Page last updated at 14:25 GMT, Wednesday, 9 December 2009

Pre-Budget report

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National Insurance will go up by a further 0.5p from 2011 and public sector workers face a 1% pay squeeze, Alistair Darling has announced.

Delivering the pre-Budget report on 9 December 2009, the chancellor also announced a bank bonus tax and a home boiler scrappage scheme.

He said he wanted to promote growth without "wrecking" recovery.

But Mr Darling admitted that the recession in the UK had been worse than he predicted last year.

Shadow chancellor George Osborne, in his response to the statement, told MPs that Labour should "never be trusted" with people's money again, describing the pre-Budget report as a "catastrophe".

Every family in the UK would be "paying the price" for Labour's mistakes, he said, claiming anyone earning more than £20,000 would pay more tax as a result.

Labour pledges on spending and deficit cutting were not "credible", he argued.

Liberal Democrat treasury spokesman Vincent Cable said it was clear from the statement that the UK's economic position was "still very grave".

He said the government had been "over-dependent for its revenues on the fickle fortunes of the banking industry".

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