Pre Budget Analysis: Smug B******s

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Once again New Labour are breaking their own rules. This time the target is their own pledge “not to raise the basic or top rate of income tax” which went into not just one, but three successive manifestos and survived the transition from Tony Blair to Gordon Brown. In his pre budget report Darling is expected to announce a new 45p income tax rate on those earning more than £150,000 a year which will undoubtedly ruffle a few feathers. Furthermore he will announce a fiscal stimulus of up to £20 billion which will be subsidised by you guessed it: higher public borrowing. By increasing state borrowing from 70 to £120billion to rescue the economy from the downturn, as well as breaking his long-held vows on not increasing income tax, Brown and Darling have torn up their own rule book once again to stake their political future on their economic leadership, which at best is oppourtunist.

I believe this latest stunt shows he has been taking one to many lessons from Barack Obama. New Labour once prided itself on embracing the wealthy and the middle classes, indeed in many ways their ‘Prawn cocktail’ offensive which wooed City Fat Cats was why they won the 1997 election, however now, watching Obama win a landslide promising to tax the rich to kingdom come, Brown is tearing up his own rules for the sake of his political future. What makes me believe that this is nothing more than an