Alistair Darling has said the UK will have to borrow a record £175bn as he admitted the economy faces its worst year since the Second World War.

The chancellor tore up a key New Labour election pledge by unveiling a new 50p tax rate for earnings over £150,000.

He also cut future spending plans in a Budget which added 2p on fuel, 1p on a pint of beer and 7p on cigarettes.

The package would steer the UK through to recovery, he said. The Tories said the economy was in an "utter mess".

Leader David Cameron said not enough had been done to get spending under control and "Britain simply cannot afford another five years of Labour".

Total government debt will double to 79% of GDP by 2013 - the highest level since the Second World War. The annual budget deficit will rise sharply to £175bn for the next two years.

The Budget received a cool reception in the City with the pound down - and the Confederation of British Industry said it did not set out a "credible and rigorous" path to recovery.

Liberal Democrat leader Nick Clegg said the government "have condemned us to years of unemployment and decades of debt" and claimed Labour had been "desperately rushing around picking up half-baked ideas to save the skin of this failing government".

The new top rate of tax is a change of plan from the pre-Budget report last year in which Mr Darling had proposed a new tax rate of 45%.

It is also being brought in a year earlier than planned "to pay for additional support for people now".

Mr Darling also scrapped tax relief on top earners' pensions.

BBC Political Editor Nick Robinson said Labour had ditched its manifesto pledge not to raise income tax before the next election in an effort to "wrongfoot" its opponents and cheer its core supporters, as well as raising money.

In other Budget measures, fuel duty will increase by 2p per litre in September and then by 1p a litre above inflation each April for the next four years.

Alcohol duties will go up by 2% - about 4p on a bottle of wine and 13p on a bottle of spirits - from midnight.

Mr Darling said the various tax raising measures would raise more than £6bn by 2012.

That would help pay for a real terms boost in pensioners' income - including new pension recognition for grandparents who care for their grandchildren - and help for savers with ISAs.

There will also be a "car scrappage" scheme under which people trading in cars older than 10 years for new ones will get £2,000 to boost the ailing motor industry.

Jobs

And there will be more help to get people back into work quickly and support businesses and homeowners facing problems.

Everyone under the age of 25 out of work for 12 months or more will be offered a job or a place on a training scheme. In addition, the government will create or support up to 250,000 jobs in deprived areas.

Another widely trailed measure confirmed was the extension of the Stamp Duty holiday on properties sold for less than £175,000 until the end of the year as part of a £1bn package aimed at boosting house sales and building.

In his speech, Mr Darling confirmed the economy would shrink by 3.5% in 2009 - far worse than his pre-Budget forecasts.

Public borrowing will also soar to record levels as the Treasury wrestles with a combination of falling tax receipts, higher spending and the cost of bank bail-outs.

But Mr Darling insisted other major countries were suffering a worse downturn.

Spending squeeze

He said the Budget would "build on the strength of the British economy".

The government had been "guided by our core values of fairness and opportunity - and our determination to invest and grow our way out of recession".

But he also made clear his recovery plans depended on a rapid economic bounce-back - with a forecast of 1.25% growth next year rising to 3.5% in 2011.

The Treasury will also bid to close the gap between dwindling tax receipts and soaring spending by selling £220bn in gilts, or government-backed debt - a new record.

And he admitted that the economy would first face a period of deepening deflation with the Retail Price Index falling to a low of minus 3% by September.

The chancellor is also squeezing public spending in the future by saying it will grow by only 0.7% per year from 2011 - a lower growth rate than when Mrs Thatcher was in power.

Despite this the public finances will only balance by 2018 - two years later than previously forecast.

There was also grim news on the jobs front ahead of the Budget, with unemployment figures showing the number of people looking for work has reached 2.1 million - its highest level since Labour came to power in 1997.

The government claimed Scotland would get an extra £104m from the Budget but the SNP said it would mean "a real terms cut in Scottish spending" of £500m that would cost 9,000 jobs.

The Welsh Assembly Government says it is facing a cut of more than £400m in its funding for next year. Opposition parties have called it "a huge blow" and warned that it will have have a major impact on frontline services.

http://news.bbc.co.uk/2/hi/uk_news/politics/8011321.stm

http://www.telegraph.co.uk/finance/financetopics/budget/5202924/Budget-2009-A-savage-and-pointless-attack-on-Middle-England.html

The idiocy, bigotry, tribalism and sheer class hatred of the Budget at least clears up a lingering doubt some seem to have had about the Labour Party. We now know for sure that it not only has no interest in what can be characterised as "middle England", it seeks positively to persecute that constituency for its own political advantage. Our country is in the worst economic mess that anyone under the age of 80 can remember. That mess has been exacerbated by wanton and ignorant policies pursued by this Government. The tax rises announced on Wednesday on the so-called rich show that Labour has no regard for the creation of wealth, and no understanding that its creation is what makes everybody (and not just the "rich") more prosperous. This Budget was a Budget for poverty.

Labour is not interested in improving the country it purports to govern. It is interested only in retaining power. Its policies are shaped increasingly, if not exclusively, by considerations of how it advances the cause of its own people. Those who are not in that category such as most of you reading this column get what is coming to them.

