What does the pre-budget report actually mean for you?
Updated on 09 December 2009
Our economics correspondent Faisal Islam reports on the numbers behind the worst recession for almost a century and how much it will cost you.
Well the chancellor might be predicting a rapid return to growth but the Treasury admitted today the economy has shrunk by 4.75 per cent this year.
That, according to a leading economic research body, is the worst figure since 1921, worse even than any year during the Great Depression.
So what do these numbers mean to you?
Faisal Islam explains:
The Treasury would like you to believe that these decisions soak the same rich bankers who helped cause a crisis that's led to a record peace time black hole in the public finances.
But the chancellor's main tax weapon by far - was increasing the level of national insurance contributions for the majority of UK workers.
Today he unexpectedly raised the rate by an extra 0.5 per cent from April 2011.
So how will someone on an average income of £26,000 be affected?
They'll be paying an extra £102 a year - but remember the chancellor also announced a similar increase last year to take effect in 2011.
So in total they'll pay more than £200 a year in higher National insurance.
The government says anyone earning less than £20,000 will be protected - but it is also worth noting that this 1 per cent increase goes all the way up the income scale.
The reason why the business lobby is disappointed is that despite these higher taxes, there's no sign of an improvement in government borrowing either.
Mr Darling thinks we'll borrow £178bn this year, with that total dropping away over the following four years.
These numbers are almost completely identical to the ones published back in April - the government's made no progress in cutting down this borrowing.
In fact, over the whole period, it actually borrowed £4bn extra - not quite another stimulus but a little bit more this year.
So the overall picture is that the government has taxed more and then not used it to pay down debt, but has spent more than planned on those priority areas.
It has also announced the chop for 12 projects worth £5bn from parts of the NHS IT scheme, to special recession training programmes, and science budgets - this now means about half of how the government will half the deficit is now explained.
But away from stated priorities of police schools and hospitals, expect a savaging of spending and increase in user costs like tuition fees - in areas like higher education, transport and housing - remember that was Gordon Brown's number one priority when he became prime minister.
And all of this depends on growth of course - the economy is still not officially out of recession - 2009 was confirmed as the worst year for growth since 1921.
After a slow recovery next year, they hope the economy will be growing by 3.5 per cent in 2011 - dotcom boom style growth and every year after that.
Financiers may have seen their bonuses attacked, but the markets actually took these numbers in their stride, the Treasury says it's a measure of its credibility.
But instead of using taxes to pay down debt - more spending instead. There's now little room to cope with another economic shock.
Pre-budget report discussion
To help scour the small print and grand gestures of Mr Darling's pre-budget report representatives from all three parties and an independent expert were on hand.
Jon Snow was joined by Philip Hammond MP, shadow chief secretary to the Treasury, Liam Byrne MP, chief secretary to the Treasury, Vince Cable MP, Liberal Democrat Treasury spokesman and Robert Chote, director, Institute for Fiscal Studies.
