Who would want to be Alistair Darling today? Facing a borrowing deficit of up to £200bn and an economy in dire recession, I bet he is wishing that the government had put something away for the rainy days we find ourselves in.
Six months ago Darling predicted in his pre-Budget report that government borrowing would rise to the then jaw-dropping figure of £118bn this year and that the UK would experience a brief and shallow recession with GDP predicted to fall by 0.75 and 1.25% in the first two quarters of 2009 before a return to growth.
Thank you to our panel of experts for taking the time out today. They are:
David Bunker, Close Print
Marcus Clifford, BPIF McInnes Corporate Finance
Paul Holohan, Richmond Capital Partners
Nicholas Mockett, Europa Partners
Mark Nelson, Compass Business Finance
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That's it, some help for businesses investing in capital equipment and hopefully effective measures to boost credit insurance but not too much else for printers at first glance. Much of the business investment seems to be directed towards high tech business. Check back later for a full analysis of what the Budget means to the print industry and leave your reaction below.
Paul Holohan, Richmond Capital Partners, says: "The absence in any movment in CGT is to be commended as this would in effect have been a tax on entrepreneurial activity."
Marcus Clifford, BPIF McInnes Corporate Finance, says: "I hope we get a few more building blocks before the end of the budget presentation as business stimulus seems a bit impoverished so far."
Mark Nelson, Compass Business Finance, says: "Increase in fuel duty will have an adverse effect for all, particularly the financially challenged families filling their tank will increase and food costs are likely to increase as transport costs go north."
13:19 Telecommunications, advanced manufacturing and low carbon sectors seem to have been the main beneficiaries of the chancellors budget so far
Mark Nelson, Compass Business Finance, says: "No change in National Insurance increase is a tax on jobs, bizarre!"
13:19 increase in statuatory redundancy pay to £380 a week
13:18 April next year, child tax credit increase by £20, £100 a year extra for disabled children's Child Trust Fund
13:17 measures announced today are the "building blocks of recovery"
13:15 Carbon emissions to be cut by 34% by 2020
Marcus Clifford, BPIF McInnes Corporate Finance, says: "Capital allowances should never have been taken away last time but we are seeing need to support investment which delivers greater efficiencies being part of the bundle of measures to support change and growth."
David Bunker, Close Print, says: "Capital allowances at 40% is very good news but the real benefits of this will be for companies earning taxable profits. This good be good news for UK machinery dealers and manufacturers."
13:13 Strategic Investment Fund announced, £750m mostly to high tech businesses
13:10 extra funding for broadband investment
13:10 Capital Allowance doubled to 40% for 2009/10 to encourage business investment
13:08 bringing forward measures to drill oil from the North Sea
David Bunker, Close Print: "£16bln of asset sales to invest in business? I hope this isn't public property sold at a discount. Remember Gordon Brown sold 400 tonnes (half of reserves) of Gold at a $256 level."
13:06 £500m of financial support to build houses, £100m for local authorities to build energy efficient housing
13:05 Reform to banking system to increase transparency and reduce risk taking
Nicholas Mockett, Europa Partners, says: "As expected there is increased tax and reduced pension benefits for the high earners to fund the budget deficit. These have an impact on people earning £100k or £150k, which these days would allow you to secure a mortgage of £450k, enough to buy a small terrace house in Clapham. This may have an impact on the entrepreneur and private investment."
13:04 £1bn investment to fight climate change
13:02 Set a goal of £16bn of property and asset sales for capital investment in public services, but spending to fall to 0.7 of GDP from 1.1 this year
Marcus Clifford, BPIF McInnes Corporate Finance, says: "The halving of budget deficit in such a defined time is a bold statement to make but underlines the huge political pressure to show they are in control as confidence is very l0ow in ability to manage the economy."
13:00 Alcohol and tabacco duty up by 2% from today, revenue of £6bn to be raised. Fuel duty is expected to rise by 2p per litre from September
12:58 50% tax rate for highest earners announced, on those earning above £150k
David Bunker, Close Print, says: "£175 Billion. That some overdraft! I suspect they may be repeating Gordon Browns mistake as a Chancellor in that their forecast for reducing this probably includes future taxes receipts that will ONLY arise if the economy comes back on track in line with forecasts.....in banking terminology this is know as HOPE value"
12:57 Going to stop people avoiding tax, taking measures to ensure that tax is paid by the rich
12:56 National debt to be 79% of GDP by 2012/13, so much for the Golden Rules! Debt will fall in 2015/16
Nicholas Mockett, Europa Partners, says: "I am worried about the effect of the steps to help home owners. Seema Shah, property economist at Capital Economics, thinks that house prices have a further 25% to 35% to fall. By encouraging first time buyers onto the ladder at this point they may be being set up for a fall from which they may never recover.
