Labour to end top rate tax pledge
The pledge not to raise income tax rates was one of the foundations of New Labour. It was designed to reassure voters that the party had no desire to punish those who worked hard, however much they earned. It is to be ditched in the name of fairness when a new 45p tax rate is created for those earning £150 000 a year or perhaps even more.
The sum raised - £2bn or £3bn - is relatively small but the political significance of the move is vast. It will come on a day when the Chancellor delivers not one but, in effect, two budgets both equally dramatic. The first - a crisis budget - will spend billions to get customers and the government itself spending in an effort to get the economy moving again. The second - which won't be felt in full until 2010 or 2011 - is to fill the budget black hole that can simply no longer be ignored by ministers.
Alistair Darling will say that the income tax rise will only happen if Labour is re-elected protecting him from charges of breaking the party's last election manifesto and, in effect, writing the first sentence of the next one.
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And what makes this pledge any different to the others they haven't upheld ?
They have made a party manifesto into a work of fiction...
I'm sure that high earners will soon find a way to get out of it...
Is there any point in the Chancellor actually making a statement as most of what he can do and will do has already been told to us by himself.the former Chancellor and the Minister for business.
Could you please ask for a timetable from the Chancellor as to what time scale he is working to,and over how many Parliaments are we going to be lumbered with the extra Tax's ? just his best estimate will do so we have a baseline in his thinking .
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And so it begins.
A budget deficit of £100 billion and Labour aim to recover £2-£3 billion in two years time - less than the INTEREST on the increase in budget deficit by sacrificing one of their previous key commitments.
How many more tax increases must they make? How much more money will they have to take out of the economy to try and make up this shortfall? How long will it be before they make that call to the Banker - the IMF? Hours?
The VAT discount won't work - it is like giving a patient a saline drip when electric shock treatment would be in order. I suspect most of the discount will be absorbed by retailers - after all most of them are offering sales at the moment anyway. What happened in America when everyone was give $700 to spend? Did it stop the country falling into recession - will it save GM/ Vauxhall/ Ford?
In effect the Government is replacing borrowing by the individual and companies with borrowing by the State - in the vain hope that borrowing in the economy will start again. But with what? How many people out there still have equity in the houses they could release by increasing their mortgage? How many banks would want to allow them to increase their mortgage? How many entrepeneurs will have their assets seized that they gave as collateral for their business? How many home owners will have to remortgage at substantially higher rates as the mortgage they request is 95% or higher? Pity the people who took out a 125% mortgage - it is now a 150% one!
A bloodbath is coming - bear in mind that the manufacturing index has gone up by 2% since 1999 - our GNP should therefore have gone up by the same amount - instead of the ridiculous 25% due to overextended borrowing. Any fiscal stimulus just makes matters worse - we borrow even more - we don't produce more - and we have to pay back the increase of borrowing as well. A fiscal stimulus to encourage manufacturing and exporting may help.
And in the last year we have spent £50 billion pounds funding our spending habit by buying goods from abroad. No doubt this figure will go down a bit (if the recession continues) or go up a bit (if the fiscal stimulus works) but in either case by 2011 we have to assume that £90 - £100 billion more will have left the country.
The horrible thing about borrowing is that for spending to continue, you have to borrow the same amount next year and the year after. And this time next year, with borrowing at an even lower level than 2008 and no increase in GDP, the Chancellor will have to do the same again. He has to - dogma will permit no alternative.
Today at 3.30 begins a new suicide note in politics. NULabour RIP.
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It's a small proportion of the relevant tax rises, and is just the thin end of the wedge.
What he won't tell you is that if this only raises 3billion where's the rest of the money going to come from.
He won't tell you that because it'll mean that VAT will go up to 25%, the lowest rate of income tax will go to 35%, council tax will become 2000 a year for a one-bed studio flat, and all the wealth creators of will leave the country thereby destroying the entire economy.
This is going to make the labour-caused collapse of the 1970's look like a tiny blip.
If we don't get a change of government in 2010 we're totally finished. Even with a change in 2010 it's not going to be pretty.
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Come on Nick don’t be so coy, it is after all NuLabour you are talking about!
So Nick, the 2010 NuLabour manifesto is beginning to take shape:
1 Due to unforeseen circumstances we were not able to carry out our 2005 commitment for a referendum on the Lisbon treaty. For reasons beyond our control that commitment is a dead duck, so will be excluded from this manifesto.
2 We have doubled the band of taxation for our lowest paid workers so now in line with that action we intend to increase the top band by 5 percent.
3 Due to the fact we are a party for the many and not the few we also intend to raise the 20 percent tax band to 25 percent.
4 Gordon is great.
5 Brown is a super hero.
6 Flash Gordon has saved the world.
7 Long live Duff Gordon.
Vote for us - vote NuLabour the party that does not overtax and/or overspend.
Yeah right on.
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I was a bit puzzled by the reduction in VAT but this is balanced out by the chance of the higher income rate being raised. Overall, it looks like the sketchy outline of an incomes policy that's in line with historical norms and standards. I'm generally in favour of that and the cut off point of 150K GBP looks about right.
It's been covered a few times recently but studies and surveys suggest that top earners tend not to be motivated or perform better if they're paid more. Plus, reducing the economic and social pressure on middle and lower incomes will help reduce cost pressure and upset. That should help boost morale and reduce anti-social attitudes.
Some people will claim that this tax and earnings approach will stifle entrepreneurship and business overseas. It may be true in a tiny minority of cases but skills and people aren't that portable in reality, and if business wants access to skills and markets in Britain they have to dance to the tune, or someone else will step in to replace them.
Corporate governance, fair wages, innovation, a polite society, wellbeing, and long-term capital growth isn't far behind this new and, some would argue, long overdue agenda. I've been arguing for it in this blog almost since the day Nick opened shop. Government is treacle slow and 3 years is lightspeed for government, so I'll count that as a result.
There's other things that flow from this. The more savvy politicians and journalists know that a basic level of competence, relevance, and patience is useful in developing a more mature body politic. It's been very slow in arriving but the media articles and political speeches on personal development and economics might just be kicking in.
I've commented on the Tao of economics and Keynesianism before but Plato has a similar and equally interesting reflection. His often overlooked unwritten doctrine is that the great and the small are part of the One: that form is contained within the One, and the One gives rise to form. In a nutshell: what you do matters and everything is connected.
I'm sure, our God-King Gordon Brown, Great Helmsman of the United Kingdom, Blessed Saviour of the World, His Excellency the Chancellor to the Cosmos (according to Andrew Rawnsley) knows this stuff. It's been theorised that Plato has a similar personality type along with Shogun Ieyasu Tokugawa, so a similar ethos and direction doesn't come as a surprise.
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chuck @5
go to bed, take something for the fever you have. why do you consider that funny man in Downing st to be our saviour?
He is killing GB, killing England and crippling us with his unique brand of ineptness.
he needs to knw that this is no time for a novice, which is what HE is.
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#5 Chuck_E_Hardwidge
I note that part of the above section is from Andrew RawnsleyAnother on-off election fiasco would be fatal for Mr Brown article.
Pity you did not actually read the rest of the article. Which incidentally referred to Flash Gordon and his dithering with regards an early election.
It appears that you are clutching at straws Chuck, and are using myth to legitimise it!
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#5 Chuck_E_Hardwidge
Had you read the article in full Chuck, you would have noticed the following:
So it looks like Duff Gordon has two choices:
1 Go for an early election with 5 bullets in the chamber.
2 Stick with 2010 with 6 bullets in the chamber.
It will almost be worth the pain!
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The science and historical norms and standards generally agree with this taxation approach. The CBI and media don't totally get it yet, and the Tories are dragging along like the broken wheel on a shopping trolly, but it's sound enough.
It's notable that the Liberals are swinging their canon in favour of the government, so the Tories are becoming even more marginalised. Historically, this reminds me of the deciding battle Ieyasu Tokugawa fought before being declared Shogun.
If you looked at the structure and balance of the emerging tax policy, and how that might underpin certainty for business and create a better sense of fairness, I suspect, you'd be less hostile to the plan and the general intent of the government.
This new tax approach doesn't just provide a short-term fiscal stimulus but a solid framework for the long-term. Sure, there's some tuning and tidying up that can take place later but it's in line with reality and what people have been asking for.
I tend to think a lot of your badmouthing and attitude is because you're dwelling on past mistakes and haven't taken care to understand things fully. If you want to move into management or go anywhere near customers you're going to have to take a step back from that.
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the next election may well be worth losing for the tories....let those that created the mess sup the poisoned chalice.
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#9 Chuck_E_Hardwick
I am surprised you did not throw in the following Brown quote:
It does look like Duff and you are of the same mindset (your words not mine). Shoot off at the mouth before putting the gray matter into gear!
Obviously you do not read what you reply to or what you use for support.
I design electronic hardware, software and firmware for solutions, hopefully, that will help solve environmental problems in tomorrows real world.
Chuck you are priceless - for everything else there is Barclaycard!
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What a record on increasing tax this government has. Fiscal drag has now brought many of the lower and middle paid into higher taxation. The biggest fiddle is the tax credit that offsets welfare against taxation enabling this mendacious lot to claim that income tax has gone down.
What a bunch of liars they are.
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Dear Nick
OLD LABOUR is back, Brown cannot hope to control spending without hitting the rich, who have evaded tax for decades now. middle England has always born the Blunt of tax rise's along with the most vunerable the Poor who Brown states he is a friend of, like the pensions and 10p tax rise he certainly knows how to treat HIS friends.
There is also a Major scandal regards Utilty Companies who are ripping the Poor off by Taking money from them throught direct debit charges, an increase in Direct debit charges is being made for estimated usage of fuel, to boost their coffers which now stands at a staggerring £700,000 000,
pounds this is EXTORTION,
NEITHER Brown or Darling have interceeded on the public side regards this and just let the Utilties get on with the "Robbery"?
Citigroup have just requested state Help, this now shows that this bail out is going to treble across the board, in the next years, and along with Repossessions this is AN ABSOLUTE SCANDAL CREATED BY THE BANKERS, who are getting away with their greed,it was known by the Treasury that Northern Rock were giving out Morgages at 125%, rate, and they also sat back and did nothing about this
THIS IS NOT THE PUBLICS FAULT YET THEY ARE BEING CRUCIFIED FOR THE GREED OF BANKERS AND FINANCIERS ,
Oh yes, stuff the rest of the World, look after Britain First, its a huge big excuse the involve the rest of the world when our own country is suffering.
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Nick I notice that the CBI has come out with a 10 point plan to help businesses and hence reduce job losses. Do you not think it is a bit late? The PBR has been done and dusted.
Nick I am a bit puzzled by his remark Given the poor state of public finances. I thought Crash Gordon was a whizz kid with money, certainly not a novice. Please can you help?
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Gordon Brown said that he had stopped boom and bust and we did not belive that at the time did we?
How clever was Tony Blair to see all this coming and pass the poison chalice on to his friend!
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The increase in the top rate of tax is a drop in the ocean and not worth it's salt. It'll discourage some of the hard working entrepreneurs who we need to stay in this country to provide jobs and tax revenue and panders to the envy culture. Hello Monaco and Dubai!
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Certainly, you don't pay attention or communicate your thoughts as well as you believe. That creates a whole bunch of issues like people shouting at or talking across each other. I don't recommend it.
I actually took a positive effort to explain the tax approach and gave you a more polite nudge than your demanding and rude attitude over the Tao and economics. A little gratitude would be nice.
Time to put you back on ignore...
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Nick,
now two budgets, now who has been reading your comments, it is not two budgets, it is a Pre-Budget Report and a Crisis Budget, one is a report the other is a budget.
I will say now that he also has to announce an increase to personal allowances taking a large number of people out of the tax net altogether, I would say that before you pay any income tax at all you should have GBP12,000 personal allowance. I would either have that or allow tax allowances to be transferred between married, or civil partnered couples.
He must also announce an urgent inquiry into the feasibility of bringing in a Local Income Tax. It would be very similar to the Poll Tax but would not relate to property values, purely based on income and the number of properties owned. If you have twelve properties, whether or not they are in occupation or not, then you pay the Local Income Tax. Also even if the property is full of students paying rent then you pay council tax.
His proposal to tax those 'earning' over GBP150,000 will mainly effect leaders and higher paid executives of councils, not the bankers. As for the likes of celebrities, who alledgedly earns millions from the BBC, they won't have to necessarily pay any increase in tax. They usually have a production company, and they are paid by their production company and not the BBC.
What needs to be looked at are expenses, you would be surprised at what is allowed as expenses. Doing a travel programme, or looking at apes in Africa, why that is part of your expenses, need special equipment for the programme, expenses, tax allowable. A new suit because you are on TV, expenses. Your garden refit, because you are holding a business conference, allowable expense etc...
To say that taxes should be deferred is a nonsense, all that will happen will be that they will cut and run. This will be a cut and run, scorched earth, crisis budget, based on a Report.
Good grief they don't even mention the wars anymore. We ca't afford them, and furthermore we can't afford to equip our army let alone the armies of the countries which we occupy.
Finally, I really do not want Britain to be in
hock to some pretty awful countries, namely China and Saudi Arabia, 'he who pays the piper, calls the tune' now let's hear you bring that one into your commentary Nick, you've already nicked my 'crisis' budget comment so why not go the whole hog.
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Nick,
the new buzz word, this is a 'compassionate' budget. We must be compassionate towards those who have gotten into debt, that is, spent too much, who have over-extended themselves.
You'll notice how yesterday Gordon Brown was slightly hesitant before he used the word compassionate because I will bet that Alistair Darling will use the word a lot in his speech. Darling will be angry because compassion could be the only justification for this crisis budget. How could anybody be so heartless as to throw pregnant women and little babies onto the streets. I bet Darling wanted to be the first to use it, or should I be more compassionate about the Brown motives.
Compassion, now who but a heartless wicked Tory could argue with that. I can see the speech being rewritten already, that T A Griffin has sussed us again.
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We are back to 'old Labour'. Wanting to tax the rich till the pips squeak, whilst destroying the very economy that supports the rest of us.
The difference between now and 1979 was that then Labour had scuppered the economy through sheer incompetence.
What Brown is doing now is deliberately leaving as much damage as possible before he loses the next election.
Creating huge debt by borrowing massive amounts of money to 'temporarily' lower taxes will severely hamper any real recovery. He knows this, and must be praying he loses the next election so that he wont have to sort out this mess.
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#5. Charles_E_Hardwidge wrote:
I was a bit puzzled by the reduction in VAT but this is balanced out by the chance of the higher income rate being raised.
Overall, it looks like the sketchy outline of an incomes policy that's in line with historical norms and standards.
I'm generally in favour of that and the cut off point of 150K GBP looks about right.
= = = = = = = = =
Cutting VAT from 17.5 to 15.0% does exactly what for you, Charles?
The reduction in prices will be negligible, and mostly ZERO, for the majority of the population.
If I have £100 disposable income per week, and continue to shop as normal, the propaganda will be that I should save the princely sum of £2.13 (£1.15 for every previous £1.175).
I'm sure you can tell me how much happier that should make me.
But, will prices actually drop by this?
Certainly your new Bentley, Ferrari or 48" Plasma TV will have a big chunk knocked off the price tag.
But I am more interested in my pint of milk, my loaf of bread, my fruit and veg, my daily newspaper, my gas bill...... where there will be NO CHANGE.
Almost everything which attracts the 17.5% rate is already being discounted by more than this measly 2%, while the reduced-rated and zero-rated basics are going up.
If I'm in the super-rich league I have 18 months to take advantage, continue to use my tax avoidance schemes and plan my exit.
If I'm not in that league, then I am stuck with what is being forced upon me and left to pay the Piper when he comes demanding his money back, because the super-rich will have scarpered by then ..... or will have found more devious ways to avoid paying.
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I noticed the CBI 10 point plan earlier and wanted to comment on it. It sounds like a vigorous recovery plan on one level but is just another big business call for corporate welfare on another.
The real issue is that business has been very bad at leadership and communication, developing staff, and sticking with suppliers, customers, and staff during crisis. Short term "incentives" won't help that.
Sweating assets and cost cutting is a no-brainer. Hanson did that during the Thatcher years and got rich quick but pretty much destroyed every business he touched, and it ain't gonna work different this time.
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I'm worried about this. We're already heavily indebted as a nation. Labour's proposals will mean that, when a global recovery does begin, we will not benefit due to the tax rises needed to repay that debt.
I also think the 45% business is a red herring. The real bearers of the cost will be ordinary folk. Look for big future increases in NI and indirect taxes.
Now would be a good time to emigrate!
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Smoke and Mirrors,
Most earners over 150k have tax saving plans so will not pay it anyway...
This is a smoke screen to hide tax rises for middle to low earners.
Just remeber the last 2 minutes of Browns last budget, 2p tax cut headline used to cover up the removal of the 10p band for everyone execpt pensioners (the majority of which actually vote).
After all he is planning to borrow 100% of GDP this or next year (and that excludes off book monies).
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Nick
Come on cut through the spin -
SPIN:
Brown wants his supporters to think that he is hammering the very rich, so his massive 'tax bombshell' will not cost them anything.
TRUTH:
Won't raise enough to even start to cover the interest on his new borrowing.
Its just a big headline (with little substance) to distract from the usual nasty small print that Brown always has in his documents.
ps. What are we paying Darling for?
pps. Has mandleson told you about his EU Tariffs talks with Oleg yet ?
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Ive just heard that the tax rise will be after the next election so that labour can not be accused of breaking their election promises not to rase income tax....
What was the abolising of the 10p bad? that was a increase in tax...
What was the introduction of "Top Up Fees", a tax on the young wanting to go to university?
What was the abolishng of dividend tax credit... a tax on private pensions
What is the double/tripple CPI garanteed rail fair increases... a tax on the workers.
What was the increase in NI.... a tax on the employed.
And dont even get me started on why my council tax has gone from £679 in 1997 to £2215 this year.
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Interesting idea.
Quite a good idea in some respects, explaining what they plan to do after the next election, and it'll be popular with ordinary people.
But would they actually do it if returned at the next election. Probably not. Once the ordinary people on ordinary incomes had returned them, Labour wouldn't care. They've got power again so they would return to doing what they jolly well like irrespective of any criticism. They would no doubt find a way of looking after the big earners in the city.
Remember the pledge not to privatise Air Traffic control...
Labour can't be trusted.
Experience has shown that Labours election pledges are worth as much as the pledge that Neville Chamberlain once famously obtained from a certain foreign head of state...
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Whatever the Chancellor does, I am sure will not be bold enough. To be bold, he would need to scrap VAT on Electricity, gas and coal supplies. That would immediately benefit everyone. He should scrap Trident; bring our troops back from Iraq and Afghanistan, and from the billions saved, lower Income Tax rates. Will he do it?. Not on your life. He is too cautious - too "prudent". Too timid.
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Nick, when the tories change their minds on their committment to spending it's
"Tories free of spending commitment"
and
"The Tories are no longer committed to matching Labour's spending plans."
When Labour change their minds it's
"Labour set to break pledge over high earners' tax rate"
I am sure that all the sentences you use are factually and gramatically correct just that with the Tories you use warm and friendly words like freedom with Labour you use cold and threatening words like U turn or break of promise/pledge.
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"I design electronic hardware, software and firmware for solutions, hopefully, that will help solve environmental problems in tomorrows real world."
Chuck, the bigest thing that the electronics industry can do now is produce solar cells to retail below £100 per 1kw, and an inverter 5kw for under £500. Thus making installing solar panels on 60% of house roofs a no brainer.
At the moment even with the pittifl small grant a 5kw system will take 30years to pay for its self not the 1 to 2 years needed for mass appeal
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The real story is not the tinkering around which we are seeing trailed here; it is the changes in the story over the past few days:
http://cassiuswrites.blogspot.com/2008/11/real-story-over-pbr.html
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Strangely, I never said that. It was some other guy who's hiding behind the wall of internet anonymity and carrying a grudge over from an older topic.
