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Chancellor says Budget will not offer a ‘giveaway’

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Alistair Darling has said that the upcoming Budget won’t be delivering a pre-election giveaway.

It will instead be “sensible and workmanlike”, the Chancellor insisted in a BBC interview.

He did, however, provide a few advance clues as to some of the packages he will be announcing.

Some of the money that will be raised from the state sell-off of the Channel Tunnel rail link will be used to set up a green infrastructure fund.

The fund will provide backing for low-carbon energy projects and a new generation of nuclear power stations.

There is speculation that the Chancellor will also announce a new £500 million capital growth fund aimed at relieving some of the problems that smaller firms have experienced accessing finance in the aftermath of the credit crunch.

Further assistance for SMEs may come in the form of a specific target for the amount of government business that should be awarded smaller businesses and the creation of a government-backed venture capital fund.

“A little bit of government help can unlock a lot of private sector investment, and that is going to be the focus this week,” Mr Darling said.

The Chancellor denied there would be any rise in VAT and insisted that there would be no emergency post-election Budget should the government be returned to power.

On the question of the 50p top rate of income tax for those earning more than £150,000, Mr Darling suggested that it would be only a temporary measure.

The tenor of Mr Darling’s comments indicate that the government may be looking at a more interventionist approach to UK industries, using a measure of state support to catalyse manufacturing growth.