Alistair Darling’s plan to underwrite mortgages could give an important fillip to the property market – he’s hoping to inject £50bn into the scheme – but there are serious concerns that he is being wildly over-optimistic in his forecasts.
All should be revealed on Wednesday when he presents his pre-Budget Report – which in reality is effectively a second budget. It’s been widely reported that he will predict growth of 1 per cent next year. But critics claim it’s a nonsensical figure given that growth will have crashed by around 3.5 per cent this year.
He has to severely prune public spending – cut backs in the NHS and in education are being mooted – but his critics will be waiting to see if has any plans to curb public sector employment which continues to grow.
So-called Town Hall fat cats, gold-plated pensions for state workers, and high-level tax cheats evading their dues by using complicated accountancy ploys are an increasing embarrassment.
Plans to make £15 bn worth of ‘efficiency savings’ have already been announced.
The property market needs to be given a major boost with many first-time buyers being locked out of the market and a million householders in or close to negative equity.
In the past Gordon Brown – when he was Chancellor – targeted pensions. It caused uproar at the time and has had repercussions ever since. Given the scale of the deficit now facing the government pensions could again be in the frame. Higher rate tax relief on pension contributions could be scrapped in a move which would raise up to £7bn.
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