In any case don't believe everything you read (or don't read) on the internet. It ain't necessarily true nor is something necessarily anyone else's business.
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Oh one one thinh Nick, can you please please introduce a G.Brown Smug-omiter, showing the level of Browns smugness....
It's nearly at 100% at the mo and will go thru the roof after the PBR.
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It seems more frightening that Brown and Darling seem to be trying to stage manage the crash story, unfolding it bit by bit with little twists and turns. I am most worried how this story will have developed in 6 months to a years time. I can't help feeling we're in the early chapters and this is not a romantic comedy but rather a tragedy of Shakespearean proportions.
When would they that cower and strain seek to be elected again? And when would we, so dour and slain seek a democratic agenda again?
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Never said what you quoted. I do other stuff.
But, yeah. You've got a real point with that energy thing. I've read stuff on some recent innovations and costs and if we're lucky the energy crisis probably isn't. Plus, if Africa gets its ass in gear it could easily become a net energy exporter.
There's a whole other bunch of technology, business methods, and other stuff people can run with that would give a kick to things and that's where, I believe, the focus really needs to be than dicking with "incentives".
This is really orthogonal to this topic but the general tax issue does, sort of, slot behind developing a better national business plan and attitudes. Hopefully, Nick will have the chance to cover some of that later.
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Today I received a mail shot from a so called respectiable loan company offering to lend me £300.00 and with repayments of £10.00 per week sounds good, small print repayment over next 12 months APR 89%.
not so good.
Replace £300.00 with £100,000,000,000. change the time scale with nothing to repay in the first 18 months then only £20 billion extra over your normal payments over the next ten years. Looks like the treasury is being run by the marketing dept of a well known furniture store.
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Nick,
if we are to borrow money from Saudi Arabia then there will be strings attached. Let me try this one on you.
Saudi Arabia is a strict Moslem state. So, usary, that is the banks making money through charging interest, something must be done on that.
Alcohol, Saudi Arabia is a Moslem state, so what do you think they want, they know that prohibtion does not work, so what better than to tax our love for alcohol. So, we must disguise the increase as a way to stop binge drinking, but increases in the tax on alcohol, we can't give the masses a tax decrease if they spend it on drink.
Something must be done about gambling, this is also anti-Islamic, and tempts the oil rich play-boys to be naughty boys, so something must be done about that. As well as prostitution, so Ms Smith has already made her announcements on that, can't have women being paid for their favours.
As for China, well we must do something about solving the problems of over production of goods in China, so we must ensure that the money we give back to people is spent on cheap Chinese produced goods, and not those expensive goods from Germany and Japan.
Our employment is now so distorted by public sector workers and those working for Quangos that we really don't register as a real economy anymore. We are all 'whores and pimps' to a labour government.
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well nick did you expect this government to keep to any pledges ?.
they have not nor will they all parties make pledges and once in power they reveal their true colours and this government is no different.
could it be that if the public are fooled by truth bending mp's for so long they loose interest and thus more self interested and media obbsessed mp's come to power thus you get neu labour, and todays tory parties.
dont the people deserve what they vote for?
or do the population as a whole deserve better?.
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Labour's pledge not to increase taxes on high earners has already been broken!
The 1% NIC increase on income above the higher earnings limit is a tax. They can call it what they want but it's 1% that the Govenment takes out of my salary. It costs me just the same as a 1% increase in income tax.
Why does the BBC let Gordo get away with these lies? The top rate of Government theft from my salary has been 41% for ages. Now Gordo wants to increase the top rate to 46%.
Please BBC, do your job, challenge Gordo on these things. There's no point talking to Darling as he makes no decisions anyway, just does what Brown tells him to do.
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Charles at #5 and others: you're obviously at Milbank this morning. Good luck in trying to make all this look sensible: trouble is pretty much everyone can see through it.
Reality: the 45% rate is a gimick designed to shore up core Labour support and re-ignite the good old politics of envy.
Why can we say this with such confidence? Because it will only raise £2/3 billion. But £15+ billion, excluding the interest thereon, is being raised. So call it £18+ billion by 2011.
The real point therefore is: where is the other £16/15 billion (I've included interest to 2011) going to come from?
Let me tell you: cuts in public spending and higher taxes on everyone, not just the rich.
This is typical New Labour spin: get the narrative focussed on the headline you want, deny or refuse the answer the hard qu's about the underlying reality - ie where's the rest going to come from - and bingo, yet another con trick on the public.
Nick - you really are a disgrace for not at least highlighting this. It's pathetic. The press are supposed to highlight fudge, not swallow it hook, line and sinker. The difference between 15 and 2 is pretty obvious, so pls pls at least get an answer for us on where the rest is going to come from?
This tax on the rich is pure political red herring. And there was our PM in DC recently complaining that he regretted Osborne at been 'partisan' when he dared to highlight the truth about sterling. Which btw I am sure will be down today. Just watch.
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Nick, you're right in this piece, that they have 'scrapped' their pledge, but not when quoted in the news piece as 'breaking' their pledge. The pledge is always for the next five year parliament. So if they don't introduce higher taxes until after this parliament, they have not broken it.
Quick question - what is your salary? Will you be affected?
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I am astonished at how the BBC (esp. Nick Robinson) faithfully reproduce another piece of government spin. All the news bulletins since Sunday have opened with the dramatic announcement (unconfirmed leak, actually) that the government is about to introduce a 45% tax rate; but there is nothing of the sort! Declaration of intent without a timeline or rationale, scheduled to take place "after the elections", are absolutely meaningless. But it grabs the headline, just as intended. So why do the Beeb and its senior editors fall for it (again)?
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I've read that there are some economies (Sweden, Australia, even Hong Kong!) where they have budgetary surpluses and are now looking to give these back as a way of riding out the economic turmoil.
Doesn't this give a lie to Labour's defence of their shambolic handling of the economy that it's a "global thing" and no fault of theirs?
Why doesn't the BBC do some research on this point rather than just accepting Brown's excuses?
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Nick,
just a couple of things.
Now that Campbell and Mandelson are back providing "advice" to the PM, we have this farce of parliament being bypassed, yet agin. The Autumn budget statement hasn't even been announced, and its content has been forecast and analyzed as if it has already happened. We're being softened up, again, to see what possible measures might provoke a major backlash, and what can safely be incorporated in the next actual budget, if there is such a thing any more. We're going to suffer, and be conned again, and still they can't face up to the absoulte truth.
We are in thsi current mess because, despite all the weaselly words that hevbeen uttered, for the past 11 years we have been over borrwoing and over spoending, and there have been no fall back measures in place for when the hard times come. Basically because Hugh Jeers claimed to have banished boom and bust.
And that brings me to the other thing. Every tenet of the governments fiscal and monetary policies over the past 11 years has now ben broken, and stood on its head, and we are expected to just swallow and say "Thnak you very much, sir". I don't thinks so, and if they think the people are just going to swallow, they're in for a shock.
Hugh Jeers, to quote you, "There is nothing you could possibly say now that I could possibly believe".
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You can almost hear the party whips calculators working in this pre advice.
High tax for the rich firms up the left wing of the labour party to balance some cuts in their beloved social security programmes.
The similarities to the depression solutions are striking (it is no coincidence that Obama wants the world to know he is reading up on FDR). One little remembered part of the solution the US implemented was to make it illegal for individuals to own gold. It forced the public to swap solid valuable gold for then worthless US Dollars inflating the currency.
To retain worth this money had to be invested against inflation which pumped the economy.
If you view the solutions coming out piece by piece I content that whilst, such a measure is unlikely to be repeated today (we just wouldn;t stand for it and it decoupled the dollar from the gold standard which can't be done twice), the financial conditions to inflate away the debt are being created and in such a way that they have to be clear but will not be announced as the policy.
Why - because the economy is sated on debt and the only people left who can afford to spend until they drop are those who have been prudent and are not already laden with debt (that can't be paid off) but are savers.
So what the governement is going to try to do is make it clear - your savings will be inflated away and when this is done you will not be able to afford those luxuries you were saving for. So if you want them, buy them now, borrow some money and spend it for tomorrow you will not be able to - we will be taking it in tax or via other measures.
IN this way instead of rewarding the sensible it will try to get the prudent to load up with debt to fuel the inflation to reduce the relative proportion of debt as a function of GDP back to sustainable levels.
The hope appears to be to try to do this in a 2/3 year time frame then when it has to be paid back the increases at the time will appear a little less awful than they do now - imagine - you still have to pay back 100bn but if you have inflated then this appears to be considerably less and hence less painful.
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Not really surprising that this is announced, ties in with the banker bashing that Mandelson was doing on the Marr Show yesterday. This is primarily a trap for the Tories, but I suspect that Cameron is too clever to walk into it, unreconstructed Thatcherites like Heffer will scream about it but no one pays any attention to them these days. Vince Cable put it well on 5 Live this morning, this top rate of tax will have minimal impact on revenue as those who will be targetted can afford good accountants who can find loopholes to get through the system such as getting their income assessed under CGT at 18% instead of income tax at 45%. This is the principle behind the Laffer(sp) Curve, the higher the rate of tax the lower the revenue raised.
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Nick,
when there are budget leaks should not somebody resign. Where are all these exclusives coming from, who is saying what to whom, is there a yacht moored on the Thames outside Parliament where dinner parties are being held and conversations being recorded. We must be told.
As for your namesake on the Today programme this morning, hey of course it's alright to tell us what is going to be in the crisis budget this afternoon. I mean it doesn't have any effect on the financial markets.
Also nice that he should pick-up on my theme that if you no longer pay a banker a million pound bonus then you don't half lose some income tax and national insurance, that money has to come from soemwhere.
I wonder how soon the VAT changes are meant to come in because I know that it is not easy to change any computer systems without encountering a few problems.
I hope that Alistair has checked with all the systems analysts as to whether or not they can implement the necessary changes in a timely fashion. Oh to be a consultant today, it will make the year 2000 bug a cake-walk.
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The COST to industry of a reduction in VAT will be considerable. Reprinted price lists and brochures, changes to websites, reprogrammed computer systems etc etc. Obviously it will reduce the headline inflation rate though, which would otherwise go up massively in a couple of years after Darling's £100bn borrowing spree.
An income tax increase for top earners. Heard that before in the 1970's. Some of us still remember Denis Healey promising to "squeeze the rich".
And in true New Labour fashion, they selectively leaked it to the media in advance.
This all should be good to turn Labour's coming election defeat into a rout. Roll on!
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Labour break another pledge - shock.
Fascinating insight.
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At a casual level, it looks like things are winding back the mistakes of the past 50 years and putting industry and a fairer society back on the agenda.
The rough outline of the tax plan looks like a groundbreaking shake up of the system, and Mandelson hasn't even got started on a matching plan for business.
People asked what happened to the post war dream. Well, Britain threw it away with bad management and greed. This looks like things are being put back on track.
So, waddya want, fireworks? A pet pony? People can spend so much time wanting stuff that when they get it they miss the moment. Jeez, c'mon. Don't be dumb.
Seriously, the science and historical norms and standards, and public opinion fit this policy like a hand in a glove. It's just a fact. Go check.
The management culture of superstar pay for routine performance has been blown apart, and the corrosive effect on society does drag things down and divide people.
Using loaded words and partisan comment won't change the facts. It just dumbs things down and gets people annoyed, which is why you said it. I wouldn't bother.
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#39
Whilst you point is a good one the consequences you theorise are unlikely, the strings are likely to be much simpler.
Do not spend any of it on renewable energy or any technologies for oil/gas replacement.
Job done.
We will then be unable to afford anything not made in China and the Saudis will be quite happy.
In a decade or two then China can ship it's manufacturing to the UK (locally we already have a chinnese factory staffed entirely by chinnese labour - this will then go home and be replaced by us impoverished Brits) and buy cheap goods back from us when they have generated enough of a middle class who no longer wish to work in dirty factories, after all, it will be cheaper to ship many of the raw materials from their African resource base here than it will be to ship to China by then.
China and Saudi don;t have the short term annoyance of democracy to stop them playing the long game. Things which are beneficial for the long term are rarely very popular in the short - hence in the west we will never vote for them.
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Dear Nick,
Paul Grey. civil service -
Pay Off £260,000 Benifits Disc scandal
Kevin Boston pay rise
£330,000 Sat tests boss
John Tiner FSA
£445,000
Sir Callum Mcartney FSA
£450,000
cLIVE bRIAULT nORTHERN rOCK,
£883,000 plus £500,000 after resigning over Northern Rock
"BUNGLERS AND THE SCANDAL OF Public sector FATCATS who pocketed Huge rewards for ripping the public off for Failure,"
These people are nothing but leeches,
they know that even if they stay in the job for year, they will receive a massive pay off weither they succeed OR Fail this is NOT Commercialism talking this is the "OLd School Tie", May be EVEN the "MASONS" , this scandal has to stop, these leeches, are degrading evrything the Ordinary man and woman works for,it is they who MAKE AND KEEP this Elite in the way they expect. they are rewarded even if they resign, where as the ordinary worker gets NOTHING,---- even their house This is the British Establishment at work, looking after their own, the rest do not count,
I think the tide is turning, when Companies such as the Utilities, raid direct debit accounts, and force entry into peoples homes by Baliff action to install meters, then we have turned the corner into a Communist regime, this is wrong, and its is unacceptable in Britain today, these people should be reigned in and put in their place, if the general public did this,they would be locked up, and because they are of the OLD SCHOOL TIE, AND THE ESTABLISHMENT they ARE ALLOWED to get away with it. and this why the tax payer is going to suffer to keep the Establishment in the way it has become accustomed.
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Top earners to 45% tax ..... a joke.
Top earners are all Limited companies like most of the major BBC Radio or TV Presenters such as 'Wozzy' or Victoria Derbyshire (she told.
For those who are wage slaves that means that they declare a small income of about £7,500 pa, & then declare the rest as 'dividends' on their 'shares', which is at 25% tax (it may be only 20% as well). .... total tax liability on earnings up to £250k is only 20%, less on average than me or you, who earn on less than £100k.
Reforms are needed to tax laws.
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The best way of judging how all this will go down with Mr Ordinary, will be to look at the headlines in the tabloids tomorrow.
The vast silent majority of people don't give a damn what is proposed for the short, medium or long term, and as for stimulus, why bother?
These folk will still crowd the "xmas sales" as if there is no tomorrow-"Put it all on the never never- what the heck?" will be the cry.
All this group usually do is look for someone to blame when shot by massive winter fuel bills, threatened job loss and huge council tax rises expected in the spring. They might even go crying to their union bosses and get support for strike action.
One thing though is most likely.They will not vote Labour again.Either Old or New.
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All this guff about taxing folk earning 150,000 at 45% is just a smokescreen.
What's the point of raising 3bn quid if you're squandering 15bn quid?
There are only limited possibilities. Either the 15bn quid simply gets added to the national debt and the 3bn in extra taxes is just to pay the interest. No plans at all to ever repay back the 15bn quid. Typical of this governments approach over the last decade. So possible.
Or the 'squeeze the rich' is just a headline policy to distract from the far higher taxes they'll be raising off middle and low income folk by simply messing with the tax-free allowance or setting VAT at 22.5% at some point in the future.
Or that with the hyper-inflation they're currently teeing up in the pipeline that in a couple of years time the minimum wage will be 150,000 and we'll all be paying 45% tax. But for now, since it only affects GPs and the few people who'll have a job left in banking then most people won't care how much folk earning 150K get taxed.
One thing we know for sure. This budget will not do what it says on the tin. We've already had a 'fiscal stimulus' of 2.5 to 3% of GDP for the last five years or more and we still have a massive recession looming. I don't understand how changing from a 3% 'fiscal stimulus' to a 4% 'fiscal stimulus' is going to make much of a difference. In fact the final deficit this year is projected to be well over 100bn quid. Which looks a lot like 7% 'fiscal stimulus' to me.
So what difference is an extra 1% going to make?
Whose precious jobs will we be preserving with an extra 15bn in borrowing? Retailers? Bankers?
These jobs are only there as a result of the unsustainable debt we've been building up over the past decade. Getting into more debt just to keep folk in their unnecessary jobs for an extra six months or a year is not going to change the underlying problem.
We don't need those jobs. Those jobs are unsustainable. They only exist when government is doubling national debt and house prices treble in a decade. In a balanced economy, balanced budget environment those two million money launderers at the banks and high street stores are superfluous. Likewise the million extra public service 'workers' conjured out of the ether in 2001/2002 by Gordon Brown.
Their jobs don't exist. Their jobs are ephemeral. Their jobs are purely an artefact of a trillion pounds of additional government, business and private debt. Utterly unsustainable.
We simply aren't rich enough either as a government or a population to justify all these banking, retail and public service jobs. Absent the ludicrous levels of borrowing of the past decade then those jobs are utterly unsustainable.
Like the miners.
It's time to let go.
The 'difficult choice' would be to tell the truth.
The easy choice is just to spend even more money we don't have and attempt to sustain the illusion for a while longer.
I wonder which one Gordon Brown will go for. Truth. Or fiction?
Since we're currently all embroiled in Gordon Brown's fantasy-land I'll go for further fiction.
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#53
You quote me but partially. Can you also please answer the question I posed?
The government are borrowing £15 billion. They are planning to raise £2+ through this tax on the rich.
Where is the remaining £13++ (once interest is included) going to come from?
Higher taxes on everyone or severe cuts in public spending after the next election?
You seem a well informed, thoughtful and sensible chap. So I look forward to your answer. Thanks.
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"Seriously, the science and historical norms and standards, and public opinion fit this policy like a hand in a glove. It's just a fact. Go check."
Umm, what? Science? Are we talking about economics? Its called the dismal science for a reason.
There isn't anything intrinsically moral about taxation, in fact its merely a necessary evil and should be viewed as such. Tax is theft - the idea that a woefully inefficient bureaucracy run by a clique of out of touch and often corrupt politicians can spend my money to improve my life better than I can is ludicrous.
Incidentally the antlike communism espoused by Plato is hardly something to be banging on about either. I woulda thought being a developer you'd know what a Stotle is. ;)
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Very few will care too much about the impact on this on the few people it will affect.
The important thing in this announcement is that labour are abandoning the entire income tax pledge.
Once the pledge is gone (under the guise of 5% for £100,000 plus), they will feel free to put up income tax on everyone.
Go on Nick, get a new pledge from them - that this will be the only income tax rise if they are re-elected.
ps. Any update on Mandleson/Oleg?
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I agree with other posters who question the nature of this story.
Is not (part at least?) of the story the way in which the BBC is being used as a Government mouthpiece?
"Government Propaganda" is perhaps too emotive a phrase, but it is clear that the initial story was "leaked" to the Beeb and then the Government line has changed with the perceived reaction and further changes to the Government’s plan have also been leaked direct to the Beeb. The BBC is, it appears, being used to by the Government, to announce its headlines.
Surely this is a matter (a) of news itself (don't protect your sources, let us know who is doing what behind the scenes) and (b) an actual, proper source of complaint (regardless of one's political position)?
There is a line to be drawn between scooping other news organisations and simply acting as a PR representative for the Government.
The BBC should be like Caesar's wife - not only be independent, but seen to be independent of ALL political influence.
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How stimulated would you be by a new loan that has to be repaid? as compared to a straight cash gift?
If Brown is so sure that this 'stimulus' will work, then why fund it from borrowing? Why not fund it by selling some of the gold that he has left? (he didn't give all of it away did he?)
He doesn't do this because he knows this is a massive gamble that he may well lose. And having given away half of the UK's gold, he doesn't want to be the person who gives away the other half.
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Let's get this right.
The government are giving us back 1% GDP in tax cuts?
Food? No Vat.
Energy? 5% rated - no effect.
Consumer goods, cars, etc.
They are being hit by price increases because of weak Sterling. A temporary 2.5% cut in the face of a 25% price rise in imported goods.
