Industry braced for grim Budget news

Contractors are braced for bad news in Wednesday's budget as Chancellor Alistair Darling looks set to slash public spending as the economy is forecast to contract by up to 4% this year.

Hopes of a VAT cut in refurbishment and maintenance work are likely to be dashed as the Government attempts to stop spending spiralling out of control as public sector borrowing hits 10% of GDP.

Darling will look to save £15bn by imrpoving efficiency in Whitehall departments. But some positive news for the industry is expected in the fom of £500m in environmental initiatives.

Measures will include an extra £300m to improve insulation and £200m towards greater investment in wind farms.

Further attempts to kickstart the housing market will also be made via plans to underwrite £50bn-worth of new mortgage-backed assets.

Shadow chancellor George Osborne said current spending plans were "unrealistic" and that Darling would be forced to reveal the "economic carnage" of the past decade.