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Optimistic about the future

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Nick Robinson | 12:51 UK time, Wednesday, 22 April 2009

Alistair Darling is clearly determined to use his Budget speech to tell the country a story about why the economy is in the mess it's in and about the help that the government has already given. That's why he took nine minutes at the top of his speech before revealing any forecasts or making any policy announcements.

He is also determined to look optimistic about the future - predicting a return to growth "towards the end of the year". If he's right and the first quarter of resumed economic growth comes at the beginning of 2010, the figure would be unveiled just days before a general election.

UPDATE, 13:06: The new 50% top tax rate for those earning over £150,000 is designed to put the Tories on the spot - do they back it or pledge to reverse it? Since it will be introduced before the next election, they will have to say.

If they attempt to swerve this political trap they will face criticism from some in their own party and in the Tory press who will demand that they protect "our people".

Comments

  • Comment number 1.

    And if he's wrong, the figure would be unvieled just days before a general election. This is a big political gamble.

  • Comment number 2.

    Fantastic, so we can look forward to lots of spin at the beginning of 2010. The amount of debt has to be paid for at the end of the day and one thing we do know for sure is that this government had accrued massive debts, with the result we now have to take on more debt, and this will continue as they try to spend our way out of the mess. Whoever gets into power next year has a mess to deal with , thanks to Gordon, a weak media, and very few good journalists who have let Labour ruin this country over the past 12 years.

  • Comment number 3.

    This is a joke - tell me its 1st April - PLEASE.
    Clown - Darling r to forecasts as Herod was to children.

    I am FED UP with this biased ZanuLabour leaks and spin from a BBC reporter. I am writing to my MP to complain and ask him to press for an investigation into Robinsons continual leaking of state documents - what happened to Damian Green for doing this.

  • Comment number 4.

    He is a very optimistic chancellor. In the pre-budget report he was optimistic and look where that got us. 50% on people over £150,000? Well there is the sound bite. Tax collected 0. If they get paid that much they will know how to get around the tax or there accountants will.

  • Comment number 5.

    Maybe there will be some growth to report just before the general election and hence some 3 weeks following the release of the Hillsborough files, but the growth will be lower than the 1.25% now forecast by Darling for 2010. This forecast is not just higher than the average of forecasts but higher than the top end of the range of those forecasts.

    And then there is Darling's forecast that the budget will be in deficit by 7% in 5 years time. This is very optimistic given the OECD's estimate that of the UK's 12% deficit this year (11.9% according to Darling) 7.2% is structural, i.e. to remain after the resumption of growth. The 7.2% structural deficit amounts to 100 billion pounds per annum added to the national debt post recession, clearly higher than the sum of the revenue raising and efficieny savings measures just announced.

  • Comment number 6.

    We all know the story of how the country got in the mess it's in, Labour got into power and bankrupted us - nothing new there.

  • Comment number 7.

    Given the restriction on higher tax relief on pensions was leaked well in advance of the budget, will you press Alistair Darling to explain whether he knows who leaked it, and what action will be taken? Such as an arrest by the police.
    Whatever happened to the pre-budget purdah?

  • Comment number 8.

    Well, no excrement Sherlock. He isn't Private Fraser is he, going around shouting "We're doomed". Nice journalism. Gisajob!

  • Comment number 9.

    He spent nine minutes at the beginning of this budget speech explaining why he was presenting a bill on behalf of the Scottish bloke sitting behind him to the left.

    It's disppointing tht after two years of incorrect forecasting by the chancellor the BBC would still rather plug the newlabour line than independent sources that say we shall still be in recession in eighteen months time.

    Call an election

  • Comment number 10.

    Time for an election.

    Let's get rid of these politicians who think that they can lead. They have done a fantastic job of leading up into "another right fine mess". While at the same time they are dipping their hands into the public purse. Time for a change.

  • Comment number 11.