Drop in the ocean. Negligible impact.
Explain then, when the economy contracts 2% GDP next year - how to they propose to make up the short-fall?
Those 'evil' bankers and banks were chipping in 40bn in tax revenues.
or 3% GDP.
So really it's a 5% GDP contraction in the government finances or £80bn a year.
Not to mention the lost taxes through unemployment and more costs in extra welfare payments.
Taxing those earning more than 150K?
Dog whistle politics.
Also, no 'leaked' announcement this weekend?
Why?
They wanted to skewer Cameron with it, get him on TV and then have him oppose it.
"Cameron protects the well off" is the headline.
How predictable.
Partisan Brown playing games with an economy on life support to save his miserable career.
Let's face it, it's not as if he had one before politics.
The repayment plan is a mere drop in the ocean to the 300 BILLION that'll be owed and he is not being honest with the public.
Will he tell us how he proposes to pay back the full amount?
No. Because that means electoral oblivion, that's for the next government to worry about.
It will mean this:
No tax cuts for the next 10 to 15 years. In fact, increases are far more likely.
Higher interest rates to make the government debt attractive. So higher mortgage costs for ordinary homeowners.
Sterling in the toilet because no-one wants a currency that under performs.
And an economy that lags in growth behind its competitors.
Which means?
All those pensions, the unfunded state ones and the prudent people with private ones, don't get the investment growth.
So they can expect a much smaller pension in retirement - more strain on the public purse in the long term.
Basically Brown and Darling have wrecked the economy for three generations. Laurel and Hardy economics, another fine Labour mess.
Despite the 'New' moniker, they join that fine rogue's gallery of Callaghan and Healey.
The last time the PSBR breeched 50%.
Not forgetting all the 'assets' we currently have that are off the books.
Devaluing nicely becoming liabilities and nowhere near worth as much as when the government bought them.
And they think they have a chance at the next election?
Dream. On.
The writing is on the wall for any public 'servant' that's not a Doctor, Nurse, Paramedic Policemen, Fireman or Soldier.
We simply can't afford you.
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Alistair Darling will say that the income tax rise will only happen if Labour is re-elected
Phhewww thats OK then.... cat in hells chance of that.
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I dont like the road we are on just as much as any one else. I really don't here much in the way of alternatives. The economy needs stimulus. The banks around the world have created this mess. The actions of other governments suggest that Brown had to do what he did. I am not putting him on a pedestal but we are where we are. Its easy to moan and churn out the same old anti-government stuff. Anybody, including me, can do that, but at least there is a purpose in their activity. I listened with care to Cameron yesterday and he really has nothing credible to say. About anything. Maybe big Vince at the LIbDems has credability, but will never have the responsibility..
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Well here I have even more reason to leave the country.
I work hard, I trained hard and had to fight to get where I am. I did not have a privilaged upbringing but just have a strong work ethic and I am ambitious. I want to show my children that hard work can be rewarded. But I am beginning to doubt it.
So now I must pay more tax to subsidise all those who borrowed too much from sheer GREED. Too many people want everything but wont work for it. They wont buy second hand, they want the latest and they want it now. We waste too much on benefits, we are a nanny state that allows people the choice to work or not (and politicians cant tell me otherwise as they are spineless).
I have a mortgage and no other loans, I went without if I did not have the money. I am in that middle band of people who subsidise the welfare state but will work until 65 as I am not a super earner (I am a higher taxpayer). Too many people do not contribute in this country and I dont refer to immigrants. There are too many lazy, sponging families in this country who cost honest hard working people of all tax brackets BILLIONS so they can have Sky TV, cigarettes, alcohol, Iphones, holidays, cars, free school dinners, free cavity wall insulation and so on. This is the real problem. Taxing the 150k+ people will make no difference. Just make them wonder why should they bother, the country i lucky they bother at all. And I am not interested in any claptrap about equal opportunities and how others have it easy. Pensioners now had it much harder financially than we ever did, they were not greedy. This nation has a massive burder called the welfare state and it needs halving NOW. Its there as a safety net but is now a fishing net. tackle this one governments and you might find some support out there, remain with your insipid vote winning policies and it will only get worse. I now fully plan to leave this country with my family and take my tax contributions with me, I like so many hard working families are fed up with footing the bill for SPONGERS.
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63. MaxSceptic
Max your getting nuked. must have found a raw nerve.
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What confuses me - and I am easily confused - is:
Banks borrow to keep in their vaults.
Banks charge us more.
Banks will not lend to each other.
Banks pay us less for keeping our money with them.
The economy is in crisis. We are all doomed.
The answer?
I, that is the poorest in the land, must spend, spend, spend money we haven't got.
Er.........
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Nick you are a disgraceful reporter
We all know that every hard working Brit will have their direct and indirect taxes increased to pay for this mess by Brown. Why don't you try and get an answer from this unelected man
Brown is ruining the economy, knowing full well that he wont be in power to clean up the mess
That man is a disgraceful PM and is an embarassement to all us English guys
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I just wonder why this story is getting so much attention, because its the same empty rhetoric that we've had over the past decade: we might do this, we could do that, we're going to definately do something.... but then nothing happens.
Its all to grab headlines and an impression of the Labour party in the minds of the public without ever delivering on anything.
When Labour commit it to a manifesto for the next election, put it in the news. Until then, it should be a sidenote, not headline news.
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Ref #9 etc. Chuck, you are priceless. I have not laughed so much since the last time I passed my fags around in a non-smoking pub.
You are Mr Nick in disguise, aren't you?
A breath of stale air in our otherwise overtaxed, under-appreciated, lied to, Nulab lives.
Bring it on!
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Nick,
I listened this morning to the speech given by the chancellor to the CBI this morning. Oh, go on Terry it wasn't the chancellor it was the man who is both Chancellor and Prime Minister. What exactly is the point of Alistair Darling. What exactly is the point of the speech to that thing which passes as parliament nowadays.
What is more important? The murder of the British citizen in Pakistan resulting from a Drone attack from an American 'flown' Predator. Now, we have the appalling situation where an alleged terrorist is killed, mind you they were after somebody else, so I suppose that he is collateral damage.
Patrick Mercer, the conservative, has quite rightly picked up n this one as well, and I congratulate him. If the report on the Today programme is to be believed then for somebody to say 'this country (Britain) is a safer place today' for the death of this man is a travesty of what I know as justice.
If there is a suspected terrorist then they must go through the due process of an arrest, and a trial. Not an execution. This is turning into another day to bury bad news. Watch this space, this is not acceptable.
Mind you by murdering these suspected terrorist it gets away from the jury trials and the expense of keeping terrorists in jail. Also, they can't be extra-ordinary renditioned, if they are dead, can they? We need to know what the policy is. Where is the Milliband person telling us that he wants ptotection throughout the world for British citizens. What just like it says on your passport.
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Nick Robinson, Have I missed it but where is your outraged analysis of the pre-budget leaks which have come from the Labour government these last few days?
Today's statement is officially a pre-budget report but the reality is that it is a mini-budget with significant tax changes. We heard a lot from Labour about "a breached convention" - repeated stridently by its media supporters in the BBC and elsewhere - when George Osborne commented on a possible fall in sterling. There was no such convention in Osborne's case but there is about disclosure of budget changes.
With honourable politicans disclosing budget changes is a resigning matter.
With an impartial and vigilent media that is a major story. Why aren't you chasing it?
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Taxes or future growth.
It's doable.
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Here's a few 2007 budget quotes from the Great Man himself:
"we will not take risks with or break from the stability essential to our long term economic performance"
"our fiscal discipline is the foundation of the strength of Britain's finances. Our first fiscal rule is that over the economic cycle, government current expenditures are paid by tax revenues"
"next year, in 2008, alongside North America, our growth will again be the highest in the G7 - between 2½ and 3 per cent - with the same rate of growth also in 2009 - under this Government, with stability in this as in every other Budget the foundation, sustained growth year on year"
"after 10 years of sustained growth, Britain's growth will continue into its 59th quarter - the forecast end of the cycle - and then into its 60th and 61st quarter and beyond"
It's a wonder to me sometimes why we don't have more public demonstrations against the liars and charlatans who currently hold public office.
How can Brown sleep at night when he considers what he's done to and intends to do to the economy?
All that guff about the problems originating in the USA is classic Brown-speak.
We've been heading for this day of reckoning for ten years - uncontrolled increases in private and public debt, a price-bubble in the domestic and commercial property market, dreadful waste and extravangance in public spending, an over-reliance on the casino market of spivs and chancers in the City to keep the tax-revenues pot boiling.
I for one, won't be hanging around this country come 2010 to feel the effects of the backlash, when Brown's debts are finally called in.
And one thing's for sure - those responsible in Government won't suffer with their gold-plated pensions to look forward to.
What a shambles!
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Hi Nick
This is it, the big one. This is a massive test of the BBC as an independent and bi-partisan media outlet. In short do you nail Labour's lies or go along with Mandelson's narrative?
Er this is the BBC, i.e. pro-Labour, pro-big government, pro-big state big spending, pro-high tax. Whaddaya think?
Do you point out that a 2.5% cut in VAT is trivial?
Do you point out that a 45p tax rate for those earning £150K (or is it £175K) will generate very little revenue and high earners have a habit of disappearing when taxes rise?
Do you point out that our personal borrowing levels are the highest in the developed world (178% of income) this fuelled the mirage of the "Brown Boom"?
DO you ask which other economies are looking at a deficit approaching 10% of GDP?
Do you ask why Northern Rock and B&B
had to be bailed out of supposedly an American economic problem? They are British banks, lending only in the UK in a regulatory structure designed by Mr. Brown
I fear that your BBC coverage will be little short of a Labour Party Election broadcast.
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Re-arranging the deck chairs - the sum raised is equivalent to a rounding error in department budgets.
This is the equivalent of the 10p budget - pure politics designed to wrong foot the opposition and lay down a false trail for the newshounds. As usual, their noses are to the ground and their tails are wagging -meanwhile the real story could emerge this afternoon.
Let's wait to hear what Darling has to say about reducing waste in public spending to help defray the enormous level of debt we are all due to be saddled with.
Hello - why wait for 11 years to tackle waste?
Could it be because Brown created it?
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Max,
What is happening to your comments - everything is being referred??!!
The thought police appear to be out in force today.
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Latest poll from ICM:
Conservatives lead Labour by 11 points
http://ukpollingreport.co.uk/blog/
I doubt the beeb will shout as loud as when the MORI came back with a 3 point gap.
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Well - if the leaks are true - then clearly there is even more evidence that Gordon and the gang are just way out of their depth and are just thrashing about trying to save their reputations, rather than do anything to benefit the country.
I'm not old enough to remember the last time they bankrupt the country - so I'm looking for some assistance....:
My concern is that if sterling crashes my savings will become worthless, like Zimbabwean currency. If there is anybody with experience of the last time / financial nous out there - my question is "should I exchange my sterling savings for gold?"
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#79 - not a great answer! Taxes on whom? This is a £13 billion++ hole. The rich are already paying an extra £2 bn. Even taking their tax to 50% still leaves a hole of £11++ billion. Bottom line in your tacit admission: we're all going to pay higher taxes. If that's Labour policy, that's fine. You just need to sell it to us, the taxpaying public. No need to be underhand about it. We can then decied for ourselves. Thanks for the admission.
Nick, please note. Please ask GB and AD how the rest of us are going the pay. The rich pay an extra 5% tax. What will the rest of us have to do to fill the hole?
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No-one has reported this...
Once the national debt ballons by another 300 Billion.
at 5% interest...
That's 60 BILLION a year in interest.
or twice the defence budget.
Future growth?
Yeah, future growth over about 20 years.
Not exactly one economic cycle (approx 10 years) is it?
This is a UK problem, not a US one.
Why isn't the UK doing what Ireland is doing?
Slashing government spending, slashing corporation taxes and introducing austerity measures.
Oh, because the public sector is beyond reproach.
Or is it they vote Labour?
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76 - Your comments are as disgraceful as those of Mercer and Dinsmore - both of whom should be SACKED by their Leaders.
If true,the death of Rasheed Rauf should be welcomed.He is not "an alleged terrorist", he is a convicted terrorist of the worst kind.
Maybe the US nad UK should send a few more drones and target these excuses for mankind.
I find it incomprehensible that any MP,least of all a Tory MP,I expect better from them,Labour has always had weak apologists for terrorists,can stand up for the human rights of a convicted killer.
Lets consider the human rights of those hundreds Rauf has been complicit in murdering and the thousands he may have been complicit in killing had he been allowed to remain free.
There is no excuse for Muslim/Islamic fundamentalists killing innocent people wrongly quoting the Koran - or any other scripture - to stand by and to complain about it is in my opinion as bad as taking sides and supporting it.
Mercer and Dinsmore should be ashamed of themselves.
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Nick,
your blog has become the source of such brilliant stuff. We now know that labour party officials are scanning your comments even as we speak. Speeches rewritten right up to the point of delivery, this is brilliant, really cool.
I think that you are what is called a wind-up merchant, a bit like me if you like. Somebody has to say something so that others can comment about it. For example, some stories just die, they disappear without trace, only they don't really. They go into hibernation.
What I always will remember is the Watergate scandal with Nixon. I saw the first reports and then wondered just why it disappeared. What was going on. It was, to put it mildly, quite an interesting story that some people had broken into a room and stolen some political stuff. But it just disappeared.
Only some sort of journalists from the Washington Post would not let it go, they perservered, they eventually got to the truth and exposed the awfulness of the Nixon regime.
I like to think that you actually know more than you let on, but can't tell us. You and the BBC can only hint and leave us to get to our truths. It is the lies we were told over Iraq, they will not go away, the complicity of those now in power, I for one will probably go to my grave shouting and screaming that these politicians have blood on their hands. I can say it, you cannot. You have a job and a career.
Do you know that is why I feel so ashamed about what happened to Dr David Kelly, and Mr de Menezes, and all the soldiers who have died, because of a lie.
Oh, just to go off on a tangent for a moment, incinerators for disposal of recyclable material. They must be built, to generate the energy we will not have because of lack of power stations. Every community must have one, you produce the waste, so you must be responsible for its disposal. we are after all being told that this waste is now building up all over the country because nobody actually wants it.
Oh, and house building. How on earth can anybody complain about the destruction of the countryside if it means that there are jobs for the construction industry. Destroy the country to save the economy.
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Nick,
You must be as old as me, therefore you must know what it was like to watch the death throes of previous governments. Surely to goodness even you can recognise that this government is just about dead, and all that it is now doing is thrashing around mindlessly. There is no sanity in accepting that a future 45% tax rate on incomes above 150k will solve the problems that will be created by large scale borrowing to allow a general tax cut to-day.
I tuned into 5 Live this morning only to hear Nicky trying to get Cameron to oppose the proposed tax rise (that hasn't even been announced). Likewise, Marr giving Cameron a hard time yesterday, having missed the opportunity to do likewise to Mandy only moments earlier. Rather than trying to solve the long term problems - Brown is only out to try to wrong foot the Conservatives with little or no thought for how we need to deal with the current financial meltdown.
What is worse however is the way in which Mandy and other Labour ministers are getting an easy ride from the Beeb when they go on and on endlessly blaming our problems on everyone else. You should try reading Dominic Lawson's article in the Sunday Times - perhaps then you might (just might) begin to understand that there are two sides to this story, begining with how on earth we go into this mess in the first place.
#67 - ...Flanflinger - I can't say that I found your post particularly appealing, but I agree with most of the analysis. However, the one group of people you forgot to point out as being relatively safe are those that work for the Beeb - public sector workers in all but name.
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In answer to a Parliamentary question in 2006, the Treasury said that a 45 percent rate on those earning over £150,000 would raise only £1.2 billion.
Where does the £2-3bn come from? No analysis of the underlying benefit claimed by LuBab from the beeb, let along highlighting in the strongest terms that its a purely political move on a day we were promised that Brown would do "whatever it takes".
....and VAT. Aren't prices being slashed by more than 2.5% anyway in a bid to try and move stock (M&S 20% off day, etc) without success...?
Worse than useless. Watching his smug performance on Marr yesterday, anyone would have thought that he'd won X-Factor rather than knowingly led the UK to the abyss.
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Expect Weimar-style repudiation through inflation.
It's the only way out NuLab have left us.
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This comment was removed because the moderators found it broke the House Rules.
How about making it 50p in the pound and doing something to raise the lower paid out of income tax altogether?
It is time to remodel the tax system to reward real hard work.
New Labour is far too conservative!
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Surely Darlings biggest opportunity is to tighten up on tax evasiona nd fraud.
Offshore and via bogus and false accounting at home.
He has the opportunity not only to scrap planned reductions in HM Customs and Revenue staff,but to INCREASE them and to target them at the anticipated £15b/£20bn PER ANNUM blagged and deceitfully stashed abroad and in tax havens.
He should also impose an immediate windfall tax on utilities,place an immediate law banning them form raising prices over the rate of inflation and if they dont and wont comply he should re-nationalise them for £1 -
That potentially can raise another £20bn over the next 18 months or so.
With respect to mortgae reposessions,12 month amnestys like the Daily Express are calling for are frankly barmpot - if mortgages are'nt paid Lenders i.e banks will go bust - a better solution is to say if you maintain regular payment of a minimum of 80% of interst due - you cant be reposessed if you do this for 6 consecutive months and arrears then have to be capitalised.
He could reduce I/Support on mortgage payments down for 9 months to around 3 months BUT limit it to interest on only the first £150k of any mortgage - removing the anomoly of the 80's and up to 1995 when millinaires had mortgage payments made for them after claiming benefit for 8 weeks.
Finally,some of the calls on Nick Robinson are again absolutely disgusting - unless he comes out and issues a rabid pro Cameron comment most will slag him off - all WE THE MAJORITY of sensible people ask for is fair reporting of the actual measures,fair reporting of the actual debate and serious analysis after the event....not pre-judged dogma!
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Why all this bleating about leaks?
Does'nt matter what political party was making todays speech - there would be leaks....
Get over it!
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Be prepared for flim-flam and smoking mirrors. GB will state that the world acknowledges that we need a stimulus to avoid a very deep depression and that may require increased borrowing. What he will fail to admit that the rest of the world is not already in hock to its eyeballs, unlike UK.
He will offer VAT reductions (which will save most of us a few pounds a month) and promise us tax increases that will cost us pounds a week.
I would urge everyone to squirrel away any potential pennies that Brown directs Darling to give us cos we will need to find pounds in 2 years time.
And those who can afford to emigrate should start packing our bags. Who know's even Zimbabwe may be a more attractive proposition by then!!
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#89
Neither is there any excuse for misleading this country on the back of a PhD thesis plagarised by the Labour Party and spun as intelligence.
Nor hounding a thoroughly decent man and WMD expert to death.
Nor sending our fine armed forces badly equipped to fight.
Nor allowing our Commonwealth soldiers right to stay having done their duty.
Whether or not this man was or was not a terrorist is moot.
The fact is, Labour's prosecuted a war on shaky evidence and in a half-baked approach. Oh how you throw your hands up in disgust at a mere suggestion of juris prudence but turn a blind eye to Guantanamo Bay?
There are British families losing fathers, mother, sons and daughter.
Helicopters promised that never arrive.
Snatch Land Rover relics not fit for duty.
Our injured and maimed not given the care and dignity they deserve.
Faux outrage for political point scoring is disgusting and you should be ashamed of yourself.
Labour's has nothing but contempt for the military covenant.
So button it.
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Gloom and Doom is everywhere but perhaps it should be called realism.
This from CNBC last Friday. If you get a chance look at the video at
http://www.cnbc.com/id/15840232?video=935472423&play=1
Anyway to quote{-
It's not preferable, but all major U.S. financial companies will eventually be under government control because the alternative is so much worse, Hugh Hendry, chief investment officer at hedge fund Eclectica Asset Management, said Friday.
