Chancellor hints at no new spending cuts in Budget – but is tight-lipped on tax

THE Chancellor, Alistair Darling, yesterday signalled that he will not be announcing new spending cuts in his Budget due to be revealed next week.

However, he refused to rule out any new tax rises amid concerns in the drinks industry that they are to be hit with double-digit duty increases.

He hinted at what might appear in his Budget as the trade unions ratcheted up pressure on him not to cut public spending.

In a piece in today's Scotsman, the Scottish Trades Union Congress calls on the Chancellor instead to concentrate on tackling unemployment and ignore business leaders. It argues that the pain should be suffered in the constituencies of bankers whose greed is responsible for the recession.

Yesterday Mr Darling admitted the Budget would be "critical" in deciding the general election result. "Of course it is important because the decisions we take that will affect the next five, ten, 20 years are pretty critical to the big decision, the big choice the country will make whenever the election is called," he said.

"Crucially we have got to plan now to ensure we get growth for the future because growth is what brings jobs, jobs are what will bring rising living standards." Asked if he would give details of spending cuts, he said: "I will carry on spelling out what we have done, and the progress that we are making both on supporting the economy and reducing our borrowing levels, the deficit levels; that is important.

"But I have always said that, because of the uncertainty we have seen over the last 18 months, it would have made no sense to have been doing a (comprehensive] spending review at that stage.

"We won't do one before the election, but of course one has got to be done this year because our current spending runs out at the end of March 2011."

However, Gordon Brown later suggested there will be an indication of how the 1 trillion deficit will be tackled even though a spending review will be delayed until next year. He said: "When people see the Budget, they will see the plan for the future which includes the halving of the deficit.

"We've got that under control, we've taken action to deal with the debt that comes as a result of the recession, but at the same time we're not going to cut frontline services for health and education and policing."

Meanwhile, the Tories' shadow chancellor, George Osborne, insisted his party would cancel a proposed 50p tax for higher earners proposed by Labour. Mr Osborne, who has been described as out of his depth, received support from a former chancellor, Ken Clarke. The shadow business secretary said David Cameron "would be out of his mind" not to make Mr Osborne chancellor.

There were signs in Scotland yesterday that public-sector austerity measures will be opposed. Senior NHS staff have acted angrily to the Scottish Government's decision to cancel their bonuses.