    Bank of England Interest rates since 1694 have never been so low; they commenced at 6%! It seems to me that we are in a depression not a recession and that many people will be affected by the mis-management of this labour gocernment over the past 12 years. My advice to them is to return to Scotland and takes some lessons from Alex Salmon!
    Maybe we should rename our currency to African Bongos? I am sure that interest rates will spike over the next few years as they have done in the past-refer Back Wednesday in September 1992.

  • Comment number 12.

    Over 4 years £606 billion pound.

    Labour has to go and go now!!!

  • Comment number 13.

    Tory press who will demand that they protect "our people". Nick please explain? I thought you reported, not put words into the mouths of newspapers? "our people" could you please tell me what newspaper stated that people on £150k or more were their people?

  • Comment number 14.

    Anyone who retains any respect for the Prime Minister as an individual should watch him now, as David Cameron delivers the opposition leader's budget response speach. Brown, I think acutely aware that the cameras are catching him every now and then as justly withering criticism rains down upon him, seems to have decided that the only image he can leave the public with is one of a man who cares not one bit. So he is pretending to ignore Cameron, gigling, smirking, seemingly sharing jokes with Darling to his right and Yvette Cooper to his left. Anything to try to give the impression he is not listening. The only impression he is leaving with me is of a naughty schoolboy, brought to book but smugly confident that someone else is going to catch the bulk of the punishment that he alone deserves.

    Aside from all the other valid criticisms of him and the actions of his government, Brown demeans the office of Prime Minister. We urgently need him to be gone.

  • Comment number 15.

    50% Top rate Tax...Tories should scrap it...lets face it...anyone earning that amount can afford a really good accountant and lawyer to HIDE their money...

    It was proved under the last labour government, tax rates went up but the tax take went down...then along came thatcher who lowered taxes and amazingly the tax take went up as people paying for expensive ways to hide money didn't bother anymore..! SIMPLE!

    Also, lower taxes encourage spending and £150K+ earners spend more than most!

  • Comment number 16.

    Everything that this inept government does is considered great by Nick Robinson.You are more out of touch than Alistair Darling and Gordon Brown put together.

  • Comment number 17.

    The Government asks you work really hard and do your best for the country. You do.

    The Government lays extra tax on your for succeeding for working hard.

    What's the point of working when you could just sit back and get a better deal.

  • Comment number 18.

    Anyone notice that

    With the largest financial crisis in history - we get shortest budget ?

    No ideas, no solutions, no clue !

  • Comment number 19.

    BBC = LABOUR FLUNKY

  • Comment number 20.

    Government of the living dead.

    Election now, we can't afford another year of ZaNu Labour, we already have a Zimbabwean economy.

  • Comment number 21.

    The new 50% top tax rate for those earning over £150,000 is designed to put the Tories on the spot
    -----------
    New Labour will have to do better than that one, after all this budget shows real optimism, its all based after all on a recovery of 3.5% (by 2011)- but that is if we were in a normal recession; but we're not.

    11 years of Labour spending more than was healthy on the unprofitable public sector has shown through this budget.

  • Comment number 22.

    I am FED UP with biased corporation employees spinning ZanuLabour guff - Clown and Darling - a comedy act of terrifying proportions, and if ANYONE is optimistic it is ME - because not even ZanuLabour can postpone 2010 election - can they???????????

  • Comment number 23.

    Nick

    Good to see your update

    "The new 50% top tax rate for those earning over £150,000 is designed to put the Tories on the spot - do they back it or pledge to reverse it?"

    That's what we like about you, not that Zanulabour have broken yet another manifesto promise, by how it effects the Tories.

    Any Comments on "The chancellor has predicted a huge rise in the total amount of government debt, which he says will rise from 59% of GDP now to 79% by 2013-14."

  • Comment number 24.

    Nothing quite like a `soak the rich' budget. It will help Gordon to reduce his Christmas card list: another saving!