"All financials will be owned by the U.S. government in a year," Hendry said. "I bet you."
Nationalizations take dramatic losses from the private sector and places them on the larger balance sheet of the public sector, he said.
"It's not good," but society is vulnerable and society is going to have to intervene, Hendry said.
Shareholders Should Get Nothing
Because the taxpayers are forced to foot the bill for bailout out the banks, shareholders shouldn't be compensated, Hendry added.
(Watch the accompanying video for Hendry's full comments...)
"Actually the shareholders of Citigroup have looked the other way for more than a decade" while management took excessive risk, he said.
Shareholders should take nothing away if it is nationalized, because the taxpayer will be "paying this for a long, long time," he added.
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Charles_E_Hardwidge wrote:
Where is the remaining ?13++ (once interest is included) going to come from?
Taxes or future growth.
It's doable.
Well it won't be future growth as it will take decades for the growth to cover the increase in spending.
So the question should be - what taxes will be raised?
Although, I am sure I have heard of this tax increase before - didn't the Lib Dems propose an increase in the higher rate of tax. Only from what I remember it went further and the benefits were to be a decrease in taxes for the lower and middle classes.
The big thing here seems to be a decrease in VAT which won't be a massive benefit to people day to day.
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Do your proper job Nick & stop passing on the Labour spin.
Brown wants us to think the rich are paying the debt, whilst it is £2bn out of a £100bn debt.
Who's paying the rest?
Biased Biased Corporation.
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81 Brighton_Mike
Totally agree with you there.
The countries finances have been wrecked for a generation. Brown is not going to fess up any time soon. He will continue to make short term tactical decisions that he hopes will help him get elected.
Trouble is we need a PM who is capable of confronting the mistakes and ignoring short term popularity and to set about repairing the country.
The next election will be a horrible election to win.
On one hand you want the Conservatives in to fix the problem. On the other hand, you know that Labour will bleat because they won't like the taste of the bad medicine the Conservatives will need to dispense in order to fix the country.
In that scenario Labour will once again make political capital out of the pain someone else has to go through in order to fix Labour's arsenal of mistakes.
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Why don't you make a simple, none biased statement within your article?
Brown and Darling do not have a plan they are making it up as they go along lurching from one stop gap measure to the next. Because they have run out of areas to plunder but cannot bring themselves to say what we all know, including you Nick, that it is a consequence of monumental waste, the problems are insoluble unless they do the one thing the Unions will not allow them to do i.e. cut the bloated public sector. All this tinkering and now the appalling suggestion being floated that only the interest on the new debt will be funded from tax increases leaving the bigger debt for future generations is criminal incompetance and the BBC should be asking and not just meakly going along for the ride. Please challenge them more it is bankrupcy for all our children and grandchildren.
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99 Rauf was a convicted terrorist - he was not properly guarded by Pakistani guards considered sympathetic to Al Queda.
I made no comment about Iran nor Afghanistan nor David Kelly.
I referred specifically to a known Al Queda member thankfully no longer around to peddle his brand of evil.
No doubt you will be content that at least one of the disciples of 9/11 7/7 21/7 are now eradicated or are you seriously in support of such barbarity!
"To step aside is to take sides" - Bantu Steve Biko - commenting on the evil that was apartheid
This killing has nothing to do with Iran or Afghanistan , or David Kelly - it has to do with the eradication of a known evil terrorist.
Your complicit denial of this makes you as palpable as they are...
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We haven't had the statement yet, but please Nick, and any other commentator you can get to listen, look into and through what has happened.
Hugh Jeers presided over a comfortable 10 year economic cycle, when the economy kept growing, and providing a steady and increasing level of government revenue - tax.
Did he use those flows to reduce the overall level of debt? No because it's as high now as it was.
What did he do? He increased the level of spending, increased the tax take (identify something aprtf from food ansd kids clothes that ISN'T subject to some kind of tax) and borrowed. In his misguided world, where he had banished boom and bust, the underlying stream of income, which he was committed to spending forever, was never going to dry up.
Guess what? It did. Tax revenues are down and, based upon the new reality, going to stay down for years to come. What is going to replace financial services as the cash cow in the foreseeable future?
What room has he got to manouevre? None, which is why we're sitting here waiting to be told the bad news.
Is he being held to account for what is now, transparently, his appalling history of mismananagement? No, because that would be unhelpful in the current situation, and this is not the time to point the finger of blame.
Well, just get him to call an election, and we'll show him how to point the finger of blame.
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So they can't raise income tax without an election because it was an election pledge?
Hang on...another pledge was that a certain tony blair would serve a full third term
Just hang on in there til 2010 Gordon, see what it does for you
(I doubt he cares - he will have had his three years in history as prime minister)
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re: 50 Adam_C_UK wrote
Very true; I design/build websites for a living, and the tax element/logic for old/legacy systems is often too complex/awkward to be able to change, especially when it comes to reporting historic orders for accounting purposes etc. If you change tax-rates mid-year then it often involves a total restructuring of half the system to be able to work and can potentially cost many thousands of pounds to achieve. It will be a huge cost to businesses, especially small businesses with websites.
If a computer system has been properly designed then it'll just be a case of flipping a switch, but most systems I see aren't like that; when I work on a system I haven't seen before they're normally a collection of old systems, bodges, patches, and are a nightmare to change.
Our company'll be fine because we built our own system ourselves and we designed it properly, so we just need to flip a switch. Other people who had their systems built years ago by people who didn't build-in this kind of contingency, and bodged/patched it along the way (ie most companies) will find this a nightmare and it'll cost them a huge amount of money. With this in mind I don't think they'll pass any of the "reduction" on to their customers; if they have to spend 10grand on their system to cope for a tax-rate change mid-year then they'll boost their pre-vat prices at the same time to cater for it so that their final prices stay the same.
Labour hasn't thought any of this through; everything about it is just plain stupid; massively expensive to the tax payer and companies, yet has absolutely no effect on individuals.
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Dunno. The projections I seen is things could get better after a couple of years. More fundamental stuff that needed doing anyway will take a bit longer but it's nothing too onerous.
I view this crisis like some kid that's fractured a bone and can't see through the pain so they think they're maimed for life, but who grows up to become a superstar athlete.
Problem is, some folks can't stop worrying it so are running the risk that the leg will have to be hacked off. That's a shade of dumb too far for me.
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#49 .. "I wonder how soon the VAT changes are meant to come in because I know that it is not easy to change any computer systems without encountering a few problems."
TAG,
I'v had a team spending the last 5 days testing every possible VAT change we can think off (including negative VAT and price banded VAT) on out IT systems. We are ready to hit the button on the anouncement!
I susspect every retail manager and accountancy firm has been doing the same thing.
If a VAT change is anounced, even if its only 2.5%, but delayed even by a day retail sales will stop dead in their tracks till it comes into forced.
We have already seen sales drop off since last Wednesday in anticipation of the cut.
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#89
'he is a convicted terrorist of the worst kind'.
Excuse me but would you be ever so kind as to tell the world exactly which court it was that actually convicted him, of being a terrorist. Again I know of none but I have an open mind.
Is this not the problem that I actually have to read all the comments so that people do not get away with making unsubstantiated claims of this type.
Make them by all means but at least try to substantiate your claim, like by saying he was convicted of terrorism at the Old Bailey in 2003, for example. Now you can't so don't trey to bring emotional claptrap into the discussions by making unsubstantiated claims.
I can't wait for parliament to be told what we already seem to know, anybody now think any more about telling parliament first. There is no longer any point about getting a minister onto the media the day, or morning, before an announcement to parliament because should they not say I will not discuss this until after I have told parliament, which is what should happen, so they should be asked questions after they have made their announcement, definitely not before. Because I think you will find that some last minute adjustments are made based on the reaction to the interview.
Why should labour politicians not appear on the media being questioned, oh, that's right the whole of government is working so hard to save the country, yes so that they can have their extended christmas holiday, preparing for the spring general election.
Action now, 'a stitch in time' has gone then, that was not a very good quote Gordon, consign it to the waste paper bin.
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According to the BBC report, the Maximum Leader has spoken...
'Borrowing billions to cut taxes is the only way to prevent a long lasting recession, Gordon Brown has said.'
Oh yeah. Says who? More to the point what would be a 'long-lasting recession'. How long will the recession last as a result of this increased borrowing? That's what I want to know. How will we be able to hold this government accountable if it won't say what benefit this extra borrowing will have.
Was it going to be a five year recession with 5 million unemployed but now it will 'only' be a four year recession with four million unemployed (and an extra 400bn of national debt). What are the alternatives? What choice are you making on our behalf?
Unveiling a major shift in Labour's economic policy, the PM said: "It is right to promote action now that prevents permanent damage tomorrow."
It's about eight years too late for that approach you arrogant fool. The permanent damage is here and now. Our banks are stuffed. Woolworth (and 30,000 jobs) are on the brink of administration. Nobody shops at Woolworths any more. We're all too rich to shop at such a low-aspiration outlet. Wouldn't be seen dead in Woolworths you see. Our house 'went up' by 20K last year. We shop at John Lewis now doncha know.
And even now we have no money we'd rather borrow more and spend it at Lewis's than Woolworth's. Amazing how quickly our aspirations change after borrowing a trillion quid eh?
If Labour isn't damned into obscurity if we're ever allowed another election then I will be amazed.
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Darling's shameful pre-leaked, pre-election, pre-budget report has little to do with economics and everything to do with posturing politics.
This is an irresponsible pre-election budget and a General Election manifesto.
The centrepiece, a widely-leaked silly little VAT sop to woo voters and tax rises later for top earners, will do nothing to help the economy, as the country plunges deeper into debt and recession, leaving a legacy of debt.
Bruce Anderson in today's Independent observes Brown is not after economic recovery he's after votes.
I share that view here.
http://theorangepartyblog.blogspot.com/2008/11/santas-little-helper-leaves-legacy-of.html
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New Labour just dont think through their policies. Of course the civil service and fat cats and leading politicians will have to pay up but the large corporate big hitters will get round this as will privately controlled business owners leaving money to accrue inside companies to be distributed when New Labour get kicked out resulting in less money coming out in the short term and less tax. Also it just shows that Gord is bending over backwards to the union bosses to keep their funding. Will the left vote Gord back in - of course not but the middle classes will sure as hell now vote him out.
What an own goal. Keep up Gord.
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#105...
Let's get the facts straight.
Rauf was never convicted of terrorism or for his alleged involvement in his uncle's killing.
He was wanted but not convicted of terrorism. Neither was the evidence sufficient to convict him on terrorist charges in Pakistan.
His extradition request was for the murder of his uncle.
So does the Labour Party back state-sponsored killing without trial?
Seeing as it enacted the flawed Human Rights Act. What exactly does it say in the first page of a British passport?
When exactly does right become wrong?
Also, someone else said "If you are not on our side...."
Mmm, indeed.
Convenient too that you choose which bits of your war you seek to justify.
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The lead article in The Times today urges Darling to acknowledge past failures.
To make these observations is not to pursue scapegoats. Acknowledging past failures, as policymakers did after the Great Depression of the 1930s, is essential to guarding against the risk that they will be repeated. Whatever measures the Chancellor announces should not hide the reality that the crisis is the conclusion of a catalogue of errors.
Whilst The Times are correct, there is not a single chance Brown will stray from the "it was those nasty American's" line.
Brown's ego is vast. He will not tolerate remaining in the history books as an "unelected PM". That is why Brown will not fess up to anything. He will throw billions at schemes to make political gain. He is interested in himself and not the UK.
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In other words, the bra is off but the knickers haven't hit the floor yet. Okay, I know that one.
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CEH wrote...
"I noticed the CBI 10 point plan earlier and wanted to comment on it. It sounds like a vigorous recovery plan on one level but is just another big business call for corporate welfare on another."
Charles,when will you stop writing such utter guff?
The CBI represents ALL business,large and small.Indeed their DG today told Brown,live on TV, that it is SME's that drive the economy.
So please stop coming out with drivel like that quoted above,when it is so patently inaccurate.
More and more it appears that you and the truth are distant strangers.
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Whatever we get this afternoon, as with all NuLiebour annnouncements, we can expect them to go long on politics and short on economics.
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113 "This is an irresponsible pre-election budget and a General Election manifesto.
The centrepiece, a widely-leaked silly little VAT sop to woo voters and tax rises later for top earners, will do nothing to help the economy, as the country plunges deeper into debt and recession, leaving a legacy of debt.
Bruce Anderson in today's Independent observes Brown is not after economic recovery he's after votes. "
---
Agree, one thing I don't get is why bother? Darling has said tax will rise in a few years to pay it off, and everybody knows exactly why it's being done - in the age of 24hr news we're all well aware - Are labour really that stupid?
Or are the voters really that stupid?
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Labour = More Taxes, anyone who was in any doubt of this at the last election must surely now have it crystal clear in their mind.
This government has failed. Its policy of spend high in the good times, and forget about the bad is paying dividends. And the people who ultimately will be left to pay their "tab" will be the British Taxpayers.
This is the last stand of an expensive Government. And the quicker they are a distant memory the better.
Incidentally chucking 5p at the highest earning, and most socially mobile section of the community will certainly have one consequence... more brits living abroad.
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Nick you and the BBC are a disgrace!
Labour are reverting back to the 70s and bankrupting the country again and you just continue to be there mouth-piece! The latest Mori poll puts the Tories up by 11% to you care to mention this or do you at the BBC only shout about positive Labour polls?
A solution to the countries ills would be a flat-tax of 20% starting at 10k. No tax exemptions. This would bring millions out of poverty and reward hard work and raise more tax income. This came from Economics professer Patrick Minford. He is right.
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120 -
...... Or are the voters really that stupid?
Yes.
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re: 110 wombateye
We, as a company are also ready to flip the switch on our systems.
Our clients/customers with legacy systems that we didn't create however aren't so lucky and are hoping that this doesn't happen, and they're not prepared to change anything (time is money, and lots of it when it comes to I.T.) unless/until they really need to. At the moment everyone we know is waiting until they see the details so they don't waste money on things they might not need.
Changing it at the end of a tax year might be easy (they can just archive/split historic stuff off), but changing it mid-year is a nightmare.
Those who had properly designed systems will be fine. Those on legacy systems which weren't designed properly (which is most of them) are dreading this.
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113 Theorangeparty
You are correct and the article you quote is spot on.
The leaked plans are transparently everything to do with acquiring votes.
The VAT stunt is laughable. You can see Brown sat there thinking, "right I've got no money left, but I need something that will sound like a big, big tax cut when I'm sat on the sofa at GMTV - I know VAT".
This ain't no stimulus.
A few months ago my parents were spitting feathers about Brown. They have been taken in by the spin and now think he is doing a good job. I'm disappointed that the media have allowed Brown to perform a confidence trick on people like my parents who will no doubt vote Labour once again.
As someone says earlier on this blog. It is a big day for the BBC. There are a few homes truths which need to be addressed.
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Tell that to the Federation of Small Business. Next, you'll be saying the Institute of Directors is best pals with street cleaners.
Big business has its issues and hasn't been doing much for competition, employment, and suppliers. Sure, it's not the Tory mouthpiece it used to be but they still have issues and an image problem.
I think, it was fair comment to question their view. There's policy and tax freebie issues they have that might not square up to the challenge. I was just calling them on it.
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55 freecornwall
we already know friends of those in power fall upward and get higher paid jobs for messing up, sadly it is endemic of the system even county councilors creating a unified council will get a good pay day.
a free cornwall would need a fair and honest government but sadly there are too many english in cornwall for that.
our westminster government has prooved themselves inept and corrupt but the voting sheep of this country will only bleat and moan untill they get a few more euroes in there pockets, action is needed now not at some future election.
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Nick,
my wife listened to Andrew Marr on his Radi 4 programme this morning. To put it mildly she was very upset.
Why?
Because they started talking about the late President Mitterands last meal of a French delicacy. A little bird that had been blinded, stuffed and sauted. Now my wife gets very upset when she hears of such cruelty and they really should have announced that some people may well be distressed by the content of the programme.
The same with 5 Live this morning. They are talking about lap dancing clubs, they are talking about infidelity, they are talking about alcohol and drink fuelled drinking. Young people boozing.
I think that the BBC have lost the plot with their daytime programmes. The sort of thing I have refrred to earlier should not be broadcast at this time of the morning. As for Mitterands last meal, I am completely lost for words.
I know that I refer to adult themes on your blog because this is the right adult place for these discussions and comments, I am not in favour of censorship, as is well known, but there is a time and a place. I regard your comments as the place to talk about adult issues. Your moderators have allowed me to comment on masturbation and prostitution as well as so many other issues.
The BBC have lost the plot, I look forward to other comments from your loyal readership, if I am wrong to air this during the Budget day then so be it, but this is the problem, a good day to bury bad news.
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Borrowing billions to cut taxes is the only way to prevent a long lasting recession, Gordon Brown has said.
Nick, Can you ask Gordon, this long lasting recession that Gordon is worried about, Can it be categorized as a BUST?
Mr Brown iwas taking questions from CBI members. He joked that the "man with the power" is the chancellor and he says he cannot announce details of the pre-Budget report yet.
Then he goes on to say "there will be announcements later on VAT paid by businesses on empty properties" and "We're expecting a new 45p tax rate for earnings over £150,000"
So clearly he thinks he is the "man with the power"
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Nick:
Just 2 questions to ask Brown:
1: Do you know the cost and complexity for businesses to alter computer programmes and amend stationery to cater for a reduced VAT charge?
2: How will that cost and trouble help bussinesses reduce cost and workload?
And a third question when he waffles:
3: Why did you not cost this up properly when you decided on this weeks idea?
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Clearly, as Brown has accepted that peoples take home pay can be reduced, the solution is not to mess around with income tax - the solution is to cut public sector pay.
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So it's back to the 70s tax and spending days of oldlabour old madness.
Can you believe this is all they can come up with after thirty five years?
Lord Mantelpiece and Alistair Cashpint will have a considerable job spinning their way through this one.
1970s levels of government debt. And what will the interest bill on this be, one wonders.
#
And who will be next? Raising 1.2bn from the super rich just isn;t enough. So there will be another tax rise, and then another.
Welcome to newlabour, oldlabour the party that learnt nothing form 18 years in the wilderness and is about to go back there at an election coming soon.
Call an election.
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Nick,
bet that the chancellor brings in rules and regulations to bring in minimum pricing on alcohol sold in the supermarkets, and Off Licences. Also happy hours. Rules and regulations, don't you love socialists. it's for your own good.
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This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
#109, Charles_E_Hardwidge wrote:
You wrote "Dunno. The projections I seen is things could get better after a couple of years. More fundamental stuff that needed doing anyway will take a bit longer but it's nothing too onerous." well you've confirmed you are in with Gordie and your words fundamental stuff must frighten everyone that still left in the UK. Lets hope Scottish independence is one of them so that we can be rid of the McClown and his ilk.
You said "I view this crisis like some kid that's fractured a bone and can't see through the pain so they think they're maimed for life, but who grows up to become a superstar athlete." When it's almost every bone that's smashed I don't think a superstar ensues, lets hope for a very early retirement for Gordie with a pension that matches his abilities, none..
You also said "Problem is, some folks can't stop worrying it so are running the risk that the leg will have to be hacked off. That's a shade of dumb too far for me." Um, sounds more like gangrene to me as to what Gordie has inflicted on the long suffering UK population and it's not too dumb to realise something gangrenous must be removed as it's poisoned and we all know who has spread the poison over the last eleven years.
Quite simply, if the cap fits wear it, and used in the situation of Gordon McClown he has been an unmitigated disaster the like of which I've not seen since that other superstar athlete of the old left Harold Wilson. Thankfully over here on mainland EU the Socialists are more centrist social democrats, the communists are old Labour theology and the Liberals and rest don't quite know where they are, so if you think going back to the tired failed old hard left policies of Wilson, Callaghan or even Scargill ever could work, you've got to be joking, it would simply be the return of serfdom.
