cuts. Who can afford to wait around for that day that never comes? Meanwhile the Darling/Brown prescription seems to be a short, sharp fiscal stimulus to boost consumption... we the people are going to pay for all of this, fairly soon too. It's all a bit too dramatic, really; a good job that it's only our lives and livelihoods that are at risk here. Read more on Richard's blog.

1513 BBC political editor Nick Robinson tells Daily Politics the VAT cut is designed to have a "confidence effect", even if the impact on people's finances is not necessarily huge.

1511 The chancellor is standing on the steps of the Treasury with his team, all holding copies of the PBR. He refuses to answer questions from the press and broadcasters.

1510 BBC business editor Robert Peston tells the Daily Politics pre-Budget report special on BBC Two that the chancellor is planning to borrow a "colossal" amount.

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1508 Have Your Say "A few months ago they wanted us to save money. Now they want us to spend money."
Ric Gibson

1505 Plaid supporter Ian Johnson's blog:It looks to be a
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very damp squib... the government could cut the amount of income tax paid by standard-rate tax-payers and let that money filter through into the real economy, helping low-earning families and taking a good few people out of the tax trap altogether... Brown and Darling are fiddling while our economy burns. Or will there be a surprise this afternoon? Read more on Ian's blog.

1458 The hacks are assembled outside the Treasury, awaiting Mr Darling and his team.

1445 Business is under way for the day in the House of Commons. It is work and pensions questions time. Tory MP Philip Dunne complains that unemployment is rising in his Ludlow constituency, criticising Labour's management of immigration and the economy. Work and Pensions Secretary James Purnell says he understands why people are worried about the economic situation and that the government is working to combat problems. Labour MP Peter Hain says things were far worse under the Conservatives, and that the Thatcher and Major governments did not do enough to alleviate the situation. This feels like a practice for the main themes to be debated later.

1438 Labour MP and Commons Treasury committee chairman John McFall says a lot of the fiscal stimulus package will pay for itself in increased tax returns for the government from money injected into the economy. But his fellow committee member, Tory MP Michael Fallon, tells Sky News that this will only mean one or two billion pounds, which is no more than the interest on the total amount of borrowing.

1437 The New York Stock Exchange has opened, with a large Father Christmas figure from the department store Macy's ringing the starting bell. Mr Darling has been known to play Santa at Christmas parties for children, giving out presents with an air of festive jocularity a million miles from his public persona. Will the electorate feel as grateful as the kids come this evening?

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1422 Conservative MP John Redwood's blog: What should Mr Darling do today? He could begin by apologising for the leaks. He is right to delay his increase in profits tax on small business and the extra vehicle excise duty on cars we already own - better still just to cancel those proposals... nothing is going to work to reflate the economy unless the banks work... He should revisit the capital adequacy framework, the interest rates and the support package for the banks. In that lies the answer to the credit crunch, not in the level of VAT.
Read more on John Redwood's blog.

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1421 Labour MP Tom Harris's blog: The right-wing blogs are having a collective hissy fit... I can't make up my mind whether it's because they're genuinely upset at the prospect of the government's economic plans being successful (which we all hope for, don't we, people?) or because they reckon today's announcements will bag the next election for them. If the latter, why the ostentatious outrage?
Read more on Tom Harris's blog.

1419 In the US, President-elect Barack Obama is due to name his economic team. We already know that Timothy Geithner, the New York Federal Reserve president, is to become Treasury secretary, while Lawrence Summers, a Treasury Secretary under former President Bill Clinton, will take over the National Economic Council. It is reported that Mr Obama wants to push for tax cuts for low and middle-income households.

1413 The FTSE 100 index of leading shares continues to have a good day. It is up almost 5% in today's trading.

1411 For the Conservatives, shadow work and pensions secretary Chris Grayling says his party will not comment on what is in Mr Darling's pre-Budget report until all the "smallprint" is pored over. We can still expect some heated exchanges in the Commons chamber, though.

