No VAT rise in store and no second Budget says Darling - papers

Alistair Darling yesterday insisted Labour would not hold a second Budget should it win the general election and ruled out a rise in VAT, dismissing Conservative claims that this week's Budget would be "window dressing".

Despite better-than-expected tax and borrowing figures, the Chancellor has ruled out a pre-election "giveaway" and said the public wants a "sensible and workmanlike" Budget on Wednesday, reports The Scotsman.

He is expected to push some extra cash into stimulating business investment and helping the unemployed, but use the rest of the extra leeway to help pay the UK's record deficit. He said that a rise in VAT was "not on the table".

Mr Darling warned Tory plans to introduce a bank levy without international support pose "a hell of a risk" to City jobs. Full story...

THE UK'S economic recovery will remain "sluggish" for the rest of 2010 and not pick up pace until the middle of next year, the Confederation of British Industry (CBI) warned.

The UK's largest employers' group said that growth prospects for the economy will be "fragile" in the near-term now that certain stimulus measures, such as the VAT cut and car scrappage scheme, are drawing to a close, according to The Telegraph.

It also warned that growth in consumer spending would remain subdued this year, as people save money and fret about job security.

The CBI expects unemployment to continue rising and to peak in the autumn. Full story...

ALISTAIR DARLING today warned that Conservative plans to press ahead with a banking levy, to claw back some of the billions of taxpayer funds spent bailing out the financial sector, would pose "a hell of a risk" to City jobs unless it had international support, says The Guardian.

The chancellor is expected to include proposals for a bank tax, that could raise as much as £5bn, in this week's budget, but will stress that such a measure will not be introduced unilaterally. He will make it plain that the government would only support a global tax on financial institutions.

David Cameron appeared to make a grab for the popular vote when he announced on Saturday his party's intention to impose a unilateral tax on banks to reclaim some of the public money used to prop up financial institutions during the economic crisis. Full story...

THE CHANCELLOR must find another £10 billion in spending cuts and tax rises if he is to keep his promise to halve Britain's deficit, according to leading economists, reports The Times.

Fresh concern over the strength of the recovery threatens to undermine attempts by Alistair Darling to bolster the country's credit rating in this week's Budget.

Consumer spending - on which the Treasury is banking to power growth - is likely to remain weak for years to come, according to new reports by the CBI and Ernst & Young Item Club, the economic forecaster.

Peter Spencer, chief adviser of the Item Club, said: "If the Chancellor is realistically going to get the public finances back on track, a credible, detailed and more aggressive plan must be in place." Full story...