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GB says 'We must act now' - so he proposes tax increases in 2 years time - genius!?!
Meanwhile millions will lose their jobs and the nations banks are being crippled by their desparation to pay off the Treasury investments at 12% interest, rather than lending to businesses.
As usual Labour leaves an almighty mess for the Tories to sort out.
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re: 130 niloc5959
The really funny thing is that even though businesses will often have to spend thousands to cater for the new rate/logic, it'll revert to its original rate again in a year's time and all that time/money would have been wasted.
Well, you've got to laugh, haven't you?
Then again, changing systems to cater for constantly changing vat rates might be a good thing, because in a year's time it might go up by 5% each month until it reaches 500%, so perhaps the time spent on changing systems now will help out in the very near future.
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Something else for people to realize is that the leaked 45p tax story is classic New Labour media manipulation. It has 2 purposes, first it's red meat for the backbenchers to keep them happy and secondly it's a ruse to hog tomorrow's headlines and try and take attention away from other bad news which in classic Brown style will be buried among all the numbers. Look very carefully at what is said and published today.
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I'm interested, eventually, to know what measures will be in involved in the PBS, but one that has been widely touted is a 2 1/2 % reduction in VAT, and how this will release over 12 billion pounds into the economy. Nice big mouth watering headlines.
VAT is paid by business and individuals, so who do you think pays the most VAT? Yep, business. So who will get the "benefit" of this change? Yep, business again.
I'm not against benefitting business per se, since it provides jobs and we all need one or more of those these days.
However all the political points are about us, the voters, getting help in these difficult times and, once you take out of the equation all the purchases you make that aren't taxed, or you won't be making again in the near future, the tangible benefit per person is relatively small. So, what's in it for us?
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The Web is an incredible resource and can act to inform and empower the people in ways that simply were not possible in the past.
Napoleon Bonaparte said that 'information is power' so in that spirit, I offer readers of this blog something that I hope will bring some clarity the the current situation:
http://www.chrismartenson.com/crashcourse
It has certainly helped me to map out a tentative way forward.
For instance, I now hold a significant amount of cash funds and have moved other funds into bank(s) that operate a Full Reserve System.
I hope you too survive what is coming ... as they say .. see you on the other side.
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Lets face it, all governments stink but this one stinks more than most.
The VAT changes will make no difference whatsoever to purchasing. A 2.5% reduction to 15% will mean something currently costing £10 will cost £9.79, a saving of 21p. Well big deal!!!
Where trhey can help is by reducing the VAT on fuel/energy from 5% to 2.5% or even better to 0%, thus allowing people to keep warm.
As for myself, my mortgage has reduced by about £100, my electricity is cheaper from changing supplier, I have stopped all regular investments, and am working in a highly fuel efficient way by reducing use of oil central heating and using a wood-burner instead.
So will I go out and spend mor - NO.
I shall pay £200 per month more on my mortgage and pay it off more quickly since the interest I will get on the extra disposable income is far less than the interest on the mortgage (I have used all of my cash ISA allowance).
So no it won't make a difference.
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#134, MaxSceptic,
I like your comments and especially the last one as I know a lot of people here in Belgium who would love to have a picture of the Belgian Finance Minister to aim at when in front of the urinal as he's as hated here as Brown is in the UK.
PS it was always good fun to take the p**s out of committed far left supporters as they are so easy to rile and the lobotomy they suffer after birth removed the last vestiges of humanity, LOL and I'm just remembering good old red Ken and his merry band who I once knew so well.
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In addtion to my previous post, food is zero VAT rated (at present), and the two most important areas to poor and elderly folk is already pretty much VAT free.
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#59 Mr U
"£3 billion a year will not plug £15 billion of extra borrowing"
How about running that policy for 5 years? We don't need to pay the debt back over just 1 year do we?
Sound sensible (not the policy - I know you disapprove as a massive slump and high unemployment is preferable in your view - more the maths)?
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Blair & Brown came into power on the crest of a wave.
Invested a good stable economy, and then started the introduction of their socialist policies.
Because of their determination on rewarding people who did not and do not want to contribute to our society they began to eat away at government reserves.
They also wanted to share our hard earned wealth with every man and his dog who wanted to relocate here from around the world.
They also dragged us into
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Great blog # 5,
You appear to understand the dynamics of this economic situation. New and uncharted terrain requires fresh models, creative thinking and dynamism in dealing with this present crisis. So far, labour appears to be the only one who grasped the magnitude of this economic and financial crisis.
Additionally, I have listened to Vince Cable and he too understands this new environment. It’s only a pity he is with a party that does not enable him to leverage his strong background.
Do we have any proper Economist on this blog site!!!?
I have been to a presentation on the Financial crisis at the University of Leeds and the three Economist present strongly supports Labour’s view for a fiscal policy.
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145 balhamu
nope; that won't work; 3billion won't even cover a significant proportion of the interest of their current deficit.
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Never said that or even given a hint I support failed policies of the left, right, or wherever. I just think Labour are best placed to government for now and don't think the Tories should get in by default. So, I'd appreciate it you didn't put words in my mouth.
I note your later comment about baiting the far left. Anyone who thinks I'm far left is delusional. I've given them a hard time just as much as I've, say, praised some Tories for sound policies. The problem is some folks like yourself take such a hardline and partisan position you make enemies before any consensus can develop.
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Samual Brittan seems to know his onions. I'm not sure if his brother (Leon Brittan, part of Thatcher's government 1981-86) agrees with him though
Why the Brown Critics are Wrong
The Big Myth of Taxpayer Cost
Keynes Thou Shouldst Be Living
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Top end tax payers should be paying more - no question. Why wait? The Chancellor needs to introduce the measure now. Why give the carrion classes (lawyers and accountants) time to dream up new avoidance schemes?
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I suspect others have said it but a few pence off in VAT on most of the things I buy isn't going to make me jump for joy. I have cut back because my mortgage has jumped, fuel bills have rocketed and so on. Brown and Darling are not really in control. No politician can be.
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#145 Balhamu
Far too simplistic, even by your standards.
Everything that has been spoken about with regard to the PBS is a short term stimulus, for about 2 years (cynically till the next election) followed by an indeterminate length of time to pay for it all.
Hugh Jeers in relation to the currenct economic problem is similar to Bush and the wars in Iraq and Afghanistan. The problems can't be addressed and resolved until the cuase of the problem, and the biggest barrier to its resolution, is removed.
Roll on that election.
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#143 buzet
Left-wingers receive a lobotomy after birth removing the last vestiges of humanity eh?
And you cry foul when Labour say that people who went to Eton are toffs?
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#148
But do we need additional money to cover interest payments on the current deficit?
Or is it already budgeted for?
Let's assume 5% interest charged on UK debt - 15 billion pounds would attract 750,000 pounds of additional interest. This would leave 2.25 billion to pay off the 15 billion in year 1. We'll call it 7 years at most of 45p tax on 150,000 then shall we?
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Nick,
some people have read my comments on the way we are going to have to borrow money from Saudi Arabia and China and even the Daily Politics made reference to my 'he who pays the piper calls the tune', without credit I will have you know. I don't know.
In the meantime you also printed my ctiticism of the treatment of birds in France, the blinding birds prior to stuffing.
May I add another issue with regard to the treatment of animals under welfare rules. And it goes to one of my core problems, why does this shameful government not ban Halal and Kosher meat. I regard the slaughter of animals under that process to be totally unacceptable. They have banned the hunting of foxes with hounds, well I demand that they also ban, with immediate effect Halal and Kosher methods of slaughter.
Or is this shameful government not going to ban these practices because they may lose votes with certain groups, or that some religious groups may be upset. well I am sorry but the government s failing in so many ways, yet they ban the hunting of foxes with hounds. Who was responsible for excluding Halal and Kosher methods of killing from animal welfare legislation.
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Charles @126 said..
"Tell that to the Federation of Small Business. Next, you'll be saying the Institute of Directors is best pals with street cleaners."
I suggest you take a look at the open letter from the FSB to Alistair Darling last week which takes EXACTLY the same stance that the CBI took this morning regarding SME's.
And ,your silly suggestion about the IoD, simply confirms that you,like your political idol,love to put words in others mouths with no justification or substantiation.
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This comment was removed because the moderators found it broke the House Rules.
Thanks for that.
balhamu's the expert on economics around here and very readable. I enjoy reading his stuff because it's sane and picks up on a lot of stuff that may be forgotten or missed.
It's great hearing about the presentation you've been to. This is a difficult situation but it gives folks who know their thing an opportunity to strut their stuff. I always enjoy hearing about that, and it sounds like you enjoyed it.
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The major point of what's gone wrong seems to be drifting straight past, and uncommented upon.
The major source of income to the government comes from corporate taxes. Not just on their corporate earnings, but in VAT and NI (payroll tax). This has been part and parcel of all the money that has been committed to public expendtiure, the holy cow of labour policy.
Recession threatens that flow. Deep depression strangles it. That's where we are. The banks are bust. Retail activity is moribund. We can't manufacture and EXPORT sufficient to pay all the bills.
Government revenue is down, and will be down for the forseeable future.
That's what they can't and won't face up to. In the long term public spending has to be cut, since we don't have the wherewithal to fund it. That's it, no ifs, no buts. We cannot afford what we are spending since there is no way we can predict when we will be earning.
Tinkering around won't stop the problem. We are well and truly screwed. If business does not pick up the majority of us won't have a job. Where's the money going to come from then? Do you want to have to pay 90 percent of what you earn to fund today's problems?
Quicker and far less painful to take a pill or open a vein now.
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It seems Mandy is in charge. It is just a ploy to make the BBC spend most of its time reporting an economically utterly irrelevant possible future tax rise(the amount is pennies). It will upset just a few (non Labs) and appeal to the left. The bad news can be slipped through behind the smokescreen of a tax rise as well as creating a jingoistic rallying call for their Lab. supporters. It also makes it more difficult for the LibDems to disagree, since it is in line with their silly tax ideas. And the BBC fell for it, hook, line and sinker! Mandy Rules!!
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#150.
Three opinion pieces from one man don't form a majority backing Brown.
You simply don't get it.
1. The government are in for 50%+ GDP borrowing. On 2008 projections, that's a national debt of over 700bn. Historically, that's back to the 1970s, the last time a Chancellor tried to borrow 8% GDP, he had to go to the IMF - Denis Healey in 1976.
And that ended well, didn't it?
2. That interest needs to be a) financed b) paid. So to finance it, government must raise gilts, to pay it, they must find taxes.
3. Raising gilts requires interest rates to be attractive. Paying for it, requires businesses and the individual to be taxed. Taxed more than they would be if the government hadn't borrowed so much.
4. Higher marginal interest rates adversely affect a) business investment b) mortgage and insurance repayments c) price of goods in the shops and e) employment.
5. Higher marginal taxes adversely affect a) demand b) growth c) competitiveness d) employment
Now, say this isn't so?
The one thing of any certainty, as Cameron said is this government has increased the already eye-wateringly level of borrowing by even more.
Oh yeah, no more boom or bust.
How about "no such thing as a free lunch" ?
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Busted Brown is like a drunk who is trying to cure his severe hungover with an other large drink!!!we all know the only cure is abstinence and a large glass of cold water.
For 10 years Brown has been telling anybody who cared to listen that UK had the best economy of the western world ( of course under his magnificent steward-ship)
But surprise surprise we are now also top of the league for public debt.
On top of record revenues Brown also increased personal and business taxes so where has the money all gone?? Nulabour spin doctors will tell you record numbers of doctors nurses teachers blablabla... but we still have one of the worst cancer care in Europe . 30 % of the kids leaving school are more or less illiterate and are unemployable in a competitive modern world. Mind you they are the lucky ones as they will end up on benefits for life and will not be affected by any future recession. What an achievement for a great politician!!!
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#145 Balhamu
I think you failed to note all of the posts that indicate that the tax gain from the 45% rate will not be enough to cover the interest on all of the new borrowing never mind repay the cpaital borrowed. Perhaps you need to read the whole blog to get some sense of the discussion to date. while you are at it, can you confirm whether you think that the 45% tax rate will be the only tax increase required in 2 years?
I heard as so called expert telling the Beeb last night that there are lots of wealthy business men out there who would be only too happy to pay more tax. If true, they can send a cheque to HMRC any time - I am sure they would treat it as a donation towards the huge bills we are faced with. Can I suggest that the GB supporters on this and other blogs do likewise, then perhaps we might see some progress in bringing down the debt and also making life fairer for everyone else.
Cheers
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So Nu-Labour are adding another tax band. So what ? They broke their manifesto commitment not to raise income tax when they added 1% onto national Insurance.
Journalists may of been fooled, Nick Robinson may of wowed at deft fancy footwork - but the common man still paid more.
So any whispers where the rest of the money is coming from to fund Gordo's shopping ?
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@155 Bal
So you have already gone from 5 years to 7
do you not think that 7 years is plenty of time to identify the loop holes to avoid the tax, lets face it there's mor eholes in our tax system than accountants to exploit them.
What do you propose to do when the tax receipts drop in year 3 from 3Bn to zero?
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152. fragmeister wrote:
I suspect others have said it but a few pence off in VAT on most of the things I buy isn't going to make me jump for joy. I have cut back because my mortgage has jumped, fuel bills have rocketed and so on. Brown and Darling are not really in control. No politician can be.
---
That aspect isn't a huge problem - yeah 2.5% off 100 quid is only £2.50 (+£15 vat of course), and the savings on 4 pints of beer are 26p or something, but that will all add up (worryingly some people seem to welcome this a bit too much) - but I wouldn't mind a 1% cut on income tax for example
The problem is that this is unfunded - a short term measure to stimulate spending, which only increases debt - this would be a correct policy IF it was affordable - the country however has no means to pay it back, except later tax rises, so we are going to pay 12billion for effectively nothing - and with consumer debt levels already high and unemployment rising people aren't going to spend lavishly
This is effectively taking out a credit card to pay off a loan, and putting that credit card on a 50-1 horse
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Helping middle and low income families, or single people, who have overspent for years and careless bankers who have loaned them a lot money. Our government has bailed the banks out and now wants to protect those personnaly affected. Who is paying for all of this? People who have worked, climbed the ladder up and were looking for a brighter future. People who never exposed themselves to the greediness of those banks and who had a more condired approach to loans and mortgages.. Most of use over £150,000, have now to bail out those who were a bit careless over the last decade. This is obviously not right. Lower tax for all, less civil servants, more freedom in a thoughtful and considered manner (e.g. not letting the economy or the loans run away) are better means to succeed. Tax cuts to develop a low carbon society would put Britain in the front seat in the world and re-energise the construction business. Helping the genuine disavantaged people, those on reduced mobility, with genuine disability by offering tax incentives to the rich to help those who are disavantaged would be better than punishing the rich and rewarding those low, middle income families and poor bankers who surfed the wave of greed. Often rich people want to contribute to society beyond creating jobs and services that we all enjoy but often want to do so by giving money to charities or societies that really make a difference to those who need it the most. It is time for Labour to go or time to embrace the 1970ies all over again.
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I suspect most people, right across the political spectrum, are probably content that some form of "stimulus" is worth a try, provided that it doesn't all go to people on tax credits (who've had enough over the years in my view).
I'm not sure that a VAT reduction of a couple of pounds on something worth £100 is likely to make a huge difference on spending habits. And that's assuming it's fully passed on by the retailer!
I also think it is entirely reasonable for people to question how this money is going to be paid back in due course, as inevitably it must be. I do think the Government have been somewhat let off the hook on this point by the media.
Whilst some increase in taxation looks inevitable in the medium term, I also think it will be time for the Government to tighten its belt along with the rest of us. I'm afraid that includes a reduction in spending on Brown's pet projects!
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155 balhamu
ah, I wasn't talking about the interest purely on the temporary vat cut, I was talking about the general level of interest on overall public debt; 3 billion won't even make a dent in it, 3billion is equivalent to something like 1 or 2% of the overall interest due on the accumulated debt from what I can work out, although I might be wrong. 100 billion in one year, not counting pfi/pensions/bailouts, plus accumulated debt over the years; the total amount owed and the resulting interest must be humungous.
I don't think they've budgeted for interest to be honest; I think they just don't care anymore about the level of debt.
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#162 flanflinger
Yes - the only thing that determines economic performance is the level of debt.
1. That's why in 1991, when the Conservatives had debt down to a record low of 27% GDP that economy performed so much better isn't it?
2. True - but better than a new wave of long-term unemployment and associated problems from a needlessly deep recession - Labour are still dealing with the consequences
3. I'd rather pay tax than be out of a job - also see point 2
4+5. Correct - but it depends where the tax increases are doesn't it. Or are you suggesting that an increase in tax on people earning above 150,000 by 13% (40p to 45p) is going to destroy the economy?
Isn't there a difference between a self-inflicted recession (1991-93) or one that is made needlessly deep as a matter of policy (early 1980s), and one that is caused by unprescedented global factors (and the UK missed out on the fun of the 2001 world recession thanks to the useless policies Labour followed - Conservatives were gutted I'm sure). And it's difficult to call an 11 year period of sustained growth around the trend growth rate of 2.5% a 'boom' isn't it?
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Nick - is the shameless leaking of a pre-budget report so usual that it no longer is worthy even of a comment ?
Says a lot.
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The CBI and FSB may share a common view and their suggestions may have some use, but that doesn't mean they're entirely right or achievable. I have some doubts and the Chancellor will have his view. How things shape up is a matter for negotation and there may be outstanding issues that need to be developed as time rolls forward.
I just think that the general business approach and attitude needs reshaping and tax handouts aren't necessarily a good thing. Temporary relief is one thing but if this is an image and advantage play it's a good time to check that before anyone gets carried away: it doesn't solve anything and just stacks up more problems.
Britain has some of the lowest R&D budgets and lower tier wages in the developed world, lack of industrial vision, and issues with recruitment and staff retention. Tax cuts and low interest rates can be helpful in some ways but in others can be seen as corporate welfare which just masks these and other issues. The CBI need to get over that.
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What a pair of no-hopers the Prime Minister and his Chancellor are. There is no bold thinking here, no common sense and no demonstration of caring or in touch politics.
Gordon Brown who is fundamentally responsible for leading us into this mess and leaving us unprepared for a global recession which every analyst could see coming nearly 18 months out (albeit not to this extent), is asking us to believe he is the man to lead us out. It's the equivalent of setting fire to a building full of people, which you have built but failed to fit out with escapes or extinguishers, and arguing that you are the right person to lead everyone to safety!
The reduction in VAT is incredibly costly and relatively meaningless. This is hardly going to encourage people to spend more or help small businesses. Heavy smokers might see some validity in it, but that's about it!
Another supposed notable 'cut' is the delay in environmental based taxes on drivers. This is not a tax reduction, merely a pause in further penalties to those individuals oand families that choose to buy and drive certain cars, and the bulk of auto makers (that is unless you produce Smart cars).
Furthermore this is a clear u-turn on emissions targets.
A stamp duty holiday is pointless if you can't get a mortgage in the first place. Don't be fooled.
Taxing people who earn over £150k 45% (46% including employess NIC) is classic old Labour - anti aspirational and cracking down on wealth/job creators and those that excel.
This is playing politics with people's lives. It's a bribe for the next election. Future tax rises in 2010-11 for everyone, not just the richest are inevitable. It sounds good but if you inspect carefully enough you'll see it means nothing. It's a backward, out of date, socialist step which says that people should slog their guts out and have what little they've built for themselves ripped from their hands at death.
When the Tories took the prudent approach of suggesting they didn't believe in further borrowing and unfunded tax cuts, I thought they had created a political rod for themselves. I thought that like John McCain against Barack Obama, they had allowed Labour to steal their clothes. What an opportunity missed for Brown and Darling and hwat a let off from Cameron and Osborne.
We are on the verge of deflation, mass unemployment and 2-3 years of abject misery. Am I the only one out there seeking new ideas, inspired thinking and some bloody conviction from somebody?