1408 The grey skies over Westminster have turned blue. It should be just under an hour until Mr Darling, briefcase in hand, and his fellow Treasury ministers emerge from 11 Downing Street, before making their way to the Palace of Westminster.

tweet
1400 Lindapierre: on TwitterWhat about prices, will this be a reality to "normal" people or only to rich people? Read more on Twitter

Darling
1357 Whoever Mr Darling uses for his shadow-boxing, with just over an hour and a half to go, the tension is building. The report is already written and, one suspects, so is the accompanying statement. It must be like waiting to make a wedding speech to a crowd of hostile in-laws - and all in front of millions of people.

1356 A couple of weeks ago, shadow chancellor George Osborne let slip that Tory leader David Cameron prepares for prime minister's questions every week by getting shadow schools secretary Michael Gove to impersonate fellow Scot Gordon Brown. I wonder if Mr Darling is using a member of Labour's frontbench team to pretend to be Mr Osborne? Another youngster, one suspects. Energy and Climate Secretary Ed Miliband? Culture Secretary Andy Burnham? Or, before his afternoon espresso, Cabinet Office Minister Liam Byrne?

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1344 Have Your Say "I would like to see the government offer more help towards childcare costs for working parents. I work full-time and cannot afford to pay for childcare as the cost is too high."
S Begum, London, UK

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1343 Lib Dem supporter James Graham, Quaequam Blog: I'm cautiously optimistic about the rumoured plan of a 2.5% drop in VAT... If spending on the high-street is down a couple of percentage points, dropping VAT by about the same amount could save real jobs... In my personal utopia, we wouldn't have it in the first place... Cameron and Osborne have rubbished it. That should surprise no-one because VAT is the tax of choice for the Conservatives. Read more on the Quaequam Blog.

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1332 Have Your Say "This will be the first time I vote Conservative. I work 100 hour weeks for my salary of £150K+. I am not a banker, I don't speculate and I don't borrow. I only buy what I can afford and now I am being asked to bail out many who are profligate."
KL, London, UK

Robert Peston
1331 BBC business editor Robert Peston says borrowing is rising to levels not seen outside of wartime. He says that Alistair Darling faces a "really tricky balancing act" in trying to get people to spend any extra money from short term tax breaks if they fear future tax rises.

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1324 Have Your Say "This is short term thinking in a blatant attempt to bribe the electorate."
Irene, Newcastle, UK

1322 Shadow Leader of the House Theresa May says there should be a Commons debate on the pre-Budget report before the pre-Queen's Speech Parliamentary break: "This is the most important Budget or pre-Budget statement for many years, yet the House of Commons is shutting up shop for a week without a debate. This is unacceptable. The government should hold a debate in Parliament before the House rises."

Nick Robinson
1312 BBC political editor Nick Robinson tells BBC One's lunchtime news that it will not just be the very rich in the firing line - anyone in work is likely to be facing higher taxes at some point in the future, he says.

1308 Here's how Radio 4's news at 1pm put it: Gordon Brown has been defending his plans to borrow billions of pounds to revive the economy with tax cuts and extra spending. In a speech to the CBI, he said that extraordinary times required extraordinary action. The Chancellor, Alistair Darling, is expected to announce an immediate cut in VAT in the Pre-Budget Report later this afternoon - funded partly by a deferred tax rise for the highest earners. The Conservatives have accused the government of losing control of the public finances.

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1301 Phil Hendren, Dizzythinks blog: If Gordon Brown does decide to sting us with massive rises in the national insurance contributions we make to claw back his profligacy in spending, then he really would be walking into the Tory charge of a bombshell... Perhaps we should rename him the DFS Prime Minister because it all sounds like a sofa sale... Read more on Dizzythinks

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1245 Following on from Mr Darling's reported comment that his statement will be presented in language "your mother could understand", I asked whether that would be necessary if one's mother was a Nobel Prize-winning economist. Jimmy from Warrington, Cheshire, emails to say that all Nobel laureates in economics have been men. Oops.

