The Pre-Budget Report

Posted on

15.15 This is my 'off the cuff' reaction to what is being said, as it happens.

I'll update it regularly as the afternoon progresses.

15.35 Bank losses will be $3 trillion.

15.40 FSA will look at accounting rules

15.42 Crown Dependencies impose cost without making payment to Exchequer - regulation will be looked at and Commission is looking at this for the spring. But I doubt it is enough.

15.43 £100 billion has been made available to banks. Rights issues will be easier in future though

15.44 Claimant count is 2 million below 1990s - I think he's being optimistic.

15.45 We need a new boost for the economy as there will be a fall in output across the world: growth this year 0.75%. Next year will be in recession, at least for first two quarters but expect -1% growth

15.45 Inflation will be 0.5% next year

15.45 Growth will recover in 2010 - too late for Labour who go to the polls in May 2010

15.46 At least he hits the Tories hard

15.46 Yvette Cooper looks knackered sitting behind him

15.46 £20 billion fiscal stimulus announced

15.47 Claims the rule was met over the last cycle but now we have a new one, and is relaxing them

15.48 Will recover in the medium term he says: has a 'temporary operating rule' to restore balance - I think he means a flipping big loan account - to be repaid by 2015 - 2016

15.48 Confirms 1998 objectives on growth etc

15.48 35% less tax from finance sector this year - that's £4 billion of corporation tax

15.48 Borrowing £78 billion this year and £118 billion next, falling back to 105, 78 and then less. By 2015 will only borrow to invest: that's a long recovery.

15.49 UK net debt up to 57% GDP in 2013, and then back. This is within EU rules: there is no threat on that, and a lot less than many other countries now.

15.50 Invest in economy: will still do it and supply improved services: and will raise money from efficiency savings (but he doesn't say what)

15.51 By 2011 spending will be £680 billion

15.53 We're getting to the nitty-gritty

15.54 £3 billion capital brought forward for motorways, housing and schools + energy efficiency - not really a green new deal - far too little in fact - a mere token gesture

15.55 Will cut VAT - to inject spending - VAT 15% to end 2009 - madness. Happens from 1.12.08. £12.5 billion - back of an envelope. Wants retailers to pass it on. Optimist.

15.56 Measures for low incomes - temporary tax cut for 10p rate will be permanent

15.58 April 2011 will increase all NIC rates by 0.5%

15.59 Raise NIC start point to income tax level

15.59 £150,000 45% income tax from April 2011 - for top 1% of incomes

16.00 Personal allowance will be restricted from £100,000 of income - a recommendation from The Missing Billions. This will be in 2011

16.01 Will increase duties on alcohol and cigarettes so prices do not fall - heavily regressive move

16.02 Economy will be in balance from 2015

16.02 Wants to create foreign dividend exemption and will improve CFC rules

16.03 Small businesses - HMRC will allow tax to be spread - all taxes if business is in trouble - for as long as they need - I hope they staff this properly

16.04 Small businesses need loans - £1 billion available to small businesses

16.05 Small company rate increase deferred

16.06 Loss claims will be carried back for 3 years so long as no more than £50,000.

16.07 Green measures - better targeted air duty - better insulation - but only £100 million - is monitoring retail prices and threatens the companies

16.09 Oil and gas for the North Oil is subject to review

16.10 Wants a low carbon world - £535 million for environmental, rail and insulation - this feels like a double count to me - but he claims he's making 1 million green jobs - clearly he's heard of the Carbon Army the Green New Deal has been promoting

16.12 Mortgage market guarantees - is looking to do this and rebuild the loan backed mortgage market - oh heck - do we want a state backed Granite?

16.13 Want to work out how to help people in work can keep their homes

16.13 Measures will be taken on repossession - no action until arrears have happened for three months - no time at all

16.14 £15 million for debt advice - won't go far

16.15 £200,000 mortgages will be covered when people lose jobs - still seems incredibly low in London

16.15 Cover extended to some second mortgages

16.16 More social housing - essential - however unpopular with some - life is not possible without good housing and it's beyond the means of far too many

16.17 Better training - but this sounds half hearted and I suspect not new

16.19 Cars - will limit some duty increases - I think that's absurd - we need to tackle green issues now

16.20 Saving - saving gateway - 8 million people will get 50p added for every £1 saved - but so cumbersome it's going to have little impact

16.22 Some benefit increases brought forward - but a phone call prevented me hearing what

16.23 Still says will eradicate child poverty - abolishing the domicile rule will pay for this

16.24 Increase in pension credit and pensions - above inflation at highest rate in the year - which is fair

16.25 Child benefit goes up from January - what will I spend it on?

16.26 £60 pension bonus in January

He sits down