I think not and hope not. But if I am we deserve the mess we are about to inhabit!
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Look you redistibutive nutters...
If you tax top earners at a higer rate, then they will award themselves pay rises to cover it (they are usually the bosses), and that will mean that people on lower wages won't get a raise (or may take a cut).
Taxing top earners is squeezing a balloon at one end.
Tax them an 99% if you like, it won't cut their take home pay...
It just makes it more complicated, less attractive overall to new business, all for a few loony left cheers.
Cut public sector pay
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#149, Charles_E_Hardwidge,
Re "The problem is some folks like yourself take such a hardline and partisan position you make enemies before any consensus can develop."
You sadly misjudge people like me, I don't take a hard line either in life or politics until the situation becomes so clear there is no escaping it. In the 18 years I've lived and worked across the EU I've seen the consensus politics of Germany first hand and have seen it's strengths and weaknesses. It's main failing is that certain pressure groups are more vocal and aggressive that others. In the case of the politics of the UK it is invariable the left who fit that category whether hard or soft left. Funny enough it's not so pronounced on the continent as there is little real difference between the various parties in the most.
In the case of the UK there has been eleven years of vocal and sometimes aggressive leftist activists abd pressure groups directing much of the course of Nu-Labour, and both Blair and Brown have bought their silence. Now the piggy bank is empty and the chickens are coming home to roost so that's why I take the line I do here Charles. There is no time for consensus since none of the so called experts know what is going to happen in the UK or even the world. For every economist who says A there will be one who says B. All that is important are facts and the primary fact is that due to Brown wasting the inheritance of John Major the UK is in the worst state of all the EU countries and there is serious risk that the pound could crash, and this is totally due to Brown putting the UK in such a perilous state by his fiscal policies.
Most EU economies that are also in or near recession will hopefully recover over the next few years as most are better placed and dare I say it are in the Euro (arrrgh), but those that struggle will mainly do so since their national debt is too high. BTW, I don't think joining the Euro was a good idea anywhere but one thing it would have done for the UK is limit the excesses of the government as interest rates would have been set by the ECB. Old Gordie would maybe have been slightly less able to destroy the UK economy with the ECB looking over his shoulder.
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Why all the surprise? I was brought up to believe that Labour would always find a way to borrow too much and I do not see this as an exception. It might not have been so bad had that awful man Brown not already borrowed much too much apparently just for the fun of it.
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No scrapping of expensive databases though. What a shame! A perfect opportunity to scrap ID cards
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The question is: will this trigger me to do any extra shopping?
My answer is NO- the reason is that even though I am not a 150K+ earner, I know there is going to be a tax increase for me as well. We all know the 45% on 150K will not cover the cost (and the number of 150K+ earners are falling due to the recession). We all have to pay higher tax quite soon. So for me it is smart to save as much as possible.
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#166 pot_kettle
I haven't got time to do the sums - I'm sure the Chancellor will provide detail on these points in the Pre-Budget Report later, and this will be pored over in some depth by the IFS and other neutral experts (and the CCHQ and more partial observers too).
The point was that an additional 15 billion would generate ~750,000 pounds of additional interest per year. Not far in excess of 3 billion as earlier posters were suggesting.
And besides, surely all of this costs far less than having a needlessly deep recession, higher unemployment and potential long-term implications of that in terms of people finding it difficult to get into work again and staying unemployed for a long time.
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Yay Nick
BBC political editor Nick Robinson tells BBC One's lunchtime news that it will not just be the very rich in the firing line - anyone in work is likely to be facing higher taxes at some point in the future, he says.
Although you should change Anyone to everyone and change "likely to" to "will"
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#170 getrid
It is clear that they have - read e.g. the previous budget.
It's interesting to note that this 'irresponsible' government pays less interest on the national debt than the previous one did.
Care to explain how that works, if the debt has been increased massively and is less sustainable as you assert?
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Let's assume 5% interest charged on UK debt - 15 billion pounds would attract 750,000 pounds of additional interest. This would leave 2.25 billion to pay off the 15 billion in year 1. We'll call it 7 years at most of 45p tax on 150,000 then shall we?
I think you'll find that will be 750,000,000 pounds in interest at 5%. So, only one thousand times out. That explains much about how this government screwed up its sums so badly.
So, seven years you reckon to pay off the 15bn of additional fiscal stimulus. Okay, that's 15bn quid accounted for. Now, how about the other 90 or 100bn quid in 'fiscal stimulus' we'll be spending this year? And the 140bn of 'fiscal stimulus' we'll be needing next year.
How are we going to pay off the 300bn of 'fiscal stimulus' Gordon Brown has run up since 2001.
I reckon we're looking at having to pay back (say) 600bn quid in 'fiscal stimulus' by 2010. On top of the 300bn of debt we started with in 1997.
I mean, if to pay off 15bn takes an additional 5% tax on those earning over 150K for seven years then this government's total 'fiscal stimulus' of 600bn should take twenty times that to pay back. So, an additional 100% tax on all those earning over 150K should see us all square in just seven years. I'm not sure how we'll force the rich to pay 140% tax though so I'm guessing the tax will have to come from somewhere else.
At 5% even the interest on 600bn is 30bn quid a year. And you're patting yourself on the back about how to pay off a single 15bn quid. Which doesn't even cover the interest on the original 600bn. You're pleased that you've proposed a new tax to cover a mere 50% of the interest on the interest.
So, even after increasing tax on the rich by 12.5% all the government is doing is proposing a scheme to half cover the interest on the interest. Which still begs the question where are they going to raise the cash to cover the full interest. A figure that with the 300bn quid of debt they started with is rapidly approaching the interest on 800bn by 2010. Or 40bn a year. Almost 3% of GDP. Indeed, with the contraction in GDP already under way I'd say that 40bn will be more than 3% of GDP come 2010.
Come on. Admit it. This government has really screwed up. And rather than admit it they have decided to just plough on regardless.
Run!!!!!!!!
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I am pretty offended UK-silent majority! – but not upset.
I am an immigrant who gave my wife (who is British) the opportunity to relocate to the Caribbean, but she preferred here. I have contributed equally as other UK citizens to the government’s coffers because I am a believer that one should not be a free rider in any economy. And to this end, I believe your comment is short-sighted.
What the government should seek to do is ensure that the system is fair across the board. I have worked with individuals on the government’s Welfare to work programme and some of the reasons as to why individuals choose not to work are appalling. Nevertheless, it is an engrained system of socialism that a number of governments have created and enlarged upon in this country. Being so liberal and always politically correct has artificially created a welfare state.
I will like to see Britain returning to an era of manufacturing power and wearing the label of “Made in Great Britain” on quality products. And at a time of this financial adversity the government should look to develop this sector on a strategic advantage paradigm. No one seem to see the importance of using Michael Porter’s, competitive advantage model in helping the UK to return to such global position given our present state.
# 5
The points you raised on corporate governance is essential if we hope to have confidence in our financial system again. And given that 1 in 3 persons in the UK employment depends on this sector it should not be taken lightly.
My present research surrounds this area of Governance. It baffles me as to how we failed given the emphasis placed on improving governance in the UK, from the radical reforms proposed by the Cadbury report (1992), to many subsequent reports. How could individuals (NED) who never understood the financial environment be on the board of Northern Rock? Why, because they are scientist and his father served on the board? Ridiculous!!!!
Reform should take place and ensure individuals who understand and can make meaningful contributions are elected to serve as NED’s. This environment is one in which synergistic capabilities are discovered and built upon. Our corporations need MEN on these boards not puppets, who can be easily pulled, but who will stand up to CEOs and challenge their direction. Or is it a case where CEOs are so powerful and/or the board so complacent. Or have they (NEDs) lost their old British way for order and legitimacy in favour of board room sophistication and the decorations on the walls? Should we had all this in place before, there would not have been any need for such new economic measures.
The UK corporations needs to get rid of the Fred Goodwins, Jeffery Skillings and Juergen Schrempps from our UK companies. Bring back prudence and sustainability.
(Caveat: This is not a cry for the Conservatives)
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Dear Nick.
When all is done and the Fat Lady sings,this entire onslaught has been about Capitalismn, IT FAILED , it fell apart at the seems, and now Socialismn is repairing the void This a monumential indictment of Western philosophy, and of Economies that function on Debt.
This debt is now so large it will bankrupt Capitalismn, and The United States Power House will diminish over the next decade, as China, India, and Russia, take the lead as Super states .
America and Britain will be pressed hard in the World Political stakes, and in the main, the relevance of this will be attributed to America causing this Capitalistic failure in the First place.
America and the Dollar are now no longer the Major influence that controls the world, they have lost their Super Power status, for the want of materialistic gain and Greed.
Citibank, Lehman, and all the others that failed prove this point, and it is now emphatically endorsed by the failure of the Motor industry in the US, , This is a repeat of History, and this is the cause of the crisis "--------
NO ONE LEARNT THE LESSON, THAT HISTORY RECORDED, BECAUSE, PEOPLE OF THIS GENERATION DO NOT KNOW THEIR HISTORY, AND IT IS REPEATING ITSELF IN SUCH AWAY THATBTHERE IS MORE TO COME".
i WOULD SAY THE WEST HAS BEEN BOUGHT TO THE BRINK, AND THERE IS NOW NO ANSWER TO THE FAILURE OF A DEBT LEAD ECONOMY.
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@180
I admire your blind faith in the treasury that got us into this mess being able to do their sums correctly.
Just a small word of warning, your confidence is in a group of officials who havent got their sums right for 11 years.
just to be clear the predicted numbers by Labour have been wrong on every occasion for every thing for the last 11 years, I will concede at times they have underestimated tax reciepts but in those years all it actually meant was that they paid some of the debt off and upped their prediction for the year after and borrowed against that over inflated estimate.
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As I'm on my lunch and not a full time blogger (and there are a lot who fit that description) thought I'd add an opinion (nb this will be opinion not fact for the many right wingers who confuse the two).
The 45p change is positive (would have preferred 50p) as it is that long lost idea of "progressive taxation". Will be interesting to hear Cameron's response to argue against the principal of the wealthiest paying a little bit more.
The fact that UK plc will have higher debt than say the baseline year of 2006 or 07 (take your pick) is absolutely unavoidable. Every industrialised country in the world will be in the same situation because of the Global recession. Even those few smaller countries (eg Sweden, Cameron's favoured comparitor) going into the recession with a surplus are likely to go into deficit.
If you accept that premise you do have now clear choices in the UK as to the better response.
1) The Tory "light touch" (by Comparison)
2) The Government (and Lib Dem approach) of a heavier fiscal intervention.
People will have their own opinions, we're all entiled to them.
The opinions on here (I'm sure we all agree on this) are dominated by the anti government/pro Tory line, far in excess of opinion in the real world which at most would be say 6/4 against Government/Labour standpoint.
Any idea why this blog is so disproportionately skewed towards the Tories?
Just Curious that's all.
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mikepko wrote:
In addtion to my previous post, food is zero VAT rated (at present), and the two most important areas to poor and elderly folk is already pretty much VAT free.
Most food is, but some food includes VAT (tends to be the sweet food)
So expect a VAT reduction - which is closely followed by a 5% "fat tax" :)
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Buzet23, it's difficult to develop an understanding when someone just comes out of nowhere and dumps on you but I took time to read your position.
Generally, the UK has poor infrastructure and the "wasted" money is what brought things back up to scratch.
I agree, there's an issue with political ding-dong. That's something people need to get over because it just gets in the way.
My personal view is that the economic and social sweetspot needs developing and that's something everyone has to grasp.
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@182
They pay less on the debt because they have set interest rates at an unsustainably low level,
Come on Bal basic economics!
The government set interest rates at 4% so they only pay 4% instead of the old 7% for instance.
The sorry knock on effect of that was that savers suffered ond so there is less in the savings pot now.
It really is basic stuff, I thought you were better than this
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Sorry, what's all this talk of delaying things until after the next election so that they can claim they haven't broken their pledge not to increase taxes?
When did that ever worry them before? Correct me if I'm wrong, but wasn't scrapping the 10p tax band a pretty clear increase in taxes? And the national insurance increase was also an income tax increase, no matter how much New Labour try to spin it as not breaking their pledge. And don't get me started on tuition fees...
If there's one thing the history of the last 11 years has shown us, it's that if New Labour want to break a manifesto pledge, they'll just go right ahead and do it.
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Am I the only person that thinks it's no coincidence that Darling has decided to set our VAT rate to exactly the rate that the EU has been asking us to ever since they first touted centralised tax rates?
This is not a move to save our economy, it's a move to follow Brussels' demands without telling anyone that's what they're doing.
The increase in higher rate tax is equally pointless as most people earning that kind of money are in the situation where they can either channel it off-shore or take it in teh form of dividends, the tax rate for which will remain the same.
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balhamu wrote:
#59 Mr U
"?3 billion a year will not plug ?15 billion of extra borrowing"
How about running that policy for 5 years? We don't need to pay the debt back over just 1 year do we?
Sound sensible (not the policy - I know you disapprove as a massive slump and high unemployment is preferable in your view - more the maths)?
That is assuming that the New Labour Super Sale will be for 1 year only - if the recession goes on for longer (which is possible) then there will be a lot more then 15 billion extra borrowing to pay off.
Personally I don't see why they didn't just steal the Lib Dem tax suggestions rather then implement this half-way approach.
The Lib Dem actually had a much better idea - a small cut in VAT will do little but a noticable tax cut at the lower rates would be very noticable.
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In my opinion, the government is about to make an enormous error.
Firstly, their message is flawed: "we'll cut tax now but tax you more later". Why should we consumers take heart in that? The Japanese government got into the same bother back in the 90's by dropping taxes and interest rates only to find that noone paid any attention - everyone was sitting on cash and waiting for the tax increases that were just around the corner to pay for it all.
So the government thinks that a cut in the standard rate of VAT give us all a poke in the direction of the shops? I doubt it. Here's why:
Retailers will face a major headache if they decide to re-price. They might choose not to do so as a result, and then simply sit on the added margin. Clearly one retailer couldn't do this in isolation and benefit - the whole high street would have to follow suit, but I think that the notion isn't all that far fetched. Even where prices are dropped, I have a sneaking suspicion that they won't reflect a full 2.5% drop.
On the other side, even where they do drop the price, other bloggers have rightully pointed out that if I'm not prepared to spend £200 on a suit in M&S today, I'm unlikely to spend £196 on the same suit tomorrow with the new VAT rate in place.
The majority of food items, childrens clothing and public transport are already VAT free so those pretty major outlays are going to remain unaffected.
Mortgages aren't subject to VAT of course so no worries there either.
The cost of fuel should drop but, of course, that depends entirely on the big producers passing on the savings (hmm, isn't a barrell of oil $50 now - 1/3 that of it's price in the summer - but I'm not paying 2/3rds less to fill my tank - simplistic I know but you get the point) - I'm not holding my breath.
What would I do if I was in charge then? I dunno, force the banks to lend at reasonable rates. Force the banks to get back into the mortgage market. Force banks to remove the complete and utter imbeciles who invested our futures in crazy commercial lending practices. That would be where I would start - I mean, we kind of own them now don't we.
Next I would turn my guns on the utilities sector and carry out a full investigation into whethere or not they really are passing on reductions in wholesale prices or whether they are just profiteering instead. In fact, I would just assume the latter and start revoking the licences of those that didn't really put their backs into passing on cost reductions.
Finally, I'd be looking to turn down the rate of NIC or income tax to ensure that consumers saw a real cash benefit coming through today.
Just my tuppence.
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And besides, surely all of this costs far less than having a needlessly deep recession, higher unemployment and potential long-term implications of that in terms of people finding it difficult to get into work again and staying unemployed for a long time.
Aaaahhhh! But does it?
Or might not the 'short, sharp, shock' actually be more beneficial in the medium and long term?
Let's take history as our guide.
Was the UK's medium and long term interests best served by getting progressively further and further in debt to pay British Leyland, British Steel, British Coal, British Airways, British Telecoms etc etc all their inflated salaries, screwed out of weak governments when they could actually be bothered to show up and do any work?
Or would we have been better off just acknowledging that we couldn't continue to tax everybody to death and borrow stupendous amounts of cash to support all those unnecessary jobs. And act accordingly.
That's where we are again. All those nice cushy bank jobs and retail jobs and estate agents jobs and government clip-board monitor 'jobs' are unsustainable. They only existed because we collectively borrowed a trillion quid that didn't previously exist and then promptly blew the lot on 'stuff' made in China.
Those jobs are as good as gone. We might as well accept that instead of subsidising these people, through monstrous amounts of deficit spending, to sit there in their empty banks and their customer-free stores and their plush NHS office blocks leading wasted lives.
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Another expertly deployed smoke screen by Gordon Brown.
We are left debating whether top income earners should be taxed more - a debate the labour party will win any day of the week - when the real issue is where does the other 14bn come from for the immediate debt and beyond that how do we pay down the extra 100bn?
Here's a hint: we won't just be talking about high income earners paying more after the election.
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@187 Eaton
A point of order, The Lib Dems dont agree with the government.
The Lib Dems ONLY advocate fully funded fiscal stimulus. and they say they wouldn't want to start from such a high level of government debt in the first place
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175 The "real" Truth
Says CUT PUBLIC SECTOR PAY
Nurses?
Police?
Soldiers?
Care Home Staff?
Fire Fighters?
Teachers?
Hospital Cleaners?
Social Workers?
Surgeons?
Ambulance Paramedics?
No doubt you'll respond with the usual "non job" arguement.
Whoever it is rightly has empoyment rights which if "disposed of" in true Tory style leads to the heavy upfront severence costs and the massive revenue costs associated with unemployment.
The Tory "final solution" strikes again.
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#175 real_truth
The Government have been trying to do that (see all the below inflation settlements - i.e. real pay cuts - being imposed).
And watch Conservative politicians criticise the Government for cutting the pay of teachers and police.
I reckon the answer will have to be:
* Shut down all Whitehall departments
* Privatise any task (e.g. police, education, health) that needs doing,
* Pass emergency legislation to confiscate the gold-plated pension rights of civil servants
* Abolish all benefits - bring back family responsibility
* Sell off any assets that the state has (e.g. council housing, Whitehall real estate)
Why isn't Cameron suggesting this? Massive savings!
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#171.
Yeah, unbelievable....
Well, they managed the recession better than Brown could ever already.
Now thanks to Brown, his legacy will be a spent-up, clapped out economy with 50%+ GDP borrowing. Guaranteed to underperform for 20 years.
Thanks....
Sorry? So opening the doors to uncontrolled immigration is somehow a better way to sorting out unemployment?
Is it so difficult to give them tax breaks, train them up, help them out and getting them into work? Oh, they probably wouldn't vote Labour any more.
All it did was keep wages to rock bottom, disincentivise work, take vacancies out of the system and keep people on the dole.
And voting Labour.
Wow, that's really trying to sort out unemployment.
Wouldn't we all? However, Brown has lumped more on corporation tax and made firms pay more towards NI (a tax on jobs) Hardly creating the environment for employment is it? Seems firms are re-locating to Ireland now. Thanks Gordon.
High interest rates and higher tax destroy wealth. Fact.
The only thing it doesn't destroy is talent.
People earning £150,000 a year have one thing - talent (unless you are a Director for a Local Authority), they have skills in high demand, skills that are very mobile. The last time a Labour Government tried it, it was called the Brain Drain.
Wonder why?
Like the 2.5% VAT cut, it's a partisan trick to claw back some votes. In terms of repaying what Brown has spent, it's peanuts.
Erm, every Labour recession is 'events beyond its control' isn't it? Tory ones are always self inflicted?
Let's see. 1979. Country bankrupt, record borrowing, clapped out crypto-communist nationalised industries with Marxist shop stewards. Sick man of Europe.
Welcome to Callaghan and Healey's Broken Britain.
