Darling's pre-budget report delays some rises for 'next government'

Alistair Darling has delivered his pre-budget report. He said he wanted to promote growth without "wrecking" recovery.

He was forced to admit that the recession in the UK had been worse than he predicted last year, and that the economy would shrink by 4.75 per cent in 2009 compared with his Budget estimate in April of 3.5 per cent. The public finances were deeper in the red with a deficit of £178bn this year compared with the £175bn he had predicted.

Although Mr Darling has been under pressure to show how Labour would halve the UK's budget deficit in four years, he said could not give details where the spending axe might fall because the spending review has been delayed until after a general election. However, he did say that frontline public services would be protected.

There will be a one-off tax on bank bonuses over £25,000, which he claimed would raise £0.5bn.

The National Insurance is to go up by another 0.5 per cent, on top of plans unveiled in last year's pre-Budget report to increase the tax by 0.5 per cent in April 2011. However, the National Insurance threshold will be raised so that noone earning less than £20,000 will pay it. Mr Darling claimed the changes would raise £3bn a year.

The CBI attacked the move as an "extra tax on jobs" which would harm the UK's recovery.

Mr Darling said that unemployment would continue to rise for some time, but said that tackling it would remain the government's top priority.

He also announced that a 1p increase in Corporation Tax for smaller companies is to be deferred, leaving the 2010 tax rate unchanged.

It looks like he’s holding back on several things for “the next government” to put in place. I wonder if he’ll regret that if Labour gets back in!