"If the fundamentals of the housing market point to a former bubble and current over valuations patching up the market just defers the problem and drags it out over a longer period. Therefore damaging consumer confidence for longer. Not to mention the cost to the tax payer from subsidising property speculators who went long on the bubble market."
Marcus Clifford, BPIF McInnes Corporate Finance, says: "Tax relief for prior losses is a good thing and hopefully the rules and guidelines will be clear, albeit epect a lot of work for tax advisors to fight for reclaims."
12:55 Borrowing to be £175bn this year and £173bn next year, less than predicted
12:55 estimates that the cost of the bank bailout scheme will be 3.5% of GDP
David Bunker, Close Print, says: "Trade credit insurance is very interesting. Will this mean that the Gov' will step into help Paper companies ease terms or continue to support printing businesses if the trade credit insurance companies pull cover?"
12:54 "Around the world, government debt is rising sharply"..
Marcus Clifford, BPIF McInnes Corporate Finance, says: "The issue so far is what will be delivered at the coal face to help jobless and fund training. In the past good ideas but getting money to where its needed proves difficult-too much bureaucracy in the way."
12:53 On to public finances...this is going to hurt
Paul Holohan, Richmond Capital Partners, says: "Deferred tax needs to be consistently delivered in all geographical areas. This is currently not the case."
12:52 Scrappage scheme confirmed, that was "leaked" over the weekend
12:51 Trade credit insurance scheme to help business who face reduction in cover to be launched
12:50 On to business now - ability to defer tax delayed, loss making companies can continue to reclaim tax up to £4,000.
Extending the help which allows loss making companies to reclaim tax on past profitable years. This will be available until November 2010 – over 100,000 businesses will have their losses wiped out.
12:50 Stamp Duty Relief on sub £175k properties extended
12:49 Taking action to boost mortgage lending
12:48 "Want to do more to reduce the number of reposessions"
12:47 £260m of new money going to training, From January everybody under 25 who has been out of work for 12 months will be offered a job or a place in training.
Marcus Clifford, BPIF McInnes Corporate Finance, says: "A crucial issue is the ability of BoE to manage inflation/deflation equation at macro level in an economy that is making myriad of micro decisions to survive, amplified by global picture."
12:46 On to employment now, Job Centre Plus hailed as a success and £1.7bn funding put towards support for the umemployed
12:45 Current borrowing deficit to half over four year, no indication of what it is yet though...
David Bunker, Close Print, says: "The Chancellor has mentioned that banks will continue lending this year to support business. The banks however, I suspect will remain firm to their underwriting criteria. Despite his mention of reduced BOE base Rate to 0.5%,
"I'm not convinced this has shown through and increased business loans. There is a Bank of England report that details that growth in total outstanding loans to businesses has slowed since the beginning of 2008. It also mentions that there may have been a reduction in loan applications due to the possible fear of triggering a review of lending terms."
12:44 Retail Price Index to fall to -3% by September
12:43 1.25% growth in 2010. Growth will come from green industries and scientific base, move away from financial services hinted at. Growth a 3.5% in 2011 - laughter all round
12:42 "British economy is flexible and diverse, confident in recovery"
12:42 1.6% contraction in Q4 2008, same prediction for this Q1 2009. 3.5% contraction over the year. Ouch! Lots of heckles from the Tories.
12:41 "No country is immune", a lot of focus on how the whole world is in the same boat so far
Paul Holohan, Richmond Capital Partners, says: "'credit flowing again'... this is not happening yet!"
12:40 Economic measures to protect half a million jobs
12:38 VAT cut to remain in place until December
Marcus Clifford, BPIF McInnes Corporate Finance, says: "i wonder how many times this has been practised and rewritten."
12:37 "Getting credit flowing essential", "banks will lend more". £20bn fiscal stimulus is helping he claims
12:36 Exports in the UK down 14%, not as bad as Germany and Japan though Darling claims
12:35 Economy to grow again towards the end of this year; double in size over the next 20 years
12:33 "We will not repeat the mistakes of the 1930s"
12:31 Budget will "build on the strength of the economy"
12:30 Darling takes to the stand, first mention of "global recession" immediate
Marcus Clifford, BPIF McInnes Corporate Finance, says: ""Will the budget achieve a boost to the economy and balance the need to reduce future and current budget defecits? This is the biggest juggle ever."
12:25 More rowdy than usual in the Commons, they are smelling blood.
12:18: PM sidesteps a question about the predicted level of public borrowing.
12:15: The PM is facing questions ahead of the Budget which kicks off in around 15 minutes.
Marcus Clifford, BPIF McInnes Corporate Finance, says: "My great hope in this budget and its one that needs to show tangible and structural solutions to the predicament we all know we are in, is that it recognises not just the service and high tech economy but the fundamental manufacturing community of businesses that still contributes to the overall economy."