    Why is the income figure for the new higher rate set at GBP 150,000? Perhaps it ought to be reduced to GBP 100,000 so all the high paid public sector managers get included as well.

    Nothing like a bit of equality to get socialism moving along although no measures were introduced to allow me to claim tax relief on my new bath plug. it just isn't fair!

  • Comment number 25.

    You suggested that the 50% tax was designed to put the Tories on the spot over tax.

    That may be the case as higher band tax increases are not as effective as people think, given that those affected find ways to avoid paying it.

    However, as things stand, the Tories are not winning the next election - Labour are losing it. Labour are unable to expose any flaws in the Tories, because they are always on the defensive. A 50% tax rate will not expose the Tories.

  • Comment number 26.

    "Alistair Darling is clearly determined to use his Budget speech to tell the country a story about why the economy is in the mess it's in and about the help that the government has already given. That's why he took nine minutes at the top of his speech before revealing any forecasts or making any policy announcements."

    ===

    In other words: "It wasn't me, a big boy did it and ran away!"

    There, that doesn't take nine minutes.

  • Comment number 27.

    Ha. 50% tax rate on over £150k earners. I laughed so hard coffee came out of my nose.

    Even assuming this extra 10% is ever actually collected, the amount will be too minescule to plug the tiniest part of the gaping black hole that is the current deficit. This violation of their manifesto promise serves 3 purposes:

    1) Vaguely irritate a few of the rich who need to spend a few minutes finding a way not to pay the extra tax.
    2) Satisfy a few people who spend their lives sitting on their backsides and complaining about their lot, allowing them to grin self righteously and announce that finally someone is doing something to help "normal" people.
    3) Put pressure on the Tories to find a response to a completely cosmetic tax, when their is no right answer for them politically.

    Should there not be some kind of law against using fiscal policy for political propoganda?

  • Comment number 28.

    "He is also determined to look optimistic about the future "

    And that's good is it? Determined to believe your own fantasies? You think those figures are accurate Nick? Care to put some of your own money on it, rather than the corporations? There isn't anyone in the country apart from the labour party, or their propagandists, who place any faith in those growth figures. In fact, a challenge - see if you can get one bipartisan analyst to endorse them on the news tonight. Just one.

    Election now.

  • Comment number 29.

    Nick,

    GBP606 billion of borrowing over the next 4 years, and all you can go on about is a trap set by DarlingBrown for the Tories?

    Wake up and smell the coffee!

  • Comment number 30.

    Nick, would you say that you are sympathetic with left of centre politics?

  • Comment number 31.

    The budget has some heroic assumptions on growth. That is the real story. Labour is not taking any of the hard decisions now and leaving them all to the next Government. It is a true betrayl of our country.

  • Comment number 32.

    I am getting fed up with the 'comment' and 'opinion' from the BBC - you are supposed to be impartial news reporters - the clue is in the title NEWS and REPORTER - i.e. you should REPORT the NEWS, not tell us what opinion we should form about it!!! I am not an idiot and perfectly capable of making my own judgements. All you are doing is influencing the minds of those who are impressionable or unable to make their own judgements. Stop it!!!

  • Comment number 33.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 34.

    Shortest budget in History - Who are the 'say nothing - do nothing' Party now!

  • Comment number 35.

    It's easy to tax the small %age of earners over £150k - it's the majority vote that makes a difference. They raise it to 70% and even if they lost all those voters, they would still keep the majority.

    They have messed up 10+ years of growth. Everyone said Labour would do it, and they stayed true to that!!!

    "Stealth taxes" from day 1 too.

    It's no wonder people are leaving this country in their droves.

  • Comment number 36.

    As we see this Government sinking into a slurry of Socialist sleaze we now see the price that we are all (excepting Governemnt ministers on fat pensions) going to have to pay in future for the economic catastrophe that they will bequeath to the next Government (alongside the social, military and diplomatic catastrophes that they have spawned).