1243 From the CBI conference "I had a breakfast this morning and nobody mentioned it. Anyone who has a job where he earns £150,000 a year will find it difficult to grumble about a 5% tax rise during an economic downturn. I can't imagine that this would be an election issue per se. The money raised from such a measure would be small beer in the greater scheme of things - it's more of a signal that we are moving in another direction from other competitive economies."
Sir Mark Moody-Stuart, Anglo American chairman.

1237 A recap for those just joining us. Chancellor Alistair Darling is due to deliver the pre-Budget report at 1530 GMT. Among the measures expected to be included is a temporary cut in the VAT rate from 17.5% to 15%. Mr Darling is also planning to introduce a 45% income tax rate for earnings above £150,000 a year - to be brought in if Labour wins the next general election. There are reports he will increase the "period of grace" before lenders repossess homes to three months and scrap plans to increase vehicle excise duty for another year. The Tories are warning of a "tax bombshell" if the government borrows too much.

1235 From the CBI conference It'd be a dreadful mistake not because entrepreneurs would end up paying more tax - most of them would never reach the £150,000 annual earnings threshold that is widely banded about - but rather more because of the psychological impact such a tax hike would have. They want to feel that if they get there, it won't be taken away from them.
Simon Atkins, managing director of Biz Wiz Books

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1226 Toranika: on Twitter I am wondering what today's pre-Budget report will bring and how much taxes will have to rise later . Read more on Twitter

1225 A little bit more about the workings of the PBR. There will be no motions or votes and there is no set length for the debate, though it typically lasts up to about an hour and a half.

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1223 Have Your Say "There should be massive investments in renewable energy for homes and industry. This would solve the jobs crisis and the climate crisis at the same time."
DG, Devon, UK

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1222 Susan, W Yorkshire, GrimmerUpNorth blog: For over 11 years Labour Governments have refused to increase direct taxes - that's all changed with the current economic crisis... the fact that the Government is prepared to open up a clear divide between them and the Tories and use taxation as an election battleground is to be welcomed. Read more on GrimmerUpNorth.

1220 Lib Dem Treasury spokesman Vince Cable says any tax cuts should be concentrated on income tax for those on low pay.

1219 Former Conservative cabinet minister John Redwood says his party will not support an unfunded cut in VAT.

1218 Labour MP and former transport secretary Ruth Kelly tells BBC Two's Daily Politics the chancellor's statement will bring a "significant stimulus" to the economy.

Nick Robinson
1216 BBC political editor Nick Robinson tells Daily Politics the chancellor is promising a statement in simple language that "your mother could understand", rather than a load of complex jargon. What if your mother is a Nobel Prize-winning economist?

1206 The dire warnings go on and on. Consultancy firm Capgemini says UK electricity generation has fallen to its lowest level in 10 years and that a shift to more environmentally friendly generation could mean power shortages in the "near future". But the National Grid says lowered demand caused by the credit crunch should make the situation "more comfortable".

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1157 Have Your Say "Cut duty on fuel and everything will get cheaper. What's the point of putting more money in people's pockets if all they spend it on is fuel?"
Adrian Harvey, Middlesborough, UK

1152 The Environment Agency has called for a "green New Deal", increasing the energy efficiency of homes and making greater use of sustainable power sources. In his CBI speech earlier, Mr Brown hinted at more announcements along these lines in the PBR.

1146 On its front page, the London Evening Standard proclaims: "Brown goes for broke." The newspaper says the prime minister is "gambling a fortune of borrowed money to beat the slump". Meanwhile, its City editor, Chris Blackhurst, says Mr Darling "is in dreamland" if he thinks a VAT cut and creating a 45% income tax rate for earnings above £150,000 a year "will make the slightest difference" to the situation.

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1135 Conservativehome blog about 45% tax rate: Iain says: "The Conservatives should NOT make this a totem issue." Jennifer Wells says: "We mustn't be diverted from our key messages". Comstock says: "Shame it's not 50%." The Bishop Swine says: "40% is historically low and they can afford it." London Tory says: "This will hit floating, aspirational voters in target seats." Western Star says: "It has always amused me to hear us described as "The Nasty Pasty" when it is Labour, red in tooth and claw that has always scratched and picked at the class divide." Richard J says: "All those earning over £150K should go on strike." Read more on Conservativehome.