Labour's client base is broad. It starts with its own MPs, to whom it only the day before the Budget offered an expenses deal that will look after most of them very well. It extends through an enormous state bureaucracy and salariat to a generous welfare state. This ever-expanding and ever more propitiated group has to be supported by a shrinking number of those in work, and a shrinking number of those who have saved to provide a decent standard of living. The Budget was inadequate because it sought to deal only with the needs of the clientele, not with the needs of the country.

An election is no more than a year away. The starting gun for its campaign was fired yesterday. At least there is or should be clarity in the battle lines. The middle classes are there to be bled white. Labour is now quite open about that. The question only remains of whether the Opposition will choose to defend the interests of its supporters as robustly as Labour is defending the interests of the clientele.

For be in no doubt about two things. First, the mess in this country which Mr Darling, in keeping with Government policy, chose to depict as having happened almost by accident and as a result of global forces outside his control has been aggravated by the practice of reckless economics. The few of us who saw this debacle coming required no genius to do so: it happened because the then Chancellor of the Exchequer, Gordon Brown, chose between about 2000 and 2007 to allow the money supply to grow by between two and three times the rate of inflation plus growth. This imitation of Alan Greenspan who did the same in America to fulfil Bill Clinton's desire to make as many people as possible feel well off fed our present catastrophe. Money was there to make everyone feel good whether bankers or first-time buyers with silly mortgages. It seemed as though prosperity no longer had to be earned. The printing presses rolled: quantitative easing was happening long before we knew it. And even the Conservative Party, to its shame, was taken in, with its ludicrous line about "sharing the proceeds of growth".

Second, the desire to keep power means continuing to keep the clientele in the style to which it is now accustomed. This means generous benefits that do not become reined in as earnings in the private sector are. It means continuing to create jobs for the clientele in entirely socially unproductive areas. Jobs advertised in yesterday's Guardian for, among others, a "democratic services officer" in Hackney, or a "customer experience manager" for the Department of Work and Pensions give an indication of the care, and the ease, with which public money is spent. It is the Government's determination to continue to bribe its voters that causes not just the wealth-destroying taxes, and a further raid on pension funds, but also the insane levels of borrowing: £175 billion this year and £173 billion next. It was instructive, too, that when the Leader of the Opposition quite correctly attacked the Government for this atrocious profligacy, Mr Brown was pictured sitting on the bench opposite him laughing. It is moments like that that make some think either of strangulation, or emigration.

Wednesday's events were definitive. They showed that Labour has reverted to being a class-based party, and like all such parties is determined to rob the class in which it is not based. Those tens of millions of Britons who work hard, save hard, take responsibility for themselves and make no claim on the state are to be targeted to provide the resources to help Labour secure re-election. The Budget was the most naked attack on the middle classes since the 1970s. By this act of bigotry, Labour has repatriated us to the land of flared trousers, British Leyland and the Bay City Rollers.

Yet it has also, as was intended, put the Conservative Party on the spot. Foolishly, Mr Cameron chose not to reject last November's proposal to raise taxes to 45 per cent for those on more than £150,000 a year in 2011. He now finds Labour is intending to raise them to 50 per cent, and a year earlier; and the same group to be affected by this will also lose tax relief on pension contributions, in another assault on savers. So what does Mr Cameron do? Does he say that the "rich" must be punished for the failings of the Labour government that he hopes to replace? Or does he say that this partisan policy, which will raise relatively little money, is unfair and counter-productive, and will not be persisted with should he come to power after April next year?

The argument seems straightforward. The Conservative Party should not be class based, so it should not favour a tax that hits one section of society so disproportionately hard: after all, we are all supposed to be in this together. It can also argue that the revenue to be raised is minimal indeed, it may turn out to be nothing. The Laffer Curve suggests that if you wish to get more revenue, taxes should be cut, not raised. Also, as we saw in the 1970s, high taxation of the most successful in our society drives not just them, but their businesses, abroad. Of course the books have to be balanced: but there are ways that are not merely fairer but also more effective. Labour's way of doing it is sheer vindictiveness, and with a political purpose: it will do only harm to the country, to the stimulation of demand, to growth and to employment.

It was hard to believe a word Mr Darling said. His forecasts have proved to be worthless, and Wednesday's smelt fictional. His growth forecasts were particularly absurd. Labour's record should speak for itself: destroying wealth, raising unemployment, presiding over waste. Now, though, it seeks to pursue a policy to retain power that puts in the party's sights the very productive and self-reliant people on whom the country must depend for a recovery. It represents a savage and pointless attack on those without whom Britain is sunk.

Mr Darling's failure, like that of the Government he serves, is abject. This is Mr Cameron's moment. And it is not just victory that awaits him if he seizes it, bu

A chit nation takes another chit.

FAWK THEM...!!!

Gotta feed all those lazy phucks on the dole

Hi all, yep the budget was not good and things will get hard for the next few years, but at the end of it we the brits will be stronger for it, but you landos you will always be a little **** that needs to go back under your stone