UK Chancellor of the Exchequer Alastair Darling

UK Chancellor of the Exchequer, Alastair Darling, in his Budget statement Wednesday cut projected borrowing forecasts in coming years and lowered growth forecasts for 2011.

With just over two months ahead of  the expected general election date, Darling said government borrowing would be less than previously forecast in the financial year which ends in April 2010.

He said borrowing in 2009/10 would be £167 billion, falling to £163 billion in 2010/11 and to £131 billion in 2011/12. In 2012/13, net borrowing will drop to £110 billion, then to £89 billion in 2013/14 and to £74 billion in 2014/15, he predicted. "This will mean debt is £100 billion lower by 2013-14 than was expected at last year's budget," he said.  In the five financial years to 2013, borrowing will total £660 billion compared with forecast net borrowing of £707 billion in December's Pre-Budget report.

The chancellor said said his 2010 growth forecast will be between 1%-1.5%; the 2011 forecast will be 3%-3.5% from his previous 3.25%-3.75% prediction. He expects the economy to grow 3.25%-3.75% in 2012.

The Budget deficit for 2009-10 is expected to be £167 billion or 11.8 per cent of GDP (gross domestic product), down from a previous forecast of £177.6 billion or 12.6 per cent of GDP. In 2011, the deficit will be £163 billionr 11.1 per cent of GDP, down from a previous forecast of £176 billion or 12 per cent. In 2011-12 it will be £131 billion or 8.5 per cent of GDP, compared with the earlier estimate of £140 billion or 9.1 per cent. By 2014-15, the last year of the forecast period, the deficit will still be £74 billion or 4 per cent of GDP, lower than the £82 billion or 4.4 per cent previously forecast.

The chancellor said he aims to halve the deficit in four years while still backing growth initiatives. He said overall debt as a percentage of GDP would rise from 54 per cent this year to 75 per cent in 2014-15 but the deficit would fall after that. Even at its peak, debt will be in line with the average of the OECD countries, the chancellor said.

“Should the economy do better than expected we will be able to do more to reduce the deficit,”he said. Cuts will reach £78bn in cash terms over the next four years

Here are the key points of Chancellor Alistair Darling's 2010 Budget, the last one before the general election.

• Economy contracted 6% during the recession
• Forecast growth of 1% to 1.25% in 2010, in line with forecasts
• 2011 growth forecast lowered from 3.5% to 3-3.5%
• Borrowing this year forecast to be £167 billion - - £11 billion lower than predicted in December
• Borrowing to fall from £163 billion in 2010-11 to £74 billion by 2014-15
• Public sector net debt to reach 54% of gross domestic product this year, increasing to 75% in 2014/15.
• 3p fuel duty rise to be phased in in three stages between April and January 2011 rather than in one go next month.
• Cider duty to rise by 10% above inflation from midnight on Sunday.
• Wine, beer and spirit duties to rise by 2% from midnight on Sunday and further 2% rise planned for two years from 2013.
• Tobacco duty up 1% from midnight on Sunday and by 2% in real terms each year until 2014
• Stamp duty scrapped for homes below £250,000 for first-time buyers
• Stamp duty on residential property sales over £1m to increase to 5% from April 2011
• £2.5bn package for small business to boost skills and innovation
• One year business rate cut from October to help 500,000 companies
• Investment allowance for small firms doubled to £100,000
• Doubling relief on capital gains tax for entrepreneurs
• No change to capital gains tax rates
• £385m to maintain road network
• One-off bank bonus tax has raised £2bn, double the amount forecast
• Basic bank account guarantee for a million extra people
• RBS and Lloyds Bank Group to provide £94 billion in small business loans
• Backs tax on bank transactions but on global basis
• New service to adjudicate credit disputes
• Six month work or training guarantee for under 24s extended to 2012
• Amount of time over-65s must work to receive work credits reduced
• Tax allowances for those on over £100,000 gradually removed. No changes to allowances for everyone else.
• Limits on Individual Savings Accounts to rise in line with inflation
• No changes to VAT or income tax planned
• Inheritance tax threshold frozen for four years
• Clampdown on tax avoidance to raise £500m
• New tax agreements with Belize, Grenada and Dominica
• On track to achieve £11bn efficiency savings target
• Reform of housing benefit to save £250m
• 15,000 civil servants to be relocated outside London
• £2bn investment bank to back low-carbon industries such as offshore wind. Government to provide £1bn through asset sales
• Funding for 20,000 new university places in science and maths but institutions must make savings elsewhere
• £35m enterprise fund to help university-launched businesses
• Winter fuel allowance rates extended for further year
• £4 rise in child tax credit for parents with young children from 2012