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1137 Have Your Say "Over-priced housing is the cause of the problem: 25% of people's salaries go straight to repayments. Regulation of the housing market is required, starting with a mandatory devaluation of all house prices and outstanding mortgages"
Godfrey Bartlett, Essex, UK

1136 News from the City. Barclays says it is on course to secure shareholder backing for a £7bn fundraising that could put almost a third of the bank into Middle East ownership.

1135 Spare a thought for the UK's publicans. Not only is the financial climate looking bad, but the weather itself is adding to their misery. A poll for The Publican newspaper found that 75% of pubs blamed the terrible summer for much of the downturn in trade over the past year, ahead of 68% who cited the credit crunch.

1127 It's not just the UK which is experiencing a build-up of excitement. In Paris, French President Nicolas Sarkozy is due to meet German Chancellor Angela Merkel to discuss a co-ordinated, Europe-wide package to combat the economic downturn.

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1127 Have Your Say "The emphasis needs to be on job creation and stepping up investment in public infrastructure is the obvious route"
Dick, Penzance, UK

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1126 Have Your Say "If the government wants to help small businesses and halt falling house prices, why don't they cut corporation tax for small businesses and remove stamp duty?"
Carl Roberts, Manchester, UK

1118 Liberal Democrat Treasury spokesman Jeremy Browne says the government is planning to borrow too much. He adds that the money borrowed should not be spent just on tax cuts, but could go towards projects like building more social housing.

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1116 Have Your Say "Surely we do not have so many people earning over £150K that taxing them 5% more is going to solve the crisis of debt in the future."
Ian, Bristol, UK

1115 CBI director general Richard Lambert says the chancellor has to give a "credible route map" for returning to balanced government budgets. Mr Brown and Mr Cameron have "completely different" plans, in contrast with a more consensual approach in recent years, he adds. The Conservatives were worried about inheriting a difficult situation, Mr Lambert says.

1113 With almost four and a half hours to go until Mr Darling starts to deliver his pre-Budget report, a point about etiquette. The House of Commons treats it like an ordinary ministerial statement. So, after Mr Darling speaks, his Tory and Lib Dem opposites, George Osborne and Vince Cable, will address MPs. This is unlike the Budget, where party leaders follow the chancellor.

1103 The weather at Westminster is grey and cold. There must be a shiver or two a few miles away at the Bank of England, where four Greenpeace protesters have climbed onto the Bank of England to call for more investment in environmentally friendly technology. The chancellor is currently briefing the cabinet on his plans. Shivers down a few spines there - or some old Labour hearts warmed?

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1102 Jdc, Labourhome: The Tories... have no plan whatsoever to soften the recession... they're actively barking. Cut public spending? When the private sector is shrinking? Make up the difference by bigger cuts in interest rates, when the problem is that we're reaching the limit of what the world is prepared to lend to the UK private and individual sector anyway? Read more on Labourhome.

1058 Amid all the speculation over the PBR, the FTSE 100 index of leading shares is up almost 4%.

1054 Asked why he has not done more to counter Labour's economic policies, Mr Cameron says the Conservative Party has given "consistently strong warnings" on the level of government debt. He says the fact that the recession in the UK is deeper is because the economy has become unbalanced in recent years.

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1053 Have Your Say "Unless this government seriously looks at getting the housing market moving it will collapse. They need to reduce the stamp duty on the middle to high-end properties."
John Walker, Essex, UK

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1052 Have Your Say "Why has there been no mention of cutting public spending? Why should those in the public sector be cocooned from the effects of the recession?"
David, Huddersfield, UK

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1051 Have Your Say "The suggestion that the VAT reduction will come in time for Christmas will surely completely stall sales in the high street for the moment. I for one won't be purchasing the higher value items on my list now"
Robert, Reading, UK

1046 Cities need strong, independent mayors to help restore the health of regional economies, the Conservative leader says.

1042 Answering questions, Mr Cameron says the government has to be imaginative. The UK's budget deficit is enormous and ministers are borrowing for a "short-term boost", which will do little to stimulate the economy, he adds.

