Next Gen News

All the news from Westminster including minute-by-minute coverage of PMQs and all the latest reaction to the budget

11:05 am: Peter Walker, energy secretary during the miners' strike and one of the leading "wets" in the Thatcher government, has died. Jonathan Isaby has got more details at ConservativeHome.

10.42am: The Guardian's budget coverage is all here. These are some of the best budget articles from the rest of the papers.

• Hamish McRae in the Independent does not believe all the spending cuts will actually happen.

Is this government in the last year of his life (if it is, finally, a full term) will actually be on the introduction of cuts, the last piece of the 25% reduction in most departments, when she was about to face the voters? I know the plans of work translated into 20% compared with unprotected departments, and 25%? This does not happen, right?

• Martin Wolf in the Financial Times says George Osborne has taken a huge gamble.

Massive fiscal tightening was ultimately inevitable. But perhaps only such a young government â€" in age and in time in office â€" would gamble so much on such a fast adjustment, so early in its life. As a citizen of the UK, I hope it pulls it off. Maybe, its sense that the UK could not get away with a measured approach is right: we will never know. But this gamble has now defined the government. If it is seen to have failed, it will be finished.

• Tim Harford in the FT says we're all going to feel the effects of the budget.

I have recently taken to dividing budget numbers by 60m, roughly per capita, or by 25m, roughly the number of households in the UK. The effect is bracing: Britain is borrowing £6,000 per household this year. This is, to use a technical macroeconomic term, a fair whack ...

Over the next four years we shall see £90bn of tax rises and spending cuts, more than half of which were inherited from Labour. That is £1,500 a year per person or £300 per household per month. We are going to notice.

• Peter Oborne in the Daily Mail says the budget will tear the coalition apart.

Many backbench Liberal Democrats, whose party had been out of power for 70 years before the formation of the coalition government last month, have only ever known the irresponsibility of opposition.

For them, Osborne 's strict, clear and great responsibility budget horror.

That is why, in due course, I believe that this coalition will start to split apart â€" and that George Osborne's budget can only have brought that moment closer.

• Daniel Finkelstein in the Times said that cutting spending won't inevitably make the government unpopular.

In the US, there have been two attempts at tracking the relationship between spending and popularity. Both showed that increases in public spending actually reduced votes for the incumbent. And a survey across the OECD found no evidence that looser fiscal policy is related to longer political tenure.

To this work, [a Goldman Sachs study found] that "the three governments that have executed the most high-profile expenditure-based deficit reductions â€" Ireland in 1987, Sweden in 1994 and Canada in 1994 â€" were all of them re-elected".

• Benedict Brogan in the Daily Telegraph says that Osborne has some similarities with Gordon Brown.

He would reject the comparison, but in some ways he is like Gordon Brown â€" political to his fingertips. He calculates for advantage; he delights in the fray. He will have enjoyed telling Labour MPs, for example, that nothing in the budget would make child poverty worse, or that his statement was "progressive".

10.36am: I've just finished going through the papers. Generally, Osborne's budget has got a better reception than he might have expected. Here's a rough guide to how the papers are responding to it in their editorials.

Very positive: The Daily Telegraph, the Times, the Sun.

Broadly positive: The Financial Times, the Daily Mail.

Neutral: The Independent

Negative: The Guardian

Very negative: The Daily Mirror

10.31am: Today we'll get the Institute for Fiscal Studies' verdict on the budget. They're holding a briefing at 1pm.

10.09am:MPs will have to start paying more for their food and drinks in the House of Commons. Commons Commission, which runs the place, just put out a press release stating that it had decided to reduce the budget of the fund to ?? 12 m in 2010-11, about 5% more than originally planned. The budget of the fund will now be ?? 219m this year.

The initial savings will be made in various ways including: by scaling back a number of programmes and projects, reducing the parliamentary works programme and freezing all but essential recruitment.

This year £800,000 will be cut from the budget for select committee travel, and to save a further £500,000 catering prices across the house will be raised. This will bring cafeteria prices into line with benchmark workplace venues and bar prices into line with a competitively-priced high street pub chain.

More detailed consideration of further reductions in the catering subsidy will be part of a savings programme set up to identify and achieve additional budget reductions over the next three years.

It was inevitable with David Cameron is currently running the country. Last year, Cameron made a speech saying that MPs should no longer have their food and drink subsidised by the taxpayer. He was particulary angry about the fact that MPs could get a "lean salad of lemon and lime-marinated roasted tofu with baby spinach and rocket, home-roasted plum tomatoes and grilled ficelle crouton" for just £1.70.

Not any more!

9.32am: More about the Cameron/Clegg joint TV appearance tonight (see 8.30am). It will be shown on BBC News at 7pm, and then it will be repeated on BBC 2 at 11.25pm.

9.15am: If you want to know more about what the budget says about where the government is going to gets its money, and what it's going to spend it on, my colleague Paddy Allen has produced a wonderful interactive graphic revealing the state of Britain's finances.

8.55am: Alistair Darling has also been giving interviews this morning. This is what he told the Today programme.

I'm very concerned, and I'm not the only one - there are a number of commentators and others who are extremely concerned that this government is taking a risk. This is not pain-free. Get this wrong and the consequences could be dire for many, many people and businesses in this country.

In addition, they announced a whole screed material yesterday, and as the days go by, I suspect some of the fine print will show one or two of the horrors that Aren t 'catches the eye. And besides, with the coalition government and puff set of partners such as the Liberal Democrats, I just wonder whether they will be able to deliver some of these things.

8:54 am: Osborne has also been doing television interviews this morning. From what I've read about them on the Press Association wire, it doesn't look as if he said anything original. But it sounds as if the GMTV interview was quite lively. This is from the PA report.

