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Pre-Budget report reaction

Nick Robinson | 15:48 UK time, Monday, 24 November 2008

The cut in the chancellor's growth forecast for next year - minus 0.75% to minus 1.25% - is the biggest ever made by the Treasury.

However, his growth forecasts for the future are very optimistic predicting a return to growth in the last two quarters of next year and significant growth in 2010. Conveniently, this significantly improves his forecast for borrowing.

UPDATE, 03:52 PM: Wow.

Alistair Darling has admitted that borrowing will increase to a higher level than it did after the recession in the early 1990s and that national debt will increase every year until 2015. And this, remember, is based on his optimistic forecasts. If he's wrong about a swift return to strong growth borrowing and debt will be much worse.

UPDATE, 04:10 PM: Sure enough. The chancellor has announced a series of other tax changes to pay to fill the budget black hole.

National Insurance will go up in 2011 for all but it's those earning over £100k who will suffer the most.

Not only will there be a new 45p tax rate for those earning over £150k, there will also be a smaller personal tax allowance for those earning between £100k and £140k and no personal allowance above that figure. That's a major tax rise for the wealthy and may make quite a few people ask not to have their pay go above £140k.

Combined with the announcement of an increase in the personal allowance for 22 million basic rate tax payers, it's now clear what Mr Darling means by fairness.

UPDATE, 04:49 PM: The Treasury red book spells out the cost of those income tax and NICs rises.

It says that in 2011

* those on incomes over £40k and below £100k will pay on average £156/year more
* those on incomes over £100k and below £140k will pay on average £1044/year more
* those on incomes over £140k and below £200k will pay on average £3168/year more

UPDATE, 05:29 PM: Apologies I got the last two figures wrong, it should be:

* those on incomes over £100k and below £140k will pay on average £1144/year more
* those on incomes over £140k and below £200k will pay on average £3172/year more

Comments

Page 1 of 2

  • Comment number 1.

    Dam it, if only we had thought to save a few quid over the last decade when things were so good.

    Who would have thought it would all come to an end.

    Who indeed.

  • Comment number 2.

    What utter rot.

    So he's taken the most optimistic of the BoE projection for the UK economy to save Labour's skin.

    When has Labour ever got it's borrowing figures right?

    It has over shot them almost every year in power.

    He should have started the PBR speech with..

    "I'm Alastair Darling... I am a borrow-a-holic. I am here to try and put right all the damage me and my other borrow-a-holic have caused."

    Instead, we're getting an exercise in political delusion.

    Get this lot out now. They are a smear on this country's political history.

    In future Oxford English Dictionary under the spelling of 'incompetence' it will read:

    Incompetence - a belief in one's ability way above their level of skill and talent: Economic incompetence - see Labour 1997-2010.

  • Comment number 3.

    so they are still living in delusional land?

  • Comment number 4.

    'No more boom and bust'

    The public need to ignore these short term, small-beer bribes and chuck out the incompetents who put the country in this position (the worst of all major economies in Europe) ... even if it does mean allowing the Tories back in!

    The pretence that this is purely some form of global phenomena cannot account for Britain's relatively poor position in relation to its neighbours. Ireland might be getting a bad press at the minute but all prediction show it recovering long before the UK. Some even have Iceland back on its feet, before the UK is out of negative growth.

    The pound has fallen by 1/4 of its value against the dollar in the last 4 months. Similar figures are found when contrasting it with other major currencies (yen and euro amongst them), time to ask why. Gordon wont like the answer.

  • Comment number 5.

    Darling figures.

    If he thinks only 1.25% as a maximum drop he is:

    DELUDED.

  • Comment number 6.

    One can only WONDER what MIRAGE New


    Labour will base the next BOOM on.


    Debt will spin out of TOTAL control.

  • Comment number 7.

    Nick,

    Aren't middle earners going to get hardest hit from these charges?

    People earning 100k upwards will be able to afford accountants and will probably find loopholes.

    The middle earners will end up paying higher national insurance - that is hardly fair!

  • Comment number 8.

    Dropping the VAT on petrol and increasing the duty will enrage hauliers and private motorists. Stupid!
    Stand by for panic at the pumps as fuel blackades take shape in the run up to Xmas.

  • Comment number 9.

    Once again there is only ONE answer.

    Call an Election GO.

    GO NOW PLEASE EVEN THOUGH ITS TOO

    LATE.

  • Comment number 10.

    Nick...

    An increase in personal allowance...

    Basic tax allowance 6,035 to 6,060... a 0.4% increase! What's inflation? Fiscal drag.

