Budget set to boost jobs but Alistair Darling ‘won’t spray the cash’

The pre-election Budget will contain measures for jobs and businesses but no glitzy giveaways, senior sources said today.

Alistair Darling's allies dismissed claims he is tempted to "spray cash" on vote-winning announcements following a surprise boost to the public finances.

Instead, it was suggested, there will be long-planned measures to help the unemployed back to work and to support firms recovering from the recession.

The Chancellor is also expected to use a windfall from higher-than-expected tax receipts to reduce
the borrowing total this year by around £6 billion to £10 billion.

Sources close to him denied reports he was under late pressure from Gordon Brown to unlock bigger spending after yesterday's borrowing figures, which suggest he could have up to £12 billion to play with if he keeps borrowing at the projected level of £178billion.

"If there is a small undershoot in our borrowing this year, that does not mean it will feed through to next year," said an official, who added: "We are certainly not going to be splashing £12 billion."

Lord Mandelson today said banks were still not lending enough to small firms. He called for an appeal system so bosses could go over the heads of their bank managers.

"Banks have eased constraints but they have to go further," said the Business Secretary. Tories accused Labour of being in "chaos" over tax, after he suggested there could be further rises next year.