Yesterday in parliament

Brown slashes growth forecast
The chancellor, Gordon Brown, was banking on a strong economic bounce back after conceding that the economy had endured its "toughest and most challenging year". In his pre-budget report, the chancellor was forced to slash his growth forecast for the current year to just 1.75% compared with the buoyant 3% to 3.5% he was predicting eight months ago in the budget. Mr Brown also disclosed that borrowing this year would rise by another £5bn over and above his budget forecast to reach £37bn. But he predicted growth next year would recover to a healthy 2% to 2.5%, rising to between 2.75% and 3.25% in the two years after that, while the level of borrowing would start to subside.

The chancellor blamed a "virtual doubling" of world oil prices for the difficulties the economy had encountered. And he sought to sweeten the pill with a £2bn raid on the profits of the North Sea oil companies to fund a package of assistance for pensioners while enabling him to freeze duty on petrol and diesel.

Mr Brown said: "The task of this pre-budget report is to meet and master the global economic challenge, making the critical decisions to secure Britain's long term economic future."

However the shadow chancellor, George Osborne, declared: "This is a chancellor forced into the humiliation of admitting he got it all wrong. This is a chancellor who is past his sell-by date. This is a chancellor who is holding Britain back."

Tax credit reforms
The government unveiled a raft of measures to reform the tax credits system following Mr Brown's announcement that annual income changes of up to £25,000 will be allowed before recovery of overpayment takes place the same year. The paymaster general, Dawn Primarolo, outlined moves to tackle overpayments, including limits on the amount payments can be reduced to cover higher payments earlier in the year from November 2006.

Council tax to increase 'less than 5%'
Average council tax increases should be less than 5% for each of the next two years, the government indicated. Local government minister Phil Woolas announced that authorities in England will receive an additional £305m in 2006-7 and £508m in 2007-8. The total government grant to councils would go up by 4.5% to £62.1bn in 2006-7 and by 5% to £65.1bn in 2007-8.

Mr Woolas said: "This settlement is good news for councils and council taxpayers. We have provided a stable and predictable funding basis for local services. We expect local government to respond positively as far as council tax is concerned."

Terror bill to be watered down
The government is to water down plans to create a new offence of "encouragement" - or glorification - of terrorism, Home Office minister Baroness Scotland of Asthal said. The terrorism bill will be amended to make clear such encouragement would be illegal only if it was intentional, she told peers. The proposed objective test of recklessness would be replaced by a subjective test, relating to the defendant's intentions.

Clarke denies increase in crime
The home secretary, Charles Clarke, angrily rejected Tory claims that the government has "fiddled" statistics on violent crime. He was responding to taunts by his Tory shadow, David Davis, that it had nearly doubled under Labour. This was "simply wrong", he insisted. Violent crime had in fact reduced since 1997.

Boost to flexible working
A package intended to boost flexible working for parents and carers was outlined by the trade and industry secretary, Alan Johnson. The work and families bill aims to help working families balance demands of their job with caring for their children. It proposes extending paid maternity and adoption leave from six to nine months from April 2007 and would let mothers transfer a proportion of their maternity leave and pay to the father. Mr Johnson said the reforms were about "fairness, justice and genuine choice".

'Equity release' mortgages to be regulated by FSA
A bill to bring all "equity release"-style mortgage schemes, including so-called home reversion schemes, under the regulation of the Financial Services Authority cleared parliament and awaits royal assent. The regulation of financial services (land transactions) bill, which has already completed its Commons passage, received an unopposed Lords third reading.

Government art collection uninsured
The government's collection of art works is not insured, junior culture minister David Lammy revealed. It features over 12,500 works dating back to the 16th century including pieces by John Constable, Francis Bacon and Lucian Freud. Mr Lammy said: "The government art collection is not commercially insured. In general, the government carries its own risk. However, there are a small number of exceptions of works of art in non-government buildings which are commercially insured."

Upkeep of Home Office gardens costs £40,000 a year
Upkeep of gardens and water features at the Home Office's new Marsham Street, London headquarters has cost around £40,000 so far this year, the home secretary, Charles Clarke, disclosed. He said the private firm involved - Annes Gate Property - was unable to give a precise figure "but as a guide have indicated it is probably in the region of £40,000".

In parliament today
There are Commons questions to the transport secretary, Alistair Darling, and his ministers and on the cabinet office. The London Olympics bill is set to clear its remaining stages. Topics of backbench debates in Westminster Hall include the government's response to bovine TB. The Lords debates the immigration, asylum and nationality bill's second reading and the accession of Croatia to the EU.