    After inflation, more income tax in real terms

    In short, a tax hiking measure.

    Next, the cut in VAT. Alcohol and tobacco both increased to make up the shortfall. Food is zero-rated, energy VAT remains at 5%. Fuel duty UP by 2.5p.

    So, let's see... VAT cut ... a stunt.

    From 2011... an NI increase of 0.5% and a 45% tax band.

    The VED tax changes are still going to be phased in.

    Forget the deluded cut in growth.

    Some stimulus package, all smoke and mirrors.

    Next, the bits they have stolen...

    HMRC will allow firms to spread their payments... mmmmm... very similar to Cameron's VAT deferral for business.

    Spending after 2011 will only rise by 1.2% not the Labour planned 2.1%

    WOW! That's what Cameron said last week, the Tories will slow government spending. Only they will do it from 2010.

    And a deferral of small business corporation tax... another Tory idea.

    Another Tory idea... a lending panel to oversee loans to business and individuals..

    Not quite as grandiose as the FSA but small acorns....

    Useless, useless government.

    If they like Tory ideas so much, why not call an election and let us decide?

  • Comment number 11.

    Can anyone explain how this will stimulate the economy?
    If you lose your job or are currently unemployed there is no help.
    VAT does not apply to Food, and is only charged at 5% on Gas and Electricity, so no help there either.
    Why not take more direct action, reduce Income tax 2%, reduce employers and employees NI for 12 months. Remove VAT from new vehicles for 12 months, "take momentus decisions in momentous times".

  • Comment number 12.

    Eat, drink, and be merrie, for tomorrow our children pay off Gordon’s debts; but hey who cares, Labour’s current political elite will have retired on £200,000+ taxpayer-funded pensions by then; and anyway the future doesn’t have a vote (hee, hee, hee!).

    Gordon loves to quote his father’s moral homilies, ‘a stitch in time saves nine’ etc. However, responsible parents want to leave their children assets to provide for their future. Gordon wants to simultaneously borrow from the moral values inherited from the past, and mortgage the financial prosperity of the future, all to support the political interests of the political party in absolute power in the present.

    A total bankrupt economic, moral, and philosophical ideology brought to you by a government whose only moral value is its continuation in power. The fact that we face national economic ruin is not an accident, it is the results of the decisions ignorantly made in 11 Downing Street over the last 11 years by Gordon Brown.

    By the way, future historians will see the early £5 billion (annual and continuing) raid on pension funds to pay for Labour’s profligate (annual and continuing) current spending as the emblem of Labour’s actions in the current crisis.

  • Comment number 13.

    Is it just me who missed Darling's promise to remove the increase in fuel duty in 2010 when the VAT is increased?

    Or are we going to end up paying the VAT increase ontop of the 2.5% duty increase?

  • Comment number 14.

    So we don't want to pay the price for the society we built?

    Yeah, it's all government's fault.

    >>

  • Comment number 15.

    And he wouldn't even answer the quesitons - more interested in party political points.

    Our great grand children saddled with massive debt, and he hasn't got the curtesy to answer...

    ps. Nick, any update on mandy and oleg?

  • Comment number 16.

    Gordon the Golem and his streetwalker Darling obviously believe Lincoln was wrong and you can fool all of the people all of the time.

  • Comment number 17.

    #8.

    Quite.

    The only thing I can see to hastening the recovery now.

    Mass public protest.

    Because that was no stimulus package, it was a con.

    How can you cut VAT when the biggest VAT expense item for people is petrol & diesel?

    Rather than save some money, it's being taken from us.

    It's not as if they have raked it in when oil was $150 a barrel?

    It's a disgrace, all the leaks and spin lapped up by journalists (some more than others - you know who you are), big cut in VAT.

    Oh what?

    Not energy, not petrol, not alcohol or tobacco.

    Oh what?

    Spending 100 quid, get 2.50 back.

    I get more nectar points than that!

    Labour are habitually incapable of cutting taxes.

    This economic situation is awful, they try to accuse the Tories of doing nothing which is rubbish but when they cut taxes, it's easy to understand.

    This is a joke.

  • Comment number 18.

    Altogether a bit disappointing. Nothing bold. Nothing innovative; just juggling with the same old subjects. I would have liked to see the VAT on electricity, gas and coal abolished. This would immediately have helped everyone. Then he could have scrapped Trident, brought our troops back from Iraq and Afghanistan, and used the billions saved to implement measures to help people now struggling to pay their energy bills, Council Tax and mortgages. I do not think that what he has done to-day will get us out of the hole we are in.