So the events of 1987 had nothing to do with slow decline to 1991? and the high inflation that caused. Sounds so familiar, doesn't it.
Also the ERM which Labour also wanted to enter caused the low inflation, low debt scenario that Labour have profited from ever since.
Actually, it was 15 years of growth, convienient how Brown and his acolytes fail to acknowledge he inherited a growing, vibrant economy with low debt, high growth and a budget surplus?
And now he's messed it up.
Our low inflation was imported from China.
Our debit imported from all over the world.
Our skills exported.
1,000,000 manufacturing jobs lost since 1997.
A doubling in government spending.
20% decline in public sector productivity.
Stagnant growth in stocks and shares over the whole 11 years.
Stagnant growth in the private sector since 1997.
Sold our gold at record lows.
Turned the best provided private pension scheme in the world into the worst.
Added 750,000 public servants to government.
And now... about to beat the all time record for government borrowing taking us back 30 years. Literally.
Wow, thanks Labour and thank you Gordon.
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Let's assume 5% interest charged on UK debt - 15 billion pounds would attract 750,000 pounds of additional interest. This would leave 2.25 billion to pay off the 15 billion in year 1. We'll call it 7 years at most of 45p tax on 150,000 then shall we?
I think you'll find that will be 750,000,000 pounds in interest at 5%. So, only one thousand times out. That explains much about how this government screwed up its sums so badly.
His sums are correct, just he wrote down the interest is wrong.
3billion minus 750,000,000 is 2.25 billion
As 750,000,000 is 3/4 of a billion.
Still a lot of money... but the maths is correct.
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187 - I agree - there is nothing wrong with "progressive taxation" and I would support 45% say over £150k and 50% over £500k.
The fact though that is fundamental in respect of taxing high earners is this - They simply either dont pay it at all,or they hide their money sometimes legally,sometime illegally,and all too often get away with it.
My non-scientific assesment is that if every UK citizen paid the tax they should pay,and did'nt hide from their reponsibilities on this issue - then the "tax take" to the treasury would be around an extra £20 billion per annum.
At the other end of the scale - while some good work has been done re benefit scroungers - increased vigilence on this area could raise another £10billion pa....
Thats £30 billion extra PSBR funding NOT JUST THIS YEAR - Not boorowed BUT available EVERY YEAR!
Re Cameron - of course he will yell and scream against tax cuts for the rich - and he may have some support - but until or unless he (a) stops his Front Bench and Back-Benchers from treating their MP's job as a part time one and thus give up onscence second/third incomes and (b) stops receiving funds and gratuites from the likes of the arch Tax Dodger - Lord Askworth - who sits behind an illegal trading set up in Belieze and uses it to fund Tory marginal seat propoganda - then the majority of electors WONT listen to him!
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Daily Politics today - Vince Cable and John Redwood, two people who know about the financial crisis and understand it, and Ruth Kelly, full to the brim of Gordon Brown's very own soundbites.
She was completely hopeless under some very gentle questioning. When asked explicity for her personal opinion, she offered nothing.
Oddly, they ran out of time for Vince Cable to offer a closing statement even though they spent 5 minutes talking to 'the people' in Leeds. Perhaps he had something to say that Labour didn't want him to.
On the economy, people are talking about the extra interest that will need paying as a result of the VAT cut, but they forget that we haven't been servicing our debt for the last 5 years. Gordon Brown believed his own line that we have low debt. I hate to break it to him, but £600bn+ is not low debt, whatever GDP we have.
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For anyone interested, this is a list of the main points of the 2005 manifesto:
-No increase in basic or top rate income tax
-Minimum wage to rise to £5.35 from October 2006
-Increase home ownership by two million
-Inflation target of 2%
-No-one will have to wait more than 18 weeks to see a specialist from date of referral
-Rebuild or refurbish every secondary school
-Education or training for every 16 to 18-year-old
-Publicly-owned Royal Mail fully restored to "good health"
-Action to tackle guns and knives
-Further Lords reform
-Point system for immigrants
-Tony Blair will step down after serving a full third term
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198. Eatonrifle
Nurses?
Police?
Soldiers?
Care Home Staff?
Fire Fighters?
Teachers?
Hospital Cleaners?
Social Workers?
Surgeons?
Ambulance Paramedics?
As such a supporter of these people, I take you will be campaigning to exempt all these people from any tax rises at all?
If not then listing them is just the usual bogus lefty wailing.
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#198
Whoever it is rightly has empoyment rights which if "disposed of" in true Tory style leads to the heavy upfront severence costs and the massive revenue costs associated with unemployment.
But that's just not true is it? The severance costs and unemployment costs are a small fraction of the cost of actually paying somebody a wage.
Let's suppose we have an NHS clip-board functionnaire in some office somewhere. Let's suppose we pay them 25K a year. After we've heated their office, sent them on a few Hand E courses, diversity workshops and supplied them with new biros and taken into account their pension then they are effectively costing you 50K a year for quite literally no economic gain. Quite the opposite. If they ever do venture forth from their office it is only to impede somebody who is actually trying to do a job. Hence productivity in the NHS has actually declined as payroll has increased.
By contrast if we fire them we end up paying (maybe) 10K or 15K a year in supplementary benefit, dental care, housing benefit.
We are all 35K a year better off.
If we repeat that a million times (for starters) then we save 35bn a year. Almost enough to cover the interest on our national debt.
Plus we empower all these people to actually find something useful to do with their lives.
Let's do it.
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Mr Robinson let us make it quite clear the Labour government has not raised income tax, but has reduced the Basic rate of income tax to 20%, the lowest in living memory. If at the next General Election the Labour party state it will raise the tax level to 45% for those earning £150,000 plus, then each and every one of us can decide how to vote. So untill that day the BBC has a duty to give the simple facts about income tax, ie, the government as not raise income tax but reduced it.
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@194
In case you hadnt noticed, despite what they say, The government have no "Guns" to turn on anyone.
You say force the banks to do this and that. You must realise that they cant force anything.
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you can tell when labour are in trouble they wheel out attack dogs like Derick draper and other non elected people mandelson campbell and more when in trouble attack and hope you wont notice Watt they are up to they lied there way to election wins but we have worked them out if brown tels you its dark at night go out and check jim oldham
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#183 Mr U
Of course I meant 750 million (note that this tallies with net 2.25 billion return - 3 billion minus 750 million -from the new tax on 150,000 earners I used). Well spotted!
The Government has already budgeted for paying back the debt that already exists. And already does. And pays 30% or so less on national debt interest than the previous Government did!
#190 Pot_kettle
Right.........you're straw-clutching.
#195 Mr U
Well - I guess it'll deliver a Conservative Government. So has to be good.
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I learned my lesson in the early 1990's when house prices last fell. I've worked hard to repay my mortgage and minimise my debts. I've raised a family and have never asked for anything or been given anything by any government. Lack of government prudence and corporate greed enabled the financial crisis to happen so why am I as a higher income earner going to get stuck with the tax bill? Surely those responsible should pay. Why not increase corporation tax on bailed out companies?
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Eatonrifle wrote:
As I'm on my lunch and not a full time blogger (and there are a lot who fit that description) thought I'd add an opinion (nb this will be opinion not fact for the many right wingers who confuse the two).
The 45p change is positive (would have preferred 50p) as it is that long lost idea of "progressive taxation". Will be interesting to hear Cameron's response to argue against the principal of the wealthiest paying a little bit more.
I would have prefered 50% too, or maybe 45% on £100,000 and then 50% on £200,000 if New Labour don't want to risk losing too many of their friends in high places. However, Labour aren't actually giving it to the lower paid, 2.5% off VAT isn't going to make much of a dent in bills.
If you are going to borrow heavily to stimpulate the economy then throw the money at the people who are most likely to spend it.
The fact that UK plc will have higher debt than say the baseline year of 2006 or 07 (take your pick) is absolutely unavoidable. Every industrialised country in the world will be in the same situation because of the Global recession. Even those few smaller countries (eg Sweden, Cameron's favoured comparitor) going into the recession with a surplus are likely to go into deficit.
Granted - any shrinkage in GDP would lead to an increase in debt as a percentage of GDP even without extra borrowing.
If you accept that premise you do have now clear choices in the UK as to the better response.
1) The Tory "light touch" (by Comparison)
2) The Government (and Lib Dem approach) of a heavier fiscal intervention.
People will have their own opinions, we're all entiled to them.
I don't think that the government can be lumped in with the Lib Dem approach here. The Lib Dem idea was a massive cut in the base rate of incomce tax paid for by an increase in the higher rate of tax - a much better idea as it means that people have more money in their pocket.
If I go to the supermarket and buy myself some chocolate hobnobs the VAT on them will have dropped by 2.5% but I doubt Tesco will pass the price on to me - they have profits to think of and shareholders to answer to.
Any idea why this blog is so disproportionately skewed towards the Tories?
It could be because as the Tories are in opposition their supporters are naturally more vocal. Or that natural Tory voters are more politically active (Tory areas often have access to better education which encourages political discussion from a younger age)
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#198
Full respect and all that, but, if private sector workers are taking pay cuts (car firms shutting down for fifty days, JCB workers taking pay cuts to prevent large scale redundancies), is it too much to ask that public sector workers do likewise?
Given that the public sector have had pay deals assuming long term inflation of c2%pa spread over, say, three years, and inflation next year is forecast to be zero, or possibly negative, is it unreasonable to ask, yes even nurses, teachers, police and firefighters, to take their share of the pain?
I don't have the figures, but I suspect a 2.5% cut in public sector pay costs would have a significantly greater impact than cutting VAT from 17.5% to 15%. Problem is, of course, we can't have the natural Labour constituency paying for Labour's mess, can we?
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Nick,
nice one on the Daily politics. Trust you not to say that you have some sort of Peston exclusive, we can take it then that National Insurance will go up with immediate effect then can we. Or from April, my sixtieth birthday is on the 7th. Remember my earlier links to the fact that I was conceived almost on the day that the NHS came into existence. Well what a great birthday present, what with my bus pass.
By the way I love that little smile of yours when you tease us. You are quite attractive when you do that, careful you may be acquiring a new fan base. I think you are quite a cheeky chappie really.
I wonder if he will also announce some help to councils over the bus pass, because even though I won't be using one, I walk a lot, they are very expensive, a four stop journey into the City centre, Exeter, is one pound sixty pence last time I looked. It is not possible to buy a return ticket because I might not actually catch the bus and therefore it would be fraudulent, taking money for a non-supplied service.
Talking of councils, we down here in Exeter are perplexed by government reorganisation at a local level, our MP wants Exeter to be a uniatry authority and every sane person can see it cannot be afforded. So, I wonder if they will instruct the Boundaries commission to stop looking into government reorganisation on the basis of the economic crisis.
I wonder if you will be effected by the increase in taxes for those on earnings over GBP150,000, should you not be declaring an interest, as should all the other BBC commentators. Or would that be some sort of bias, interesting, very interesting thought that.
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Nick,
Balhamu has responded to several posts, but not my post (164). Is there a reason for this? Could it be that he is unable (or unwilling) to acknowledge that the ordinary voter is going to be stung by tax increases in the not-too-distant future?
#185 - FreeCornwall with every purchase
Capitalism hasn't failed. It is what has allowed you to spout forth on blogs such as this. On second thoughts, perhaps it has failed after all.
BTW, Nick, have you found the source of ther leak?
All the best
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The Problem is Mr Brown thinks by cutting taxes we will all suddenly become confident to start spending. Unfortunatly I fear he has seriously misjudged the public attitude.
Firstly with the current economic climate my job is not safe by dropping VAT I am not going to suddenly run to the high street and start spending.
Also by cutting taxes borrowing increases and I as many others on this blog want to know how we will ever pay it back?
Maybe our government should actually start looking at ways to save public money. For example maybe we should admitt as a nation we can't afford the 2012 olympics! We can't maintain our contributions to Iraq and Afganistan as well as all the other peace keeping missions.
It could also be time to reevluate our position in Europe it is cold and lonley being seen as the outsiders of europe. Maybe it is time to relook at the single currency? joint economic trading etc...
The govenrment could also consider raising taxes on luxurys i.e Alchol, cigerattes, Flight Duty etc so there is money or tax breaks to help indivduals with food, water and heating bills.
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203 iansimcox
I also saw that, Kelly was an absolute disgrace and typifies why the public are so fed up of labour (and I thought she was too busy mothering these days?) although Redwood equally showed that the tories have no solution but to point out flaws - it's very sad that only these two parties are allowed to win
tho i struggle to think the daily politics are in anyway pro-labour simply because Cable got cut short at the end, andrew neil is no fan of "the great leader" and the show seemed pretty cynical of this tax cut, they ran over because kelly and redwood wouldn't shut up
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siranthonyj wrote:
Mr Robinson let us make it quite clear the Labour government has not raised income tax, but has reduced the Basic rate of income tax to 20%, the lowest in living memory. If at the next General Election the Labour party state it will raise the tax level to 45% for those earning ?150,000 plus, then each and every one of us can decide how to vote. So untill that day the BBC has a duty to give the simple facts about income tax, ie, the government as not raise income tax but reduced it.
Wasn't the basic rate of tax 10% as little as a few months ago?
Or was there some magical wording in there that the 10% tax rate wasn't the "Basic rate"
I am not sure about other people but I would consider the Basic rate of tax to be the lowest step (basic coming from the word "base" which is commonly assumed to be the starting point)
True Labour did introduce it, but they also removed it.
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212. Mark_W_Elliott wrote:
politically active (Tory areas often have access to better education which encourages political discussion from a younger age)
I think you mean, noone with half an education would be taken in by brown and his labour cronies. Which is precisely why they done their best over the past decade to try to ensure that noone gets even half an education (but still gets the certificates to pretend that they have).
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Its only a matter of time before the IMF come knocking and say to the Darling/Brown partnership that they cant borrow the ammount that they want.
This is the 70's revisted.
Life on Mars anybody?
I'm looking forward to driving my Mk3 Cortina
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@218 there was magical wording, there always is with Gordon Brown texture like sun
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218 Mark W Elliott
Yeah, Basic Rate (which is a big BR on your payslip if you're unlucky enough to not have a tax code) is 20%, formerly 22%
the 10% tax rate was called the 'starter rate'
so yes basically
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#200
read the FT today flanflinger - your public sector workers are understated.
Gordon Brown and his mates at the treasury have been dreaming up ever more clever ways to employ people without them being officially government employed; despite the state pating their wages.
What a surprise.
So actually 900,000 public sector diversity officer non jobs created under newliebore.
Private sector has hardly grown at all and productivity gains in private sector have been de minumus under newlabour.
This is fantasy economy; public sector jobs; all time high levels of government and personal debt; and savage attacks on anyone who questions the newlabour track record.
Russia has jsut forbidden the media from describing their coming recession as anything other than a 'slowdown' and has forbidden journalists to report too much bad news. Is this where weare headed? Certainly it is if Hazel Blears mind control monkeys have anything to do with it.
Look at Chuck Hogwash; one delusional post after another all asking us to have confidence in the dearleader and look to the bigger picture; he's straight out of Pravda.
Look at balhamu; vehement denials of the state of public and private sector indebtedness and demands for links to information; presumably so newlabour can go and shut down the sources.
Look at Nick's blog since Lord Mantelpiece and Alistair Cashpoint returned to power; it's been nothing but pro government.
Even the hunmble Oyster card has been used as a technique to track Londoners on their travels around the capital and if it's not then why is a database being kept with the information?
This government has been lying and spinning for eleven years. Nothing theysay is believable, nothing their apologists say is believable.
Call an election.
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#145
Your maths would work Balhamu, apart from interest on the debt...
Any idea what the yearly interest is on a £15 billion debt??
And your suggestion that it is either a £15 billion debt over "massive slump and high unemployment" is also far too simplistic. Nobody knows if that latter won't happen regardless of this last throw of the fiscal dice by Darling. And as for minimising the slump, nobody knows how deep the slump would be without the "tax cuts".
Its a question of faith in some respects... either you believe that the UK government can borrow itself out of the enormous hole it has dug for itself (and lets all be very very clear about this... the current administration created this problem, the global situation merely ignited the blue touch paper)... or it will simply just make that hole yet deeper...
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#164 and #215
smfc - you're quite right - the Government will probably propose other tax rises as they would want to repay the extra borrowing over a shorter time period (to help meet their golden rules).
Not ignoring you - just commenting in my lunch hour.
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This government have never been trustworthy on tax. They had a pledge: not to raise the rate of income tax. That was broken when they raised the starting rate from 10% to 20%, but otherwise they stuck to it - by raising every other conceivable tax and inventing a few more.
They then proceeded to squander the income on wasteful and pointless spending. In the process, they've created a monster of "public services" which has to be fed (Little Shop of Horrors, anyone?) and a permanent underclass of benefit claimants, trapped in a dismal spiral of worklessness and fecklessness. I was unemployed for a while in the early 80s. I - and others - found it not only soul-destroying, but viewed it as something terrible and shameful, to be escaped as soon as possible. Nowadays it seems more like a career choice.
Everyone demands rights, but far fewer, certainly no-one in this government, is willing to take responsibility. They'd rather maintain dependency of groups who might therefore be willing to vote for them, and the rest of us can take a running jump.
They'll drain us dry for their flood of waste, bleed us white to transfuse their own gold-plated salaries and pensions, punish us for having an income at all, let alone for saving any of it. The banks are on the point of being nationalised; who will own our savings then? Is that how Gordon plans to pay off his wanton debt mountain?
Maybe property next - remember, property is theft. Let the destruction of the bourgeoisie commence!
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Nick,
I am just getting so excited as the clock ticks towards the crisis budget speech. I wonder if we will be told anything that has not been trailed, what little gems have they sworn you to silence over so that you can be given the next exclusive. Your mate Andrew got it spot on, what role does parliament fulfill nowadays. Should MPs not be the first to know the truth.
As for the insane questions to conservatives, but what would you do? Nah yah boo sucks. Of course they are not going to say what they would do, Darling would immediately put it into his speech. As for trying to get the Tories to say will you vote for or against the measures, they don't even know what the measures are so how could they say what they would do based on hypothetical, that is guess work, as to what will be in 'the speech'.
Nearly there, a little bit closer to the most important speech to the commons since, oh I don't know when!
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141 JohnConstable
Thanks for posting that link - I've had skim read. Gives me some ideas on how to approach planning our household finances. Much appreciated.
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182 balhamu
"They pay less on the debt because they have set interest rates at an unsustainably low level,"
Our interest rates are irrelevant when it comes to public debt; the interest rate charged/accrued relates to other countries, surely you can't borrow money from yourself? I thought all this money was coming from places like china, and they can charge whatever they like.
Anyway, what we're currently "paying" is also irrelevant, because we may not be physically paying back anything (the opposite) in interest, but the interest is still accruing.
Has anyone come up with a definitive figure of what the total public debt is (not government figures, real ones that aren't made up and which actually include what we owe) and the interest which accrued/is-accruing on it, and expressed compared that as a proportion to gdp, and then compared that to 1997's levels taking into account inflation? Nobody has ever mentioned/found that from what I've seen. If I can see those figures then I'd be very interested, but I've got no interest at all in the fake government figures.
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The claim to "fairness" rings hollow from a prime minister who has systematically destroyed the value of private sector pensions while leaving his own gold plated pension pot and that of his bloated state untouched and untouchable. Someone has to create the wealth that he has frittered away over the past decade.
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Does anyone remember the last time the budget was balanced? (ie where we didn't spend more than we got)
From my memory (although I might be wrong) the last time that happened was a year after labour got in when they were still sticking to tory spending plans etc, and that throughout the boom it was always negative.
Has anyone got a simplified history/summary by year of the PSBR as a pct of gdp? I've looked on google but can't find one.
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I have read every paper and heard every newschannel.........
why are they presenting Gordie as some kind of superhero.....?
