Alistair Darling will place nuclear and wind power today at the heart of efforts to lead Britain into sustained growth as he sets out the choices voters face in the coming election.
The Chancellor will use the Budget to try to unlock private sector investment to boost jobs and help to harness the energy sources of the future. He will seek to use government support for private companies as a key election dividing line, portraying Labour as safe custodians of a recovery that is as yet too fragile to trust to the Conservatives.
One of the main thrusts of Mr Darlings pre-election statement will be to promise a range of inducements where government will act as a catalyst for private sector projects.
In one the Treasury will plough 1 billion from asset sales into a green investment bank, to be matched by a similar sum from the private sector. The bank would act as a key investor in important infrastructure projects such as nuclear power stations and wind farms as Britain seeks to replace 50 per cent of its power generation over the coming 20 years. Small and medium-sized businesses are also expected to be offered a range of inducements to help them to expand.
Related LinksOn a BudgetThis is a phoney Budget. Bring on the real oneBusiness Editors budget briefingMultimediaLIVE: Budget 2010, minute-by-minute IN FULL: Budget 2010Mr Darling is expected to say that in the heat of the financial crisis the Government made the correct choices, to let borrowing rise and bail out the banks. Labour would also make the right choice about the recovery, he will say, delaying cuts until next year, unlike the Tories.
Mr Darling received a pre-Budget boost yesterday when a survey showed that the public are more optimistic about the economic recovery and are more willing to give the Government credit for its handling of the economy.
The research, for the PoliticsHome website, showed that 45 per cent of voters think the economy has turned or is turning a corner, compared with 34 per cent in January. Forty-one per cent now credit the Government for its handling of the economy, compared with 36 per cent in January.
Mr Darling, in a pre-Budget statement placed on YouTube, set the tone for what could be his final Budget. The economy was at a crossroads, he said, suggesting that it might take the wrong turning if it was placed in Conservative hands. The role of government in helping to pull the country into sustained recovery was vital, he said.
In a forerunner of what is expected to be a key theme of Labours manifesto and election campaign, the Chancellor said: Government can make a difference to the future of our country for the next ten or 20 years. We need to make sure that we work with private companies to build the businesses of the future and my Budget will contain measures to get that growth going.
With Britains public finances in the red at record levels, the Chancellor has none of the room for manoeuvre for pre-Budget giveaways that his predecessor, Gordon Brown, enjoyed in 2001 and 2005. Indeed, Mr Darling returned to the quote that, when he first used it, had unleashed the forces of Hell from Downing Street against him: Britain was experiencing the most difficult circumstances for well in excess of 60 years, he said.
The Treasury has tried to make a virtue of a necessarily workmanlike Budget that ministers have suggested will include no new tax rises nor details of the 19 billion worth of spending cuts that the Government has budgeted for in order to halve the deficit over four years.
Mr Darling is expected to be able to announce that some of the lower than expected spending on unemployment benefits will allow him to cut the deficit from 178 billion to nearer 170 billion.Other unexpected revenue will go into business-friendly schemes.
He received a boost from latest inflation figures yesterday, which fell from a 14-month high of 3.5 per cent in January to 3 per cent last month, official figures showed.
Falls in the prices of games and toys and lower utility bills helped to push annual inflation down, according to the Office of National Statistics.
The figures raise hopes that inflation, that spiked with the return of VAT to 17.5 per cent in January, has peaked and will eventually drop back close to the Bank of Englands target of 2 per cent.
The Tories will warn today that the soaring cost of paying interest on the national debt threatens Britain with a Greek-style crisis. The Treasury is paying 35 billion a year on debt interest, a figure that will rise by 2014-15 to 71 billion. The Tories warned that the figure could rise to more than 100 billion if the markets lost confidence in the Governments ability to service its debts.
A poster to be launched by the Tories today pictures Mr Brown in dinner jacket and Mr Darling as his bride next to the parodied film title: My Big Fat Greek Debt.
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