  • Comment number 19.

    the most puzzling part of the whole charade was how Darling managed to keep a straight face when forecasting balance in 2016! they cant even get six month forecast right never mind eight years!

  • Comment number 20.

    A spring election almost for sure.

    This is putting money into the hands of the spendthrift, what a waste of money.

    This is an absolute disaster, you were right Nick, as I was, that it is National Insurance which is the sting in the tail.

    A fuller response later but who can now doubt that it is a scorched earth policy for a cut and run general election, 100 days for Obama would be consistent, Brown is going forward on his coat-tails.

  • Comment number 21.

    It's a tragedy that Kenneth Clarke isn't on the front bench. Actually, it's tragic that he isn't prime minister or chancellor.

  • Comment number 22.

    Please note: The 0.5% increase in NI is in both employee's *and* employer's NI. So that's a 1% increase in tax take in total, and the 0.5% comes straight off employers' bottom line. Thanks.

    http://prebudget.treasury.gov.uk/prebudget2008/stable_economy.htm

    I could write more, but like hundreds of thousands of other businesses of all sizes I have to organise adjusting all our billing systems to cope with a temporary VAT change by Monday. We only sell to other businesses so it's all pointless anyway.


  • Comment number 23.

    So a husband and wife who each earn £70,000 will have two personal allowances worth over £12,000 whereas a family with a single breadwinner earning £140,000 will have none.

    This is a sad reflection of the priorities of our government.

  • Comment number 24.



    Darling & Brown must have Got this one

    from WOOLWORTHS.


    I wonder if they shoplifted it when they

    were Kids,after H Wilson had done a store


    opening.



    UTTER UTTER UTTER BUNKAM!!!!!!!!!!!!!!

  • Comment number 25.

    It seems to have been forgotten that when Gordon Brown was Chancellor he sold 55% of the Countries Gold Reserves at a knock down price. Now the Country has growing massive debts just when gold prices are record high.
    Should he have sold the family silver when he did?

  • Comment number 26.

    Putting NI up for everyone on the higher rate threshold.

    Great way to try and save jobs.

    Darling has just made it more expensive for firms to keep employing staff.

    It should be making it cheaper.

    Great way to behave in a recession.

    What a joke.

    Labour haven't got a clue.

  • Comment number 27.

    Ridiculous. Do well, work hard, support the economy, and get taxed lots for it. Just because you earn £125k doesn't mean you can afford an accountant to do your tax returns. Frankly ridiculous.

  • Comment number 28.

    Bankrupt Britain

    Thank you Gordon Brown, why don't you go now and take Darling with you.
    The thought of Government Ministers walking away with a taxpayer funded pension after doing this to the UK taxpayers is a disgrace. Debtors prisons should be brought back to house this reckless bunch.

  • Comment number 29.

    the best phrase in the budget? Extraordinary times require extraordinary measures! Labour has suddenly turned Keynesian, what happened to all the neo classical paradigms we have blindingly followed in the last 10 years?all the irresponsibility of economic stability has suddenly turned sour with a dire outlook?
    So VAT? I thought only imports contain VAT , most food items that i consume on a regular basis do not contain VAT, then there is Menu cost would the supermarkets and restaurants have to redesign their menus.. The point is these measures are constrained by time lags and by then the economy is already in a coma, we need instantaneous measures

  • Comment number 30.

    Labour have trashed the economy for a generation. Again.

  • Comment number 31.

    George Osbourne demolished Darling superbly.

    Now it's only the Conservatives that can dis-arm Crash Gordon's "tax time-bomb".

    Give us a vote now!

  • Comment number 32.

    Just what! exactly are the tories advocating? do nothing! Wow!

    Young Osborne may wish to float his emptyness among the super rich and Camera on Cameron is stuck in the tory mould of 1986, while this labour government will continue to put jobs and people first.

    No contest really, Is there!

    Yes, indeed! conservatism is well and truely dead....................................

  • Comment number 33.

    So what good is this to married couples with no children? VAT off petrol but fuel duty up - therfore on change. VAT reduced - no VAT on food anyway No reduction on heating fuel as VAt is less then 15% anyway. In other words a total con that we are going to have to pay for in NI hikes and other taxes in the future.

    I like to see Gordon Brown or Alistair Darling living on what we bring home.

    Roll on the next election and goodbye Labour as usual the Conservatives will have to sort out their mess!!

  • Comment number 34.



    I now have to divert my IT team away from helping develop my business to fiddling around with all our accounting and ERP system to change VAT by 2.5%.