    Just one point that needs to be be made in case the journos are too thick to pick up on it - Darling has introduced a top rate of 63% (typically) on those in the £100-150k band. Add together the 45% nominal rate plus the withdrawal of personal allowances plus the tapered reduction on tax relief on pension contributions (assumed contribution level 20% of £150k) - and you will get £31.5k of tax on this £50k of income - hence 63%. And this is before considering the impact of National Insurance - so true tax grab is closer to 75%. Unless of course you are an MP.

  • Comment number 37.

    Says it all really. Alistair and Gordon hardly had the support of Labour MPs. As soon as Alistair sat down most of Labour had gone except for the doughnuting around the front bench. Leaving Alaistair and Gordon, who grinned all the while, covering his embarassment of the last 12 years, to face David Cameron alone. The 50% income tax breaks a Labour manifesto pledge so I should take it up with them Nick - especially as it will affect you. Nothing in there about helping savers, except pensioners. But then what can you do to help people who have been prudent, not got into debt and are getting less than 1% on their savings.
    Best laugh was someone with an old banger over 10 years old being promised £2k off a brand new car. The reason you have an old banger is because you can`t afford a new one. However, if you do the have the money and are buying a new car you could buy a scrappie and trade it in and get a £2k discount. Wonder how many MPs will be doing exactly that with their expenses before they are abolished?

  • Comment number 38.

    I expect Labour feels that soak the rich will be read as soak the bankers and therefore somehow make us forget about all their mistakes over the years - actually this equals soak the entrepreneurs and they are not stupid enough to see their contribution to the economy be used to prop up the sad failure of our sad Government - headlines DO NOT EQUAL good policy. Bring on May 2010 so Gordon can tell us how he cocked it up in his Auto biography!

  • Comment number 39.

    Amount raised from increasing the top rate of tax to 50% is forecast to be GBP100 million.

    Government borrowing (even on Darling's optimistic figures) GBP175 BILLION.

    It's a drop in the ocean.

  • Comment number 40.

    The analysis is that closing the pension loophole and raising the higher rate of tax for £150k+ earners raises less than a billion in total.

    Politics ahead of Country - again!

    The real budget story is the true level of future debt - because the forecasts are based upon a return to growth next year and 3.5% growth thereafter.

    This is just an absolute fiction.

    I said on this blog last autumn that the last PBR was a nonsense (and got shot down by some NuLab supporters for daring to 'talk down the economy' - as if anyone cares what I think) but surely even the hardest NuLab diehard cannot believe these numbers.

    We are so far down the pan light cannot penetrate.

    And by the way, Nick. The higher rate of tax only becomes a story if journos like you accept these easy lunches because you're too lazy to prepare the soil and grow your own.

    In closing - because it seems important to some NuLab contributors on here to know where you're coming from - no, I'm not a higher rate taxpayer.

  • Comment number 41.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 42.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 43.

    in discussing the new 50 pc tax rate, Nick Robinson in this blog is implying (more than implying, he's stating his opinion) that it's been done, not primarily in the National Interest, but in order to put the Clowns on the spot - in other words, that it's nothing but a cynical political ploy by the Government

    and yet here's all you guys getting worked up and citing it as an example of pro Labour spin so outrageous as to make you tear up your licence etc etc etc - what on Earth is wrong with you?

  • Comment number 44.

    More than half a trillion pounds of *new* debt just in the next couple of years, and even that's based on growth forecasts which are in cloud-cuckoo land.

    "Efficiency savings" which make up something like 2 pct of the *new* debt only, and no binning of pointless/expensive government projects in the future.

    No wonder the IMF is warning the UK that we're heading for collapse with our current policies.

    The maths just doesn't add up, but then again that's never stopped them before, and that's why we're now in this mess.

    Marvellous.

    Didn't they do well.

    Good game, good game.

