Monday, 24 November 2008

Initial reaction to Darling PBR Speech

So, predictably, it starts with a reference per sentence to the Global economic situation. Yawn, if repreated enough do they think I will believe?

I see the BBC has Ian Watson doing the analysis - i.e. pure politics. All he concentrates on are Labour's moves to try and box in the Tories.

Perfect really, a screwed economy and all the Government want to do is cling to power and bash the opposition. Just what we need.

All with borrowing by the Government up to 8% of GDP - back to the days of the 3 day week for the UK. All we need now are the power cuts to match the 1970's.

The prediction of 0.75% to -1.5% GDP retraction next year is highly optimisitic. Looking at the trend line from this year Q1 could be -1% alone.

It has just occured to me too that there is much EU pressure to harmonise VAT at 19% or 20%. perhaps this cut is being taken so that when the tax is raised again in 2 or 3 years we can sign up to the EU tax harmonisation programme.

to be continued...


Ed said...

My initial reaction: why the f*** should I work hard if I'm just going to be taxed into oblivion each time a Labour Chancellor stands up?

Anonymous said...

"much EU pressure to harmonise VAT at 19% or 20%."

I thought that 15% was the harmonised rate. The 2.5% extra was the UK governments cut.

Steven_L said...

I think you've got to remember that two of Labours most influencial (Mandleson and Vadiera) are business ministers. The VAT cut is designed to be a tax cut for business that can be spun as a tax cut for Joe Public if you ask me.

I take it we're all pouring through the small print. Here's some things I've dug up:

Paragraph 5.8

"the income tax personal allowance will be restricted for those with incomes over £100,000 – the two per cent of people with the highest incomes – from April 2010, when the economy is forecast to be growing. From that level of income, the personal allowance will be reduced at a rate of £1 of allowance lost for every £2 of income over that level until it is halved in value. At this value, the
personal allowance will be worth the same as for a basic rate taxpayer. From £140,000 of income, the remaining allowance will be completely withdrawn at the same withdrawal rate, so that people with the very highest incomes do
not benefit from the personal allowance"

"a 0.5 per cent increase in the employee, employer and self-employed rates of NICs from April 2011, alongside an increase above indexation in the point at which individuals start to pay NICs – known as the primary threshold – so
that it is aligned with the personal allowance. This will ensure that the fiscal consolidation is broad based, without affecting those over state pension age, who do not pay NICs. These changes will be introduced from 2011, when the economy is forecast to be growing above trend rates and real incomes are growing strongly."

Box 5.1

"With projected negative RPI inflation, the Government would maintain the cash value of tax allowances and thresholds, and the RPI-indexed social security benefits [tax credits], consistent with statute."

Paragraph 5.11

"Measures announced since Budget 2007 will lift around a further
500,000 children out of relative poverty."

Paragraph 5.12

"Especially in these difficult times for the global economy, the Government will continue to increase financial support for children. The tax credits system is already providing an average of £3,400 a year to six million families ... From April 2009 ... the child element of the Child Tax Credit will increase by £75 above
indexation to £2,235"

Paragraph 5.21

"Demonstrating its commitment to this approach, the Government will introduce a child poverty bill in 2009."

Box 5.3

"the Government to provide direct support to vulnerable individuals through the recently announced mortgage rescue scheme. This new scheme will be extended to include
second charge mortgages"

I'll leave it at that I think.

Looks like singletons on average incomes like me are expected to fork out for 'hardworking families' games consoles, designer trainers and second mortgages (their BMW and kitchen) as usual.

No changes there then!

Bill Quango MP said...

Alistair Darling announced plans to double the national debt to more than £1 trillion.

Someone call Ocean is someone who really really really needs to consolidate his debt in one uneasy to manage monthly payment

Steven_L said...

What are the latest odds on hyperinflation then CU?

You were one of the first serious commentators to tout it as the last resort (well about the first unless you count the legions of anonymous commentators over at the Telegraph) you still stand by that?

CityUnslicker said...

Great stuff Steven. A real hammer blow for anyone that keeps their good job through the tough times.

As for hyperinflation, well the deleverage is nearly over so we can watch for the signs from January onwards.

I have mixed views at the moment.

Jon said...

I have just checked my supply of candles. Luckily I have some left over from the miners' strike (Heath stylee), still with stickers reading "8p". This for a packet of eight.

I also have two paraffin lamps, a wind-up torch, and good supply of bedsocks.

Memo to self: check the HWB for leaks.

Thanks, Gordon!

Anonymous said...

My initial reaction was one of astonishment that he can be so brazen in borrowing to pay for a tax cut, then on looking at the figures, I was even more astonished to find that he is borrowing to pay for a deferred tax RISE!

Hyperinflation? I can see it now as a certainty as this tax raising PBR settles down after a day or two being pored over.

I didn't think they could fuck us over any more or worse, but just how wrong I was. This is a tax rise too far for the near 9 million self employed, many of whom work in or are reliant on the building trade, who will have to find that extra NIC.


Anonymous said...

Paragraph 5.11

"Measures announced since Budget 2007 will lift around a further
500,000 children out of relative poverty."

I would say this is another attempt to garner more money from that fucking second rate writing cretin JK Rowling. Labour is facing some very bad times in the near future financially, and need more loot.

Maybe they can fiddle a few million like they did for the unions modernisation fund? Labour is bankrupt, but the leader of Labour is the best person to get us out of a financial hole?

CityUnslicker said...

Even Newsnight was no all that pro-Labour.

I don't think the positive media spin will last long. it will be like brown's final budget as Chancellor.

Bill Quango MP said...

My thoughts too.
He wants to borrow money for a tax rise! Its unbelievable.

Anonymous said...

"All we need now are the power cuts to match the 1970's."

We'll get the power cuts OK.

They are continuing to subsidise useless windmills, and refusing to build any real power stations.

Once the existing nuclear goes (finally can't extend the life any more), and a majority of the large coal-fired capacity goes too (due to EU large combustion plant directive), then we will get power cuts.

John Hutton had half a clue about this, but now he's gone and we have the warmist Milliband.

Oh yes, there will be power cuts.

Anonymous said...

And did none of you notice that petrol and booze are going up?

A pretty standard old-Labour budget when you think about it.

Anonymous said...

I still can't believe that just a week or two after Brown demanded oil price reductions be passed on to motorists at the pump, he has raised petrol duty.

Where is the front page outrage in the media?

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