Budget 2009: Third of business leaders can see green shoots

Chancellor will claim 500,000 jobs were saved by action to stave off recession
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Indy Politics

Three in 10 businessmen detect the "green shoots" of economic recovery, according to a ComRes survey of 230 business leaders for The Independent. The proportion who see signs of a revival in their own sector has risen from 18 per cent in February to 29 per cent this month.

The findings will be a fillip to Alistair Darling as he tries to deliver an upbeat message about post-recession Britain in today's Budget. But the Chancellor will say that the recovery will not start until the end of this year – six months later than he predicted last November.

As a result, public borrowing will rise to a post-war record of around £170bn. He is expected to map out a programme of public spending curbs and higher taxes for the well-off to try to balance the nation's books over several years. But any tax rises are unlikely to take effect until after a general election next year.

According to ComRes, the proportion of businessmen who have confidence in Mr Darling and Gordon Brown has doubled in the past month – to 22 per cent and 30 per cent respectively.

However, they still trail their Tory counterparts. David Cameron enjoys the confidence of 61 per cent of business leaders and the shadow Chancellor George Osborne 41 per cent.

Vince Cable, the Liberal Democrats' Treasury spokesman, scores 61 per cent, while the politician with the highest "confidence rating" is Kenneth Clarke, the shadow Business Secretary, on 69 per cent – almost twice as high as his opposite number Lord Mandelson (35 per cent).

Optimism about the state of the economy will be tempered by another set of gloomy monthly unemployment figures, to be issued three hours before the Budget. The number of jobless, currently 2,028,000, will be higher than when Labour came to power in 1997 if it rises above 2.05 million. Business groups and trade unions expect it to pass 3 million next year.

Mr Darling will claim that 500,000 jobs have been "protected" by action taken to combat the recession – such as interest cuts and the £20bn fiscal stimulus he unveiled last November.

He will announce that all 16-24 year-olds who have been out of work for 12 months will be guaranteed a paid job or a training place leaving them £20 a week better off than on state benefits. He will vow "never to return to the days when a generation of young people find themselves on the scrapheap". Promising "a Budget for jobs", the Chancellor will announce that 250,000 jobs or work placements will be created or supported in a joint effort by the Government, employers and local authorities.

Mr Darling will also pledge more help to the poorest people who need emergency loans or grants from the Government's Social Fund. Its budget, normally between £600m and £700m, will be boosted by £270m during the recession.

He will recognise the growing role in childcare played by grandparents. About 40,000 of them who are below the state pension age will benefit from a national insurance "credit" towards their state pension if they look after a child under 12 for at least 20 hours a week. Another 5,000 family carers will also benefit.

After a tussle with Lord Mandelson, Mr Darling has agreed to aid the struggling car industry by including a "scrappage" scheme. People will be paid up to £2,000 for replacing older cars with a new vehicle. Critics warn this will help foreign rather than British carmakers.

Yesterday the Government said that a year-long study of spending in the public sector had found scope for £15bn of efficiency savings from back-office operations and IT, collaborative procurement, asset management and sales, property and local incentives.

Advisers said around £6bn of savings would be delivered by 2010-11, contributing to the Government's £35bn efficiency target, with the rest achieved by the end of the next three-year spending period. Mr Darling will announce plans to save a further £10bn.

However, the advisers warned that the Government will have to take "sustained action" if it is to succeed in driving down the costs of running public services. They said there are "few easy wins" for the Government and that the full benefits of the efficiency programme will not be seen for another four years.

Theresa May, the Tory spokesman on work and pensions, said: "This Government is sleepwalking through this unemployment crisis recklessly casting millions of people adrift. No amount of spin can hide the fact that youth unemployment is at its highest level since 1995. This is a government that won't allow many people to retrain until after 18 months claiming jobseeker's allowance."