The region’s business leaders have called on the Alistair Darling to make clear his plans to reduce the deficit when he stands up in the Commons on Wednesday.

While it is likely to be an unusual Budget so close to a General Election, head of policy at the Birmingham Chamber Katie Teasdale, said it was essential the Chancellor was clear about what the Government proposed to do to repair the UK’s economy.

“A deficit reduction plan should include a commitment to freeze the total public sector wage bill and a demonstration of how the Government plans to reform public sector pensions,” she said.

“Failure to do this will undermine both business and investor confidence. To sustain recovery, it is vital the Government assists firms to find new export markets and avoid cuts to organisations, such as the UKTi which provide essential support to companies wishing to export. To enable the rebalancing of the economy and to help West Midlands’ manufacturers we are calling upon the Government to avoid these cuts.”

Andrew Shaw, national tax managing partner for BTG Tax, part of the Begbies Traynor group, believes Darling will be a “Budget for floating voters”.

He said: “We’ve already had the 50 per cent tax band on income tax and I think after the election we will see both capital gains tax and VAT go up, but they can’t raise them beforehand. And, given the parlous state of public finances, they can’t give away much either.

“Petrol is due to jump 3p a litre in April but they might just defer that.”

However, the Institute of Directors has urged a clear trade-off with lower spending permitting looser monetary policy.

West Midlands chairman Richard Boot said: “The fiscal tightening needs to start sooner rather than later. You might think that a cut in public spending would reduce GDP but we need to look ahead to the second round effects. A fiscal contraction could benefit economic growth if done correctly. This is especially the case now, with the enormous budget deficit.

Johnathan Dudley, managing partner at Midland accountants and business advisers Horwath Clark Whitehill, feared the Budget would be in effect “a party political broadcast by the Labour Party”.

He noted: “It is going to be a case of – ‘you’re a pensioner; here’s some money and make sure you vote for us’.”

Lucas Markou, specialist tax partner at Solihull accountants Jerroms, warned that businessmen face a hidden threat in this month’s Budget.

“The Government could take the opportunity to slip in higher capital gains tax rates, hitting those who take risks and invest to grow their businesses.

“There would be no great outcry because few people are seen to be affected and because business and asset values have been dragged down by the recession to the point where even those affected by any hike in tax rates might not feel the pain initially.

“However, higher rates will remain for the future when values recover and much higher tax bills could follow.”