His plan to borrow to turn around the economic mess is as Cameron rightly says a disaster in waiting. The media presents the City as being predominantly in favour, but that's pretty easy if you hand-pick those you interview. I think this misrepresentation a disgrace....it just for political ends.
It is the public that matters.....NOT the political leanings of TV media.
Certainly, of recent weeks, I am increasingly amused......the media frantically tries to portray the whole world as being in favour of Brown's policies....................
Unfortunately, they don't seem to realise that majority of Joe Public doesn't quite see it the same way.
In fact, so Left leaning has the TV news media become recently, I think it's about time the Conservative set up their own TV channel..........
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This comment was removed because the moderators found it broke the House Rules.
#224 mouse
The primary problem:
Banks are over-exposed to US sub-prime mortgage debt, which is virtually worthless (especially given the enhanced get-out clause that gives big incentives for US homeowners in negative equity to cut their losses).
Complex financial instruments based on said sub-prime debt have been created, and are sitting on most bank's balance sheets.
Banks were reluctant to lend to one another given this - which froze the inter-bank credit market, with massive knock-on implications
The primary problem:
Oil and food price shocks in 2007-08 have reduced effective real incomes, leaving less available for consumer spending.
The secondary problem:
UK houses have been over-valued by ~30%. Some people (particularly first-time buyers of the past 3 years, but also those who borrowed against the paper fortunes the house price bubble gave them) are in negative equity because of this. Fewer people are in deeper trouble as they got a mortgage they could not afford. A small proportion of people have over-stretched themselves with credit for consumer goods.
The interplay of the two:
Lack of mortgage finance has driven first-time buyers out, as has the sudden realisation that 'the bigger fool' theory of house price bubbles is not exactly sound. Some people have to re-adjust their budgets to suit, which, along with the massive oil and food price shocks, have depressed consumer spending.
The drop in house prices and freeze of the mortgage market have caused a big recession in the estate agency and building and other related trades, with knock-on impacts on the rest of the economy.
Depressed consumer spending has had a knock-on impact on businesses, and caused loss of jobs and squeezed margins. Increases in unemployment have squeezed consumer spending more, and led to a downward spiral of less spending, more unemployment, less spending.
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jonathan_cook @ 228
Glad you're finding it useful.
It was recommended to me by somebody I respect enormously who is a semi-detached member of the 'magic circle', you know those people in the shadows who really are the worlds' movers and shakers.
I have ploughed through the whole twenty or so presentations (which takes about three hours) and as a result have a much clearer idea of the problems we face.
Consequently, I will not be participating much in these blogs from now on, as I have to concentrate fully on family and my businesses for the next few years or so.
I hope you bloggers on here all survive too, and are not sucked into the vortex of the Great Depression 2008/2012.
I am optimistic for you bloggers because at the very least, your participation on here shows that you have some awareness of what is coming.
Until we meet again.
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#229 getrid
I heard from a blogger on here that it was 5 million gazillionquillion pounds or something, if you include the discounted value of every single bit of expenditure the Government can expect to make ever again.
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I've just had a call from our youngest son. He had a telephone call from his employer today (his only weekly day off ) telling him that he has been made redundant and will have to leave his job in two weeks. He has a wife, 2 children at school and a 10 month old baby to support.
He was made redundant from his previous job this time last year. He has worked very hard and been loyal to this firm. He was their top salesman from the day he started until last September when he won an award for their top salesman in the country. Counts for nothing these days.
I wonder if Mr Brown can feel his pain?
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Apparently Derek Draper is going to be on the live PBR blog on Guido's blog.........
Should be good for some rapid rebuttals.
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Nick,
now remember we have to be compassionate.
May I suggest that what we are in for is not communism but something termed communitarianism. This can be defined as 'a social and political theory which rejects the individualism considered in liberal political theory, and which puts an emphasis on values and goals of a collective nature - cultural or national values, say - which are held to be inaccessible in a society concerned only to protect and promote individual freedom and self-determination'.
So, to go with we heard that 'a stitch in time saves nine' we may well hear that in this global economy 'we all sink or swim together', in other words when will the politicians get around to giving us a governmnet of national unity. I mean then we won't need to have an election in 2010 after all, for your own good after all.
So, there we have it, well I think so anyway. After all do we all not live in 'our community', as many socialists would have you believe.
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#234
balhamu
a twelve year old schoolboy wouldn't accept this facile attempt to explain the mees the financial sector is in.
How do you explain the Royal Bank of Scotland having a balance sheet of 2 trillion pounds of which your government now owns 60%?
How do you explain they got to 60 times assets to tangible equity?
Who set up the regulatory framework that failed to regulate this leverage?
how do you explain that they were on every commercial property deal in Spain in 2006 and 2007 offering finance at 20 basis points over Euribor when no Spaish bank would contemplate it.
This is nothing to do with America; it has everyhting to do with the fantasy land economic framework of Gordon Brown and newlabour.
Call an election.
They don't even understand why we are in this mess never mind admit responsibility for it.
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re: 232 Real_Estate
"Certainly, of recent weeks, I am increasingly amused......the media frantically tries to portray the whole world as being in favour of Brown's policies....................
Unfortunately, they don't seem to realise that majority of Joe Public doesn't quite see it the same way."
It's not just Joe Public in the uk either; to almost all other countries he's a hate figure because he's seen as being personally responsible for half the global problems, because the uk and usa between them ran their economies so badly that they caused all these global problems.
Sarkozy won't even speak to him; he's hosting a financial summit with blair instead.
But you won't hear about sarkozy's (or anyone else's) snub of brown on the bbc; the bbc hid it away in the depths of their obscure uk-politics history pages and never mentioned in on tv at all.
Listen to french ministers in interviews which are live and not doctored by the bbc; the french absolutely hate gordon brown, and they also hate the bbc for spreading lies about him being the saviour of the world. The french are livid with brown and the bbc, and I don't think they're the only ones.
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It might be worth going to the bookies and betting 20 quid that Nick will be blowing a trumpet on his next blog for the government along these lines:
BBC political editor Nick Robinson tells Daily Politics the VAT cut is designed to have a "confidence effect", even if the impact on people's finances is not necessarily huge.
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#241
But you won't hear about sarkozy's (or anyone else's) snub of brown on the bbc; the bbc hid it away in the depths of their obscure uk-politics history pages and never mentioned in on tv at all.
Listen to french ministers in interviews which are live and not doctored by the bbc; the french absolutely hate gordon brown, and they also hate the bbc for spreading lies about him being the saviour of the world. The french are livid with brown and the bbc, and I don't think they're the only ones.
NICK. Is this true? If it is you are a truly despicable organisation. Your reputation is now worthless.
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#234
The secondary problem:
UK houses have been over-valued by ~30%.
I think you'll find that you have your primary and secondary problems confused there. The UK's primary problem (and the US' primary problem) is that we have allowed a massive housing bubble to develop.
Over-valued by 30%? In your wildest dreams. They were over-valued by 80-100% and unless this government totally annihilates the currency by simply printing up an extra trillion pounds over the next 18 months then they'll come back down by 40 - 50%. Ie they will (almost) halve in price.
We had a housing bubble a lot like it (although nothing like as insane) in the late eighties. It caused quite a nasty recession when it bust. In 1997 it was so fresh in everybodies minds that Gordon Brown promised he'd never let such a thing happen again.
It was inevitable it would bust though - the only speculation being what would be the trigger.
Well now we know. All that money that the banks were lending was only pretendy money conjured out of fresh air. Supplemented with another 300bn or so of government pretendy money conjured out of fresh air as all that feel-good borrowing fed on itself.
Inevitably though the magic money machine got clogged up with bad loans and ground to a halt. And Gordon Brown wants us all to pretend that if it wasn't for the yanks clogging up the magic money machine with bad debt then his economic miracle of ever-increasing house prices out-stripping annual wages and low interest rates would enable us all to just 'release the equity locked up in our houses' forever. Borrowing onwards and upwards to infinity and beyond. What could possibly go wrong? It's all the yanks fault you know.
No Gordon. It was all your fault. You sat back and basked in a decade of unsustainable borrowing. You indulged in it yourself and you are so deluded that you actually believed your own PR.
The smarter of us simply held our nerve for as long as we dared and then sold our house to rent.
And when you cut VAT it won't tempt me to spend an extra cent. I have all the TVs, cars and consumer white goods I could want. And if you cut income tax I'll just stick that in the bank too. I'm not going to be trying to spend my way out of your recession. I'm going to save my way through your recession.
I guess that makes me unBritish.
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re: 237 shellingout
My sympathies are with your son; I was put into the same situation a few years back, and it's a horrible shock.
However, the best thing to do is to try and see the bright side of it (I know it's hard, but there is usually an upside to it in the end). It's often a chance which you otherwise wouldn't have taken to branch out on your own or to go in a different direction which can ultimately improve your quality of life.
For example, I decided to become self-employed, something I wouldn't have considered if I hadn't been made redundant. Lots of people are doing the same thing now; going solo so that they can have control over their lives.
In my experience, being loyal to a firm is a big mistake, it never gets repaid and isn't worth the effort. Better to get whatever you possibly can out of the firm, and keep your options open, and if possible try to go it alone or setup a partnership. Generally with firms loyalty is a one-way street; they expect total loyalty from you, but they don't have any loyalty to you.
Tell your son to get a good lawyer too; chances are his firm may well try and con him out of what he's entitled to, nick his pension, and/or try and get him to pay their own tax liability for the redundancy (all of that happened to me). Never just accept what your employer says when they offer you a redundancy package. In fact, once you receive notification of redundancy you shouldn't even speak to them; get a lawyer instead and speak through the lawyer.
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A lot of people on The News channels have been saying that the 2.5 % cut in VAT will lead to a growth in confidence. In the position that we are in financially and taking into account the small nature of the cut I just can't see it. It will have to be paid back eventually anyway. How does that lead to people having more confidence in The Government and the economy?
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Nick,
Darling has just started - and needless to say he is on about the Global and American Problems - apparently this is an unprecedented global crisis. He fails to understand the problems that he and his master have stacked up on top of those wider issues. It doesn't bode well for a realistic solution.
All the best
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#240 goblin
What's your alternative view?
* Gordon Brown regulated the City too much, taxed too highly and borrowed to much
* This caused a recession as the banks didn't like it and stopped lending to one another
* (something might be happening in the rest of the world, but its completely irrelevant to the domestic economy)
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John@235
Sorry you're leaving but understand why. Thank you for sharing your information. Good luck!
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The UK's growth rate will be between minus 0.75% and minus 1.25%, down from from the 2.5% forecast in March - the biggest ever revision on record.
Bal see what I mean about the government and their sums
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shellingout@237
I'm so sorry to read about your son, he must be devastated. Keep telling him that it's the job, not him, that's redundant. I've been in redundant jobs twice. It's a horrible feeling because you feel personally rejected, but it really is the job that's gone. I wish him good luck in the future.
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Mr Darling says VAT will be cut from 17.5 to 15% until the end of next year, coming into effect next Monday
That guarantee's a bleak weekend for retaillers while everyone postpones purchases until the new rate comes in
Gross incompetance
Call an election
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#245 getridofgordonnow
Thank you very much for your kind words and informative comments which I will pass on to my son.
I was made redundant back in 2004 and it took me nearly a year to find another job. We had to sell the house we'd saved for years to have built so I know how awful it all is. We have both worked hard to get what we have - and we both feel aggreived that everything we've worked for could be stripped away before we've even made retirement, let alone respite care.
This government has got to go!
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balhamu
why not just answer the question...who set up the Tripartite system of deregulation that allowed this mess to happen?
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Alcohol, tobacco and petrol taxes will be raised to offset the VAT cut, Mr Darling says.
There it is then, the motorist cops it again.
Give with one hand take it right back with the other.
Gross incompetance
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The Budget will be brought back into balance by 2015/16, the chancellor says.
How can they get away with putting us in hock for 8 years and admitting it
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#250 pot_kettle
Unfortunately the Government isn't armed with a crystal ball that could have predicted:
* Massive spikes in oil, food and energy prices in 2007-08, putting pressure on real incomes and impacting consumer spending
* The inter-bank lending squeeze driven by mis-calculation by private financial firms of the value of sub-prime US mortgage debt and the risk associated with the various securities created from this debt
* The effective collapse (or near collapse) of many banks due to the weight of toxic sub-prime US products on their balance sheets
These are three massive shocks to the economic system.
The housing boom has exacerbated these problems (seizing up of credit markets has had a massive impact on the property market, and the business models of many mortgage businesses., for example). But not caused them.
How many analysts were predicting it? I think the only people who aren't surprised are right-wingers who have confidently predicted 'recession soon' since 1997!
And why do the IMF, the new US president, academics etc talk about unprescedented circumstances and worst set of economic circumstances since the Great Depression?
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#251 pammy anny
Thanks for your comment - I'll pass it on to my son.
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I haven't watched the Budget on TV this afternoon because I'd probably have had a coronary by now.
Much better that I blog on here for the time being.
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#254 Robin
Right.
That's why the UK is the only country facing recession (oh, what's that you say? All developed countries facing recession?).
That's why the UK economy has shrunk faster than anywhere else (oh, what's that you say? Germany and Japan shrinking faster, US on the same track?)
That's why only UK banks have faced problems (oh, what's that you say? Swiss, French, Dutch and American banks in trouble too).
That's why every analyst pins the blame entirely on 'tripartite regulation' (oh, what's that? They don't?).
The 'tripartite regulation' point is a red herring. The FSA behaved exactly as the Bank of England would have done had they still had banking regulation. No-one believes this. The only reason Cameron makes it an issue is it's the only thing Conservatives can point to that sounds like it could be relevant that they would have done differently.
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0.5pc on NI contributions
So in effect we will be getting a tax rise
As usual the devil is in the detail
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I dont think I have ever heard a budget statement that is as bad for the country EVER.
In effect I beleive Darling has just comdemned the country to the doldrums for 10 years plus.
Planned PBR to be higher than it was under the last Labour government. Its only a matter of time now before the IMF come knocking as I predicted earlier.
There was nothing in Darlings statement that would indicate that this will be a short recession. This is going to be a bigger depression than the thirties and it will probably need a global war to get out of
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@257
How we got here isnt important right now.
How we get out is.
Brown and Darling are not the people to get us out of this. Todays statement proves that. Probably the worst budget plan EVER in the history of the world.
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I really hope George Osbourne finishes his reply with "Call an Election"
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#264 pot
Do you reckon George and Robin are one and the same then?
Would explain a lot - did you spot him using his Blackberry at about 4:02?
:)
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Labour have hit rock bottom.
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#263 pot
I don't see anyone (outside of the uber-right-wingers and the Conservatives on here) suggesting that the way out is:
* Contract fiscal policy (borrowing is too high)
* Contract monetary policy (pound is not valued highly enough)
It might pave the way for Cameron's coronation in 2010, but at the expense of making the recession worse than it needs be with long-term implications for the British economy.
It's clever by Cameron though - he knows that even if Labour follow their diagnosis, they can blame the consequences on Labour anyway.
118 billion pounds of borrowing in 2009/10 sounds like a lot.
Borrowing in the last recession reached a peak of 64 billion (1993 prices). Uprating that for 15 years of inflation makes that 110 billion on 2008 prices - 1.1% higher borrowing in recession by "Mr Irresponsibility". And my guess is that's because of the government maintaining high investment despite the short-term fortunes of the economy, which is the right approach.
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PammyAnny @ 249
Thank you for your comments.
It has been interesting on here, a handful of our bloggers are very knowledgeable indeed.
I very much hope that there will not be a 'Great Depression 2008/2012', if only because I have read about the previous one from 1929 to WWII and it is truly desparate for everybody except the wealthy, who in the cruel way of these things, usually became considerably wealthier by the time it ws over.
But it seems sensible to prepare as much as you can for the very worst and if it does not occur then all that happens is that you are left feeling slightly foolish (and relieved).
Sometimes it is actually smart to be a fool.
Until we virtually meet again.
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balhamu
and that's why the IMF is saying the recession will be worse here, rgiht?
and that's why presonal indebtedness is the worst here in history and thei worst in the world, right?
you can run but you can't hide.
how to get out "the days when you could spend your way out of a recession have gone"
Gordon Brown and James callaghan.
So why is that what we are doing now?
Call an election.
I'm taking money on the IMF taking one look at the PBR and issuing an alert on the UK economy.
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#269 goblin
And all because of this tripartite regulation!
Can you imagine the utopia if Labour took heed of the Conservative advice and the Bank of England was still in charge of regulating banks:
* Continued growth at 2.5% per annum
* No house price boom (and collapse)
* No problems from low inter-bank lending
* UK fully insulated from global problems
* No oil, food and energy price shocks
* Everyone a lot happier
* Less cold outside
* Your teeth whiter
It would solve all ills!
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More sleight of hand!
Far from HELPING businesses, reducing VAT is no help, because it is claimed back..... but increased fuel duty CANNOT be claimed back and will hit business hard.
It will also increase train & bus fares to cover the extra duty.
This together with the promised 1/2% extra employers NI is just going to mean more firms going to the wall!
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Robin and his Aliases
I could have a modicum of respect for youe opinions (not a lot admittedly) if you could just bring yourself to acknowledge that the overwhelming reasons for the current recession are Global and not national.
Thats not to say in every other country there are not "national" factors on the margins as in the UK.
But to keep pedalling the arguement about tripartite regulation looks frankly foolish
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219 The "Sureal" Truth
states.
"I think you mean, no one with half an education would be taken in by brown and his labour cronies. Which is precisely why they done their best over the past decade to try to ensure that noone gets even half an education (but still gets the certificates to pretend that they have)"
Needs no reply, negative stereotyping and biggotry speaks for itself
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God forbid we get a massive terrorist attack or an escalation of hostilities in Afghanistan in the middle of all this economic turmoil. I don't believe we'd be able to cope with the financial backlash of a new emergency! Bin Laden must be laughing himself to sleep right now.
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That was funny. I liked that.
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I didn't find your headline agenda agreeable and you've never been too chumy, but you made some valuable and polite comments. That deserves some acknowledgement and thanks.
The Chinese have a saying: "You can have business, family, or friends but can only choose two". There is some wisdom in this and it looks like you're focusing on what's important.
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the first sensible idea from Nu Labour in years. Taxes will have to go up so why not levy them on those most able to pay, rather than the multiple dshonest money raising schemes resorted to by local authorities in recent years
why only in 2 years time and why not say £100000
2-3 billion wont even pay the extra interest on the borrowing
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#187, Eatonrifle and #212, Mark_W_Elliott,
"Any idea why this blog is so disproportionately skewed towards the Tories?
"
Of course everybody that disagrees with the perfect Socialist dream is a Tory, is it too hard to understand that there are Liberals as well as Tories out there on this blog that also can't stand the cozener that Brown is. Plus we mustn't ever forget the disillusioned native Labour voters like my Liverpool family who don't believe in what Blair and Brown have inflicted and who now are what are known as floating voters having been once solid working class Labour, maybe even they or people like them are on this blog.
The message all are saying here is that Nu-Labour is past it's sell by date and Yesterdays speech was yet further proof of that. Lots of waffle, lots of blame against anybody but them, lots more debt to be paid when they've fled Westminster and it's somebody else's problem, and an inexcusable smugness that they think they have a god given right to do whatever they want. That's why the are so many "Tories" here who are in fact the cross party majority of the population who don't like what Brown has done.
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This is why people doubt the value of the TV licence.
Biased reporting.
The pledge was for the Parliament and whether you agree with it or not its not breaking the manifesto pledge.
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As a Liberal I was in favour of my party's proposal to introduce a 50p upper band on income tax and so have absolutely no objections to the proposed 45p. It seems to me that it has taken a Labour government far too long to redress the unfair taxation that previous Tory governments have saddled us with.
Labour have timidly followed a Tory agenda scared of losing their fat cat donours. Their investment in health and schooling is a vast improvement on what came before, but we have paid for this in the big brother state we now have.
Fairer tax is simply right.
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