ALISTAIR Darling is under pressure to announce a raft of eye-catching pre-election giveaways in next week’s Budget, after figures showed the Treasury was on course to borrow less than expected this year.
The Treasury previously said it would need to borrow £178bn in the year to April. But the Office for National Statistics said Darling borrowed less than expected in January and February. This means the shortfall for the fiscal year could end up being between £5bn and £20bn less than previously expected, depending on how much is borrowed in March. This may allow Darling to publish improved forecasts next week and claim to have defied the sceptics.
Sources close to Darling said he was planning to unveil a handful of targeted measures to help the poorest families, paid for by higher-than-expected proceeds from the bonus supertax. But the Treasury is expecting Gordon Brown and schools secretary Ed Balls to push for vote-winning sweeteners to boost Labour’s chances at the election.
James Knightley, an economist at ING, said: “This perhaps gives Darling some room to offer something to the electorate at the budget. Prime Minister Gordon Brown will likely be far more eager for a fiscal easing to boost his chances of re-election. However, Darling… may not want to be pushed around.”