    Another 2 days productivity lost of my best people.

    Couldn't they just have lowered the basic rate of income tax? Employers are used to dealing with PAYE changes.

    Changing VAT is a real IT and administrative headache for mine and many other businesses.

    Is this supposed to stimulate the economy?

    It's just slowing us down.
    Another fine mess....

  • Comment number 35.

    Is it just me who thinks that only the Lib Dems are speaking sense about the economy at the moment?

  • Comment number 36.

    The Chancellor quotes the Japanese Minister of Finance about what they did wrong - he isn't going to get any sensible admission of error from that source.

    Japan prolonged the recession in the 1990's, the lost decade, by failing to concentrate on monetary policy & spending billions on public investment projects. As soon as the economy started to recover they slammed it by raising taxes.

    Sound familiar?

    Aggressive monetary policy is needed to ward off deflation is the lesson from Japan.

  • Comment number 37.

    what a masterpiece!
    so far sounds like a good balanced PBR.
    you have my full vote of confidence!

    the rich who got us into this mess will finally need to pay up...

  • Comment number 38.

    Surely any honest government would call an election before implementing measures which will have such a profound effect on the country for years to come. The prospect for the country is made worse by todays budget.

    Mick Bottomley

  • Comment number 39.

    He fell on his sword with the 10p tax debacle and now thinks he's benevolent giving it back to its rightful owners.

    All these measures are designed to boost the popularity of Herr Gordon and to make one hell of a mess for the Conservatives to inherit when they are allowed to.

    I don't think the British public are fooled one little bit.

    This was an actual budget brought forward not a pre-budget.

  • Comment number 40.

    Nick

    What does the chancellor actual mean when he stated;

    "I also intend to withdraw the long-standing anomaly of the income tax system, by which the personal allowance is worth twice as much to higher-rate than basic-rate taxpayers."

    Is this a hidden missile in the form of a large tax increase to those people paying 40% tax?

    Cheers

  • Comment number 41.

    These pending tax rises in 2011 are just a smokescreen; the government growth figures are a joke; once the true growth is known they'll need to put at least 5% on income tax for everyone for about 5 years to just break even.

    a 2.5% vat reduction helping stimulate the economy? It won't be passed on, and even if it was nobody would even notice it.

    Their "stimulation" package will have no effect apart from increasing public debt.

    They've lost the plot.

    It's clearly a scorched earth policy.

    As an economy we're totally dead until there's a change of government because these guys just don't understand how anything works and seem to be intentionally destroying the public finances.

  • Comment number 42.

    #11 Alexandercurzon

    Who exactly do you think is going to call this election?
    Trust me if the tories could call an election they would. But they cant.
    Drives me mad all these peple going on about 'call an election'! Weve got one. Its in 2010.

  • Comment number 43.

    Any chance you could use correct timings on the blog? There is no such thing as '04.49 pm'? It's really irritating, and detracts from the content. Thanks.

  • Comment number 44.

    When it came to the fuel hike, I thought Darling was straying close to Chris Tarrant's approach on who wants to be a millionaire, holding out a cheque and then saying "but we don't want to give you that..."

    Decrease vat and then increase excise duty to compensate so that people end up paying the same?

    Marvellous, and something only labour could come up with.

    Nevermind, that 1200 quid plasma tv is now only 1175, so I guess I'll buy it now.

    Madness. Sheer madness.

    There should be riots in the streets given the total contempt that the labour government has for its electorate.

  • Comment number 45.

    Mr Cameron said often these last few weeks, and gain on AM sunday that he would not support unfunded tax cuts. Now that the government has spelled out the funding will he now support the cuts, or will he follow Osbourne reply to Darling and say nothing of substance

  • Comment number 46.

    32;
    You're right. They're not able to do anything because they're in Opposition. When have they ever said that they propose doing nothing?
    You appear to be a lone voice in the political wilderness!

  • Comment number 47.

    32 derekbarker

    Your analysis and understanding of events is as sharp and relevant as ever.....

  • Comment number 48.

    The single act which would take the pressure off the banks, encourage them to release the cash they are hoarding, and put such billions back into the economy via low cost loans and overdrafts is the repeal of the Mark to Market accounting rule.

    Why was this ignored?

  • Comment number 49.

    Call an Election!! This has gone far enough. Hopefully, the people of this country will now realise that this labour government is utterly incompetent. They preach to us not to borrow beyond our means and they go and do exactly the opposite!

    2.5% off VAT is the silliest solution I have heard. It will do absolutely nothing! They are deluded!

