'Growth, jobs, fairness' promised

Dec 9 2009

"Growth, jobs and fairness" will be the key elements of the Pre-Budget Report, Chancellor Alistair Darling has told a special meeting of Cabinet.

Mr Darling briefed senior colleagues at 10 Downing Street just hours ahead of the last PBR before the general election, in which he is widely expected to announce a one-off "supertax" on bankers' bonuses.

Gordon Brown told the meeting that the important issues for the PBR were "rebuilding the economy, cutting the deficit and protecting the frontline", the Prime Minister's spokesman told reporters.

Speculation that Mr Darling would protect funding for hospitals, schools and police - thereby increasing the pressure for cuts in other areas of state spending - has been fuelled by Lord Mandelson.

The Business Secretary acknowledged that measures in the PBR would not be "painless", but said Mr Darling had put together a "carefully balanced" package which "keeps us firmly on the road to recovery" from the recession.

"He has got to make clear we are going to prioritise and protect our frontline public services, like schools and hospitals and police, but he has also got to set out how, in coming years, public spending will be squeezed, because we have got to bring down borrowing, we have got to narrow the deficit," Lord Mandelson told GMTV.

"So it is not going to be painless what the Chancellor announces this afternoon, but nor is it going to be reckless."

Lord Mandelson said nobody wanted to drive bankers away from the City of London.

"They are important for our economy, they are important in the tax revenues they generate for the Exchequer but, on the other hand, we are seeing, in some respects, a return to the short-term bonus culture that got us into so much trouble in the past," he said. "Therefore, I think it is reasonable for the Chancellor to deliver a message to the banks."

Shadow business secretary Kenneth Clarke said that an attack on bankers' bonuses would be a distraction from the real problems of the economy.