Live coverage of the chancellor's pre-election Budget and what it means for construction
12:20pm It looks as though Darling is set to scrap Stamp Duty. Brian Green: 'For less than a billion quid it takes out about half of all transactions but only affects 20% of the tax take. It will be felt most broadly in places like the Midlands where any of the key marginals are. '
12:35: Alistair Darling: 'There are tough choices ahead that will shape our society for decades to come'
- £2.5bn package of investment in small business, infrastructure and key skills partly paid for by tax on bank balances.
12.40: 'We need to support trade and take forward structural reforms'.
12.42 Banking reform:
- Treasury has already received £8bn in fees and charges from banks
- Banker's bonuses tax has raised £2bn 2009/10
- Support for an international tax on banks not unilateral action
- Economy has contracted 6% in UK over the recession
12.47 Job market
- Unemploment is lower than in Europe and US, 1.6m people unemployment claimant count because of the efforts to keep people in jobs. Expanded the job centre plus network. 4 million people off the claimant count this year.
- Looking at scrapping default retirement age
- Garantee of training scheme for younger people looking work for until March 2012
12.50 Stamp duty
- Helping first time buyers by doubling the limit to £250k from tonight for two years. Nine out of 10 first time buyers will not pay any duty at all.
- Increase stamp duty 5% for properties over £1m for two years to pay for helping first time buyers.
12.55 Forecasts for growth
- 2010: 1-1.5%
- 2011 3-3.5%
- 2012 unchanged
Brian Green: 'The growth forecasts for GDP of 1-1.5% in 2010 and the slightly downgraded forecast of 3- 3.5% for 2011 are high compared with the consensus view of most independent forecasters. They provide a median view of GDP growth of 1.1% for 2010 and 2.1% for 2011'
12:57 Fuel duty increase
- 1p in May
- 1p in October
- rest of increase in January
- Forecast PSBR fallen from £178bn to £167bn for 2010.
- Deficit to be halved over four year period.
- 'Would be wrong and dangerous to cut public spending now'.
- Duty on beer wines and spirits will increase 2% from midnight on Sunday. Duty on cider will increase 10%.
- Freezing the inheritance tax threshold for another 4 years.
13.05 Public spending
- Cutting support now would take demand out of the economy, 2.2% real-terms increase. Can maintain improvements in hospitals and schools. Will honour spending guarantees for frontline services.
- The next spending round will be tough, have identified savings of £20bn. Departments will publish today how they will make these savings. Will relocated civil servants away from London, 15000 posts will be moved in next five years.
- Reform the benefits system - reform of housing benefits from october next year involving excluding most expensive properties to save £250m.
- Plans to sell the Dartford crossing.
13.12 Growth of the economy
- 'We can't take growth for granted [...] Government has a crucial role in building our countrie's strengths. Working to invest in infrastructure.'
- Over next year RBS and Lloyds will provide £94bn of new business loans to SMEs. New credit adjudication service for SMEs declined credit.
- £2.5bn support for small business to boost skills and innovation
- A national investment corporation called the UK Finance for Growth to oversea £4bn of support for businesses,
- Growth Capital Fund will ultimately provide £500m of finance to growing businesses.
- Will increase by 15% the amount of government work to go to SMES
- Improve government's payments to businesses - 80% of invoices to be paid in five days
13.17 Business rates to be cut for one year from October, 345,000 businesses will pay not rates at all
- Doubling tax allowance to £100,000 for investment in machinery and plant.
- Not increasing main rate of capital gains tax.
13.19 Investment in infrastructure
“The government will take forward plans for a high-speed rail line running to the Midlands and on to Scotland. Crossrail, Heathrow and high-speed rail will support 100,000 jobs.”
- £100m for repairs to local roads
- £285m for motorway improvements including hard shoulder running
- Bank to control £2bn of equity for green transport and energy, particularly off shore wind power and £60m for ports to support off shore wind power.
13.33 Brian Green: 'The profile of borrowing in the forecast looks very much healthier than the picture painted in the Pre-Budget Report, with the annual deficit tracking between £10 billion and £20 billion lower than previously forecast.
This may provide some reassurance to the City, but the forecast for deficit reduction rests on what might be seen as very ambitious rates of growth for the economy.'
13.35: David Cameron: 'The stamp duty cut has been a Tory policy for three years'
'Labour have made a complete mess of the economy'
'Business investment is falling by 5%'
13.40: Graham Kean, head of public at EC Harris:
'Although no news on VAT changes – what about sustainability? One idea could be to reduce VAT to zero on all construction associated with environmental sustainability and affordable warmth measures. Why not go even further and combine it with reducing VAT on improvements to existing properties to help soften the blow of reduced pockets all round? This could have a marked impact on workload for SME’s and local / regional contractors.'
'We need real action to get our economy moving'
'Independent experts say the economy will grow 2.1% not the chancellor's 3.5%. We need independent forecasts'
'Rise in national insurance which is a tax on everyone.'
'We need lower small business tax.'