  • Comment number 50.

    So much for economic stimulation.

    VAT down by 2.5% will have a negligible effect (as if I'm going to rush off to buy a 1,000 pound TV just to save 22 quid).

    Yet petrol - something that every aspect of the econony needs to use and which is highly taxed - has its duty raised.

    Bizarre.

    As for 2010-2011: this shambles will hopefully be ejected from office.

  • Comment number 51.

    Darling's chosen number on future growth - is it:
    a) a genuine forecast?
    b) wishful thinking?
    c) a reqiured factor, resulting from cynically working back from the borrowing projection he wants to use ?

    nb Spot the irony of announcing the running up of Goverment debt on a heroic scale in the same statement as announcing that some of the borrowed money will be used to fund a debt advice line ?

    You couldn't make it up.

  • Comment number 52.

    The PBR in one word: weak (mostly tweaking). Where is the vision? Where are the bold strategies?

    Disappointing - motorway funding?? What about the railways - too much of a basket case, perhaps? How about a world-class broadband infrastructure - too useful?

    Missing: initiatives to improve the skills and education of the general population - example, part-funding undergraduate university degrees

    Missing: initiatives to resolve UK's overdependence upon financial services - example, grants program to stimulate cleantech R&D - or at least a Select Committee for a Sustainable British Nation

    Missing: initiatives to create sustainable international systems - example, convening meetings to accelerate Koyto and Doha negotiations

    I'm just a little guy so I don't know what exactly the best initiatives would be, particularly with reference to international systems, but if I had the resources of the government I'm certain I could come up with a set of bullet points for moving things forward.

    I acknowledge this was a PBR and maybe the initiatives I'm seeking are off-topic for PBRs.

    But until these initiatives are undertaken, long-term sustainability will remain doubtful.

  • Comment number 53.

    #44 Getridofgordonnow

    I think your name suggests you were never going to have the most balanced view of the PBR!! lol

  • Comment number 54.

    Vince Cable's balanced and thoughtful response to the pre-budget report was in sharp contrast to Osborne's hysterical rantings.

    No matter how much the 'foaming at the mouth with anger' brigade on here hate Gordon Brown and Alistair Darling, their own lot are offering NO answers.

    The tories offer no alternative, Cameron and Osborne are clueless. Kind of defeats the point of being an opposition, whilst ensuring they stay one

    Bill

  • Comment number 55.

    Against my better judgement watched the statement on TV. Hindsight should have disinfected the green house.

    Sorry, at least with Tony Blair you got smoke and mirrors. With Brown and Darling it's a downright con trick that our children and grandchildren will be paying for.

    As a pensioner yes the increase is worth while but to take it back by a .4% increase in personal allowance. Pensioners I urge you write to you MP's we deserve better than to be conned.

  • Comment number 56.

    SHAME ON YOU, Nick. Thought you would be the one to bring it up. But you did not.

    I cannot believe that there is not a single journalist who even dared breathe the words"housing slump" to the Chancellor, as though it does not exist.

    Whats all this gobbledegook that this government is on about with just a bit of spit and chewing gum.
    They deserve to be booted out for their dithering and failing to see that the housing market required their most urgent attention. Increasing the stamp duty threshold to say £400K for one year and demanding that banks start issuing new mortgages would have gone a long way to kick-starting the serious slump.
    Next...
    Other than that....let's have a general election and get rid of this government now.

    My prediction of todays PBR.. IT WILL FAIL.

  • Comment number 57.

    This is utterly disastrous. Does Brown really think this will win him the next election?

    We are drowning in a sea of debt and Brown has just hit us over the head very hard with additional taxes.

  • Comment number 58.

    re 42 mypetdragon

    Sorry you find my post so irksome????

    Personally i would like to March on Westminster.

    Not that Messrs Brown would take any notice.

    In any event they would arrest me under the terrorism legislation.

    Pleased to hear youre so HAPPY to live under their RULE of abuse.

  • Comment number 59.

    #14 hiddenranbir

    Quite! ;o)

  • Comment number 60.

    Brown’s position is now so bad, that he can’t lose.



    He’s going to run up unprecedented and unsustainable levels of debt in the hope of bribing the public.



    Either it works, people are stupid enough to think he knows what he’s doing, and Labour remain in power – thus giving him what he wants – or it fails, and the Tories have to come in and clean up his mess, introducing painful taxation policies while having their spending plans hamstrung.

    Labour than can pick off the Tories and blame them for the bad times, claiming that they are both overtaxing and cutting spending on public services.