1038 The Conservative leader says the government's "warm words" on deregulation are "meaningless". It is time to build an economy that is "built to last" and less reliant on just a few sectors, he adds.

1034 The Tories would end Labour's "spendaholic culture", Mr Cameron says. He argues that an independent Office of Budget Responsibility should be established to monitor taxation.

1031 The prime minister should stop misrepresenting Conservative policy, Mr Cameron says. The gap between government revenue and expenditure is likely to be a "mind-boggling" £80bn this year, he adds.

1029 Mr Cameron says blaming the crisis on events in the US alone is "nonsense". He promises the Tories would allow small businesses to delay VAT payments by 10 months.

David Cameron
1027 David Cameron is speaking to the CBI conference. He jokes that the prime minister has given the absent CBI secretary general a "Glasgow kiss".

1024 A little pre-Budget report fact. It was introduced by Mr Brown, as chancellor, in 1997. At the time he promised it would "help build the foundations of shared understanding" between government, business and the public. Mr Darling, accused by critics of setting a "tax bombshell", will be praying he achieves this later.

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1013 Have Your Say "How on earth are all the details of this in the public domain 24 hours before they are announced? It is another great example of how these inept politicians are attempting to govern by leak, secret briefing and spin. This kind of thing should remain confidential until it is announced."
Nick Harvey, London, UK

1013 Mr Hammond says the reports of a rise in income tax for people earning more than £150,000 will not fill the financial "black hole" created by Labour's plans.

1011 For the Conservatives, shadow chief secretary to the Treasury Philip Hammond warns of a "tax bombshell" if Mr Darling's borrowing plans go ahead. He says it is not obvious that a cut in VAT will change people's behaviour.

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1009 Have Your Say "Tax cuts and lowering VAT will make no difference when people are fearful of losing their jobs. Protecting jobs by encouraging small business and reducing National Insurance for employers would be the real stimulus."
Paul, Aberdeen, UK

1008 Despite Mr Brown's joke to the contrary at the CBI conference, BBC political correspondent David Thompson says the PBR "will have the prime minister's fingerprints all over it".

1003 CBI president Martin Broughton has criticised the government for apparently divulging details of the pre-Budget ahead of the chancellor's statement to MPs, saying: "The Treasury appears to be leaking like a sieve."

1001 The impact of the economic slowdown continues to be felt - luxury car company Aston Martin has said it will extend its planned Christmas shutdown for another two weeks. This follows a scaling back of manufacturing by Honda, Jaguar Land Rover and Mini.

0956 The prime minister gets more applause from CBI delegates as he leaves the stage. Conservative leader David Cameron addresses the conference soon, with Business Secretary Lord Mandelson expected to give a speech shortly after Mr Darling unveils the pre-Budget report this afternoon.

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0954 Have Your Say "The government plead with us to 'shop our way out of the crisis', yet they forget that most people who are in difficulty got there precisely because of their own uncontrolled shopping on credit urges."
Nick, Reading, UK

0953 The CBI's director general, Richard Lambert, asks a question about the future relationship between business and government. Mr Brown says the UK must have the best skills base possible, ensure better technology is developed and encourage a spirit of entrepreneurship.

0949 The government wants to continue investment in infrastructure, including high-speed rail, the PM says.

0948 Mr Brown says the government has no desire to be a permanent shareholder in banks.

0946 The PM says he wants co-ordinated action by leading economic powers. The government will show a "path to fiscal stability" in the PBR, he adds. We're expecting a new 45p tax rate for earnings over £150,000 to be one part of that "path".

0943 Mr Brown says his government will have strong relationships with the administration of US President-elect Barack Obama after he comes to power in January next year.

0942 Having said that, the prime minister says there will be announcements later on VAT paid by businesses on empty properties.

0940 Mr Brown is taking questions from CBI members. He jokes that the "man with the power" is the chancellor as he says he cannot announce details of the pre-Budget report yet.

