No time for optimism, Mr Darling

The macro figures – £175bn of public borrowing in 2009/10 and £173bn in 2010/11 – are as bad as expected and potentially worse, as this is based upon very optimistic GDP forecasts for 2010. Most forecasters are forecasting marginal growth or contraction for the economy in 2010 and if the chancellor is too optimistic, then tax revenues will be significantly lower than expected and expenditure – social security payments – will be considerably higher. The problem with this is that it means that either public borrowing will be even higher than expected next year or capital spending will be cut. Potentially both. And this could have a significant impact on a construction industry already enduring its worst recession on record.

Help is there for the housing sector, which has been decimated in the last 18 months. However, given the fall that housing has endured, it is still a relatively small boost and it is disappointing that the government has not reduced VAT rates on repair and maintenance work.