    There are a lot of people who will fall for that, and jump on the ‘Same Old Tories, Cutting Services’ bandwagon.

    The Tory government will then be tarred with the same brush Thatcher was tarred with when she and Howe had to sort out the last Labour mess.

    and to some people defending brown on here: Learn some basic economics!

  • Comment number 61.

    It doesn't matter what the Labour party say because it is meaningless. The country would like to make a democratic choice as to who should lead us through this crisis. Many of us do not trust this government as they riddled with contradictory and hypocritical views. Gordon Brown exists in a bubble and we, the populace, are in a very real colourless place, largely thanks to him and his henchmen.

    Darling's PBR is garbage to the majority of us. Trying to induce us to spend when we know we are going to be REALLY broke later. Does he think we are muppets? Don't answer that!

  • Comment number 62.

    Oh and for the person who applauded the fact that the rich finally have to pay up. Er.... you do realise this applies to 1% of society?

    Yes that will solve ALL our problems! wake up Labour supporters. You had 11 years and you couldn't hack it. At least have the decency to admit you screwed up. Or is this all the Tories fault too?

  • Comment number 63.

    #18 Fredcringe

    I agree with your first point, Darling should have abolished the 5% VAT on domestic fuel.

    It would have benefited more vulnerable people to a far greater extent than the 2.5% reduction in the Standard rate which will be of more benfit to those who spend most.

    It would also have cost a darn sight less.

  • Comment number 64.

    54:
    No mention of any of Vince Cable's criticisms then I see. Too busy making a political dig at George Osborne! His attack on a left wing profligate budget was entirely justified!

  • Comment number 65.

    This is the most important financial statement since Howe's budget in 1981, and probably more important than that.

    It's deeply disappointing: our national debt will double to GBP 1 trillion, and that is based on the most optimistic growth forecasts. There is a total unwillingness on the part of the Government to face financial reality and no realistic plan to bring down the debt. Yes, it supposed to fall after 2015, but this is like all difficult targets (e.g reduction in carbon omissions): put them off far enough in the future and they are only a problem for the future.

    The whole budget is a political exercise; bribe the electorate, get people talking about the wisdom of fairly small issues (e.g. a 45% tax rate) to distract us from the big picture: we are going bust, folks.

    I'm cancelling all but essential spending in anticipation of economic collapse in the near future. Fortunately I was brought up for the first 20 years of life without a bathroom, without an inside toilet, and without a TV, so I think I can survive the collapse better then most.

  • Comment number 66.

    What a disaster!! This is not going to stimulate the economy at all!

    The lower paid spend most of their budget on food which was exempt anyway. The best thing to do was just cut income tax by as much as possible combined with a mass simplification of the system.

    Back to the 1970s and the poor old Tories are going to have to clear up the mess and make some very tough decisions whilst all the Labour socialists scream 'Tory Cuts'!

    I blame the British people for voting in this shower THREE times. All Labour goverments do the same - Bankrupt the country!! Will we never learn!

  • Comment number 67.

    #23 chrisotherwise

    And excatly why will the single breadwinner will have no personal allowances?

  • Comment number 68.

    Why do so many jump to the auto-quote of saving on a new TV.

    The VAT decrease will have a positive effect on the housing market and business, are people against a lower rate of VAT?


    I think the tories here, should respect the positive action from this government.

    Look, Osborne and co are like ICE in the SUN, they are just melting away.

    People, jobs and a firm commitment to public services," thats what is RELEVANT!"

  • Comment number 69.

    Currently fuel used in my business is taxed at 17.5% VAT which we recover in full. If fuel duty is to be increased to compensate for the VAT decrease the cost of fuel to our business will rise by 2.5% - we cannot reclaim excise duty! As a small business we can do without this sort of help.

  • Comment number 70.

    #52 isi-92

    Well said and a joy to hear another constructive contributor.

  • Comment number 71.

    Oh, where is that fount of left-wing optimism, CEH, when we need him?

    Did GB/AD do enough?

    Did GB betray the New Labour cause?

    Has GB been saved? That is Great Britain and not the person. Will anyone notice any of the measures announced today in terms of benefit to themselves? I think not.

    A sad, sad, sad, day for Labour.

  • Comment number 72.

    Fiddling with VAT (and raising stamp duty a few months ago) in an attempt to get people spending beyond their means again isn't the answer to the huge mountain of debt built up over 10 years of the global boom.