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0938 Have Your Say "Cutting VAT will only reduce the revenue to the government. There will be no 'spending spree', leaving the government in a larger financial hole."
Nic, Windlesham, UK

0937 This is a time for confidence, Mr Brown says, if Britain is to emerge stronger from the crisis. The speech ends to applause from CBI members.

0936 Mr Brown says the pre-Budget report - due to be announced in the House of Commons at 1530 GMT - will include support for "new investment in the low-carbon economy".

0934 There is scope for the government to increase borrowing, Mr Brown says. He cites the American New Deal of the 1930s. The government will act to help ensure small businesses get access to funds, he adds.

0932 The plan for recovery is "broadly based", Mr Brown tells the CBI conference. Tax policy and interest rate cuts must be co-ordinated to maximise their impact.

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09.20 Richard Hyslop (Federation of Master Builders), Conservativehome blog:Those suggesting that the UK Government cannot lower VAT below 15 per cent are wrong. The UK Government can currently lower VAT to five per cent on anything it wishes provided there is a social goal attached... in the last Budget, page 86 of the Red Book, there was a commitment to reduce VAT from 17.5 per cent to five per cent for repair and maintenance work for properties that are considered "hard to let or hard to sell". Read more on Conservativehome.

0931 Mr Brown says mistakes were made in the recessions of the 1980s and 1990s. The best way to ensure taxes are lowered in the long term is to boost the economy now, he adds. The fiscal stimulus - to be unveiled by the chancellor later - will be temporary, the prime minister says.

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0930 Have Your Say "Increase the tax rate for higher earners and increase the tax free allowance. This would help everyone, but help the lowest earners the most. Don't tinker with VAT, that won't achieve anything."
Helen, Fleet, UK

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0929 Have Your Say "A VAT decrease will not necessarily see a reduction in the cost of goods and services because the margins of suppliers are being eroded already. It will be impossible to ensure that prices go down as this is left to the supplier."
Jarrod, Leeds, UK

0928 Mr Brown attacks calls for protectionism. It is not the time to "become prisoners of old dogmas of the past", he says. Monetary policy alone cannot be relied upon to pull the country out of a downturn quickly, he adds.

0927 The prime minister says the world economy is likely to double in size over the next 20 years. The UK must not be "frozen into inaction" by the scale of current challenges, he adds.

Gordon Brown
0926 Mr Brown says the "global flows of capital" must be complemented by more transparency in the way markets works and warns against an over-reliance on oil.

0925 Mr Brown is speaking at the CBI conference. He praises the "dynamism" of British business and says it is time to look at the "scale" of the problems facing the global economy.

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0918 Andy Ray, Labourhome blog: I suspect and hope that the Tories, in desperate times, will rather recoil back to their true doctrinaire corner and oppose (the reported new higher rate of income tax for earnings over £150,000) and take a McCain Joe-the-Builder type scare-mongering stance, albeit in vain! Read more on Labourhome.

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0916 Have Your Say "People are suggesting that a cut in VAT is going to help everyone with the weekly shopping. Can I just remind everyone that VAT is does not exist on food, therefore the weekly shop will remain unchanged."
Nadine, Oxford, UK

0914 What do we know already? It has been widely reported that the government will temporarily reduce the VAT rate from 17.5% to 15% to encourage spending. The chancellor is also expected to extend the £120 rebate for low earners who lost out through the abolition of the 10p income tax rate. There are reports there will be moves to increase the "period of grace" before lenders repossess homes to three months and scrap plans to increase vehicle excise duty for another year. The BBC also understands that people earning over £150,000 a year could pay 45% income tax after the next general election, if Labour wins.

0912 Good morning. After all the speculation over Chancellor Alistair Darling's pre-Budget report, the day of delivery is upon us. The main announcement, in the House of Commons, starts at about 1530 BST. But before then leading politicians, including Prime Minister Gordon Brown and Conservative leader David Cameron, give speeches at the CBI conference. We will be reporting on all the key events as they happen, bringing you the reaction and expert analysis. We will also publish a selection of your comments as the day unfolds. You will be able to watch all the big speeches live on this page.




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