    Maybe they'll use their blankety-blank cheque book and pen to sign the payments to the international markets for our government debt interest payments.

  • Comment number 45.

    Nick

    In the interests of integrity can you give me the source used for your quote "our people", referring to the Tory press and those earning over £150k? Or sources, as it implies that it came from more than one in the Tory press. Thanks.
    I'll take any lack of response to assume you made it up.

  • Comment number 46.

    Nick was putting his comment re the Tories on the screen as Darling was speaking. However, I have just looked at Mr Darling's CV. He is not an accountant but a lawyer. Would it not be a better idea if we had Boards of successful businessmen (not bankers or economists) chaired by the current Chancellor who actually know what they are talking about having planned and run budgets for major corporations. I do not understand why we have this system of unqualified Ministers running departments when they know nothing about their subject. This applies to every government department. The calibre of the current bunch of Ministers is dire and with all parties they play musical chairs like football clubs do with thier managers. The most successful businesses and teams are the ones who have top-flight management. The same should apply to Government. Brown talked about an inclusive Government of all the talents..Try it but not with the Mandelsons of this world as Business Secretary in the Lords...what has he ever achieved in business for instance?

  • Comment number 47.

    Nick
    The Greyfriars Persuasion are really after you today. They're going to scrag you, yaroo. Too much sugar on the cereal this morning.
    Never mind - I'd always credited you with a bit of right-wing bias but at least it made a change from the wimpish objectivity and impartiality of the Express, Mail, Telegraph, Sun, Times and the rest of the Murdoch Media.
    Meanwhile I've grown a heavy stubble waiting for the Dave Plan. I'd really like a viable option to this controlling, puritanical, self-righteous government. All I ask is that it has some kind of cohesive economic alternative to that tabled by Brown, Darling and all. So far all we have is this nice chappie blinking in the headlights and telling us what we already know - we're well in the cack. He hasn't told us how he's going to get us out of it. Being Not Labour may get the Greyfriars mob excited but he will require something more detailed once the election knives come out. True or not, he needs something more than "It was all Brown's fault and I don't know what to do next" if he is ever to bread with the rest of the G20 as our leader. At the moment he looks like a leader who has already finalised his excuses but not his plan. Is he up to it? Where is Davis when you need him?

  • Comment number 48.

    when ?

    Year 2011:

    3.5 % growth, inflation around 2% (real 0.7% increase in government spending) ??

    how ?
    why ?
    where ?
    what ?
    who ?

    ...................must be the mystic Treasury Prayer Mat at work again.

  • Comment number 49.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 50.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 51.

    Oh how I wish I had to pay tax at 50%. Some people don't know when they're well off.

  • Comment number 52.

    This Budget was a wasted opportunity to start bringing public sector borrowing under control. Brown and Darling failed and have effectively consigned this dysfunctional Government to the dustbin of history. They are reckless and have imploded. Yesterday's budget was an obituary for Labour because they are clueless and have imploded.
    The electorate will understand why the Tories must raise taxes and cut back on reckless spending because Labour have left them NO ALTERNATIVE.It is their profligacy that has built the biggest debt in history and virtually bankrupt the country. This massive and unfair debt will take our children the next 40 years to repay. The next election will be fought on those grounds.The electorate are fed up supporting this dysfunctional, greedy, sleazy and wasteful Government. Why should our children be saddled with this debt for the sake of the dysfunctional Brown and lame duck Chancellor Darling? Isn't it always the case with these champagne socialists, they always run out of other people's money.

  • Comment number 53.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 54.

    They cannot address high public sector spending as this is where there supporters and unions are based.

    So this is a fudge and possibly the worst budget in the past 20 years, especially when taken in context of our country being in a financial disaster.

    £ went down against the Euro etc next day and should continue down - no mention of this from Nick and his bbc bu(a)ddies. Even the South African rand is 13 to the £ from 15. Broken Britain and still the bbc praise Broon.

 

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