    Did I miss the part of the speech when Darling said he was going to cut all non-essential spending committments? ID cards, Trident, Aircraft carriers, quangos, etc? Maybe stop advertising all those pubilc sector non-jobs in the guardian newspaper? Perhaps start getting rid of all those diversity awareness officers, potato measurement directors, etc, who consume wealth for no benefit?

    What a terrible example they set.

  • Comment number 73.

    32. derekbarker

    Welcome back Derek, weve missed your keen analytical analysis of the economic situation.


    37. RonKentishTown

    Drone alert







  • Comment number 74.

    #10 PFF #55 MTB

    If you are going to have a rant at least get the facts right. The increase in Personal Allownces is £130p.a.

    2.15% not 0.40%

  • Comment number 75.

    Ha ha, my girlfriend asked me yesterday how long petrol would remain low for and I foolishly predicted 7 months. Too late already... Darling's raised the duty.

    Let's tax everything. I'd like to see dental taxes and hair-cut taxes. We just don't pay enough to keep our bloated public sector.

    (and quango's, we need more quango's!!!! arrggghhhh...)

  • Comment number 76.

    Today we saw what Brown is really all about.

    The old socialist at his very worse.

    Laughing at us all for being so niaive.

    A few sprinklings of give aways to his old labour left supporters to try to disguise that in future years those still fortunate to have a job will have to pay a heavy price for the millions who haven't.

    As Nigel Lawson so rightly put it he hopes the Tories have a LONG TERM plan to rescue what's left of the country's finances.

    I hope that those who supported him from the media wake up to what they have done.



  • Comment number 77.

    What's this "savings gateway" all about? If the government are prepared to give you 50p for every pound you save (ie 50% interest), then where do I sign-up?

    I can then borrow at 6% from my building society, and use it to earn 50% interest from labour, hey-presto, tons of money for simply moving money about.

    or am I missing something?

  • Comment number 78.

    #60 orangejuggler

    And some people are so stupid they can't even tell the difference between a question mark and an apostrophe!!!!

    So we will excuse your economic and political ignorance.

    :)

    Bill

  • Comment number 79.

    Astonishing. Reduces VAT by 2.5%. I guess that's basically supporting small businesses and businesses in general. They're not going to reduce their prices - they're just going to keep that 2.5% and hopefully that will be the difference between them going bust or not.

    Well, good luck with that Gordon.

    And then with the other hand immediately adds 7p (did I hear that right? Was it really 7p) to a litre of petrol. One of the major costs of business, road fuel, increased by 7% per litre? Wow, the hauliers are just going to love that. They're already under pressure from cheap foreign operators and then he goes and makes us even more uncompetitive.

    And as for those borrowing figures. 78bn. 118bn. 105bn. Astronomical. 8% of GDP. ANd this from a government that in 11 years has not once, in 50-plus budget predictions of future deficit requirements surprised on the up-side. Not once. So we can safely assume that 118bn quid is a hopelessly optimistic figure like the previous 50 stabs they took.

    Mindboggling incompetence and imprudence dressed up in a veneer of rigged figures and outrageously optimistic forecasts about how shafted this economy truly is. If the British Empire and its Commonwealth last for a thousand years, men will still say, this Labour government was the most incompetent in history.

  • Comment number 80.

    Chill, guys. Lending will start again - there's going to be a QANGO to make sure it does. You must feel better now!


    Incidentally, additional payments to most in January rather than April. Sounds like an April / May election to me.

  • Comment number 81.

    To all critics of Gordon: please be patient.
    After Tony Blair he is also cutting himself a retirement place on the international scene to save the world. Just give him a couple of years time so that he can groom the next PM: Peter Mandelson.
    People around the world already envy us these highly talented politicians. If they were footballers they would have already been snapped off us to save other Countries' economies.

  • Comment number 82.

    Brown looked smug as Osbourne was talking. The contempt the man holds the taxpayer in is astounding.
    Whilst I hope for an election, I doubt we will have one, and when they go they will be gone for at least 20 years.

  • Comment number 83.

    for 62
    "Oh and for the person who applauded the fact that the rich finally have to pay up. Er.... you do realise this applies to 1% of society?"
    And I would add that assuming they have been so stupid not to protect their earnings so far, they are beeing given enough time to make sure they do before the new taxation regime!

  • Comment number 84.

    The Tory Response:

    Regurgitate a Saatchi and Saatchi election poster.

    Clearly got their minds on the economy then.
    Not thinking of electoral advantage to be made from this at all.

  • Comment number 85.

    Not only could this whole gamble fail but we could also be in hock for a decade. I'm so so glad I have a mortgage paid off and savings in the bank. Do I now swap my savings for gold and increase the run on sterling?