Osborne, who looked stony-faced when he played angry and disturbing messages from viewers about his GMTV ad budget, defended the decision to freeze the child's benefit.

"I didn't want to get rid of it. Some people were telling me 'abolish child benefit'," he said.

"I care about helping mothers who receive that benefit. For many people it's the one thing they get without asking.

"Instead of abolishing it I've frozen it, which keeps child benefit, and means hopefully in a couple of years' time we'll be able to increase it."

You can watch the footage of it on the GMTV website.

8.43am: It wasn't one of the all-time great interviews. But there were four points that stood out.

• Osborne suggested that welfare cuts could go even deeper. He said that if further money can be saved from the welfare budget, then the spending cuts in other areas won't have to be so severe. He made this point when he was asked how the Home Office could cut spending by 25%.

It doesn't have to be 25%, in the sense that if over the coming couple of months we can find further savings in the welfare budget, then we can bring that 25% number down. In the end that is the trade-off we've got to make in the spending review, not just between departments, but also between the very large welfare bill and the departmental expenditure bill.

Osborne is already committed to cutting welfare spending by £11bn. It's hard to see how he could win political support (especially from the Lib Dems) for even deeper cuts.

• He said there would be a "big public engagement" about the spending review. Cameron and Clegg are expected to say more about that tomorrow.

• Osborne insisted that the Tories were not planning a VAT increase before the election.

• He claimed that being part of a coalition had "enormously" strengthened his hand as chancellor because it meant there was a democratic mandate for what he was doing.

8.30am: David Cameron and Nick Clegg are due to make a joint television appearance together today to discuss the budget. Nick Robinson has just told the Today programme that he will be doing the interviewing. Apparently he will be chairing a Q&A type event. It's due to take place some time late this afternoon.

8.27am: Davis and Osborne are still talking about spending cuts. Osborne says that David Cameron and Nick Clegg will be saying more today about how the public will be engaged in this debate.

Davis asks about the election. He says the debate about spending was not conducted in an honest way. Why couldn't politicians discuss cuts honestly?

Osborne says he doesn't agree. The issue of spending cuts did come up.

Q: What about VAT?

Osborne says the issue of whether of not the government needed to go faster in cutting spending was aired during the election.

On taxation, Osborne says the Tories were not planning seven or eight weeks ago to go ahead with a VAT rise. They only decided to implement this rise when they saw the borrowing figures.

Davis says the figures were reasonably well known before the election.

Osborne repeats the point on the need for immediate reduction to be a central issue in the election. The presence of two parties working together, and strengthened him as chancellor, he said.

That's it. I'll sum up in a moment.

8.22am:Evan Davis asked about the balance between tax increases and cost reductions.

Osborne said that international studies have shown that where most of the work carried out cost reduction program to reduce the budget deficit, usually more successful.

Q: But you could have put taxes up more to avoid spending cuts. Why did you want to shrink the state to below 40% of GDP?

Osborne says that is not being done for "ideological reasons". He is taking spending down to average levels. He could have increased taxes more. But that would have posed a risk to the economy.

Q: But aren't spending cuts a risk to the economy?

Osborne says he needed to tackle the root cause of the problem, "a decade of over-spending".

Q: Budget of the Ministry of Internal Affairs is £ 10 billion. How are you going to cut it by 25%?

Osborne says the spending review will be a "real challenge".

First, he inherited a situation, when there were 20% reduction in any case, according to the plans of work 's.

Second, he decided to tell the public by how much departmental budgets would be cut.

Third, if the government can find more welfare savings, then other budgets won't have to be cut by 25%.

Q: Will you feature programs in general? Or you'll be a piece of sausage?

Both, says Osborne. In some cases the government will look at what functions the state is performing and ask if those are necessary. He mentions the child trust fund as an example.

8.14am: Evan Davis is interviewing George Osborne. He says that Osborne's policies will take state spending as a share of GDP to below the level it was in the Thatcher years. Has Osborne gone too far?

Osborne says Britain should live within its means.

Q: But is this is a political project? It's as if you want to cut spending for political reasons, now, while you can get away with it?

Osborne says his plan is credible. He says that he needed to announce deep cuts because he needed to act with "caution". He needed to plan for the unexpected.

8.00am:What do the UK budget? It 's the question that will dominate the day. I LL 'look at the documents properly later, but here are three sentences from today' s Guardian.

Polly Toynbee says it was a Tory budget.

This was a Tory budget, a very Tory budget, with only a little Lib Dem icing. All its headlines flashed out Tory policies of the past: on their watch unfair VAT always rises, fair income tax never does. To take only 23% from taxes with 77% in cuts ordains that the pain will fall on the poorest people in the poorest regions most dependent on public spending and the rollcall of familiar blighted zones will grow.

Larry Elliott says it was "brutal stuff".

Eat your heart out Geoffrey Howe. Take a back seat Norman Lamont. Austerity has a new champion and his name is George Osborne. Today's budget was billed as tough but that failed to do justice to a package that made Sir Stafford Cripps look like a soft touch. Not content with the £73bn of tax increases and spending cuts inherited from Alistair Darling, Osborne added an extra £40bn of tightening of his own.

And Jonathan Freedland says it will hit the poorest hardest.

Yes, Osborne now feels obliged to speak of fairness, to appear to be whacking the banks and shielding the poorest children in the land; but these are moves born, above all, of presentation and political calculation. Look closely and you see that this is by no means the "progressive budget" the chancellor claimed. It does not pay more than superficial deference to the terms of trade laid down by the last government.

David Cameron will have his chance to defend the budget at prime minister's questions. I'll be covering that, plus all the other reaction to the budget. But first we've got George Osborne talking about it on the Today programme at 8.10am.