  • Comment number 86.

    48 Euforever

    As an extremely interesting bean counter I know it is not within the power of the UK govt to move away from International Accounting Standards (nor even to set them). All UK listed companies have been forced to follow IAS 39 since it was announced by the EU in 2002 (I think) and effective from 2005.

    In any event the standard is not to blame, the risk management of the banks is.

  • Comment number 87.

    75# Doc

    You're right with the fuel tax, what we need now is the Tory Fuel Equaliser tax to lump about 10p.

    I guess that "bandwagon policy" is now forgotten by the Hindsight Party who need events to have actually happened before they make a decision, hence the mobidity of their current response. Do nothing, lets wait and see what happens.

  • Comment number 88.

    Post #65
    If we are going to hell in a handcart just explain the need to cut back on all but essential economic spending?
    If its all going to go to wreck and ruin why not max out all the credit, enjoy these last few months before we go back to the days of no TV's, privvies and leeches?
    Let your hair down man, maybe even get into the 21Century and stop using the word folks?

  • Comment number 89.

    Ah, Carrots, still knee deep in your own self-righteousness. The world might not be enough for the likes of you! however the vast majority of British people are delighted that the distribution of hardship is shared.

    By the way? do you think an unhonest person like Osborne has anything decent to offer the good people of Britain?

    Hey, maybe even some-one of your deminished business ability might gain from todays VAT cuts.

  • Comment number 90.

    #68 derek barker

    People, jobs and a firm commitment to public services, "that's what is RELEVANT"

    Tell that to my son, Derek - he's just been made redundant - THAT'S WHAT IS RELEVANT!!!!!

  • Comment number 91.

    Can anyone say whether the Government's 'Debt' figures include the tens of billions it owes to the financers of the private finance initiative (PFI) projects? [ The projects that build, maintain and service schools and hospitals on tick ].
    As I understand it we have to pay back the involved companies for the next 30 to 40 years.
    That's the definition of a debt to me.

  • Comment number 92.

    89. derekbarker

    I havent spoken to anyone today in business or employed who thought the budget report was delightful, though I agree with you that Nu Labour are very good at hardship distribution.

    I have more that enough thanks. Im quite happy with my lot.

    Osborne has the best thing that anyone can offer. Hes not Gordon Brown and thatll do for me.




  • Comment number 93.

    84. Eatonrifle

    The Tory Response:Regurgitate a Saatchi and Saatchi election poster.


    Be fair:

    It was
    Economical, cost effective and a good use of exisiting resources

    Oh yes and of course correct.



    None of which your team know much about


    Even you must have raised an eyrbrow when Darling made his prediction about borrowing years to come. He cant even get close 6 months ahead.

    Blind faith is a dangerous thing.







  • Comment number 94.

    91. BillericayMicky

    No PFIs are not included and nor are public sector pensions



    heyho

  • Comment number 95.

    derekbarker assorted posts

    Why do you need to use emotive language and personal insults. Can you please engage your brain and put forward some objective and coherent arguments for your position?

  • Comment number 96.

    #2 Phaeton

    Top post!

  • Comment number 97.

    The mother with the child:
    Q: "Will the VAT reduction encourage you to go out and buy?"
    A: "Nah. I didn't have the money to start with."
    Says it all really!

  • Comment number 98.

    "And some people are so stupid they can't even tell the difference between a question mark and an apostrophe!!!!

    So we will excuse your economic and political ignorance." Bill that is an HTML fault when you copy and paste (as I posted it somewhere else). But good to see you yourself offer really constructive criticism. Oh wait.. you can't. Because as usual with you lot it's the: Oh yeah well at least Brown isn't a Tory! as if that is of course a constructive debate. Grow up and when you can debate with the adults, maybe tell us what you think has happened to get where we are now. One tip: I lived and worked in Europe, you know where they have governments who managed to retain a surplus in the good years!

  • Comment number 99.

    93 Carrots.

    You seem to have the same blind faith in equal measure, just a different party.

    Actually I'm a bit sceptical of the VAT move particularly, I would have preferred more off income tax as in Cable's idea.

    CErtainly wouldn't be up for the "fuel equaliser" though or has that Bandwagon been parked now?

  • Comment number 100.

    Some have the impression that the increase in pensions starts in January like the child benefit. Reading the small print the £60 to be paid in January is supposed to be the equivalent of the amount a pensioner would receive if the rise in April was brought forward. Pensioners still have to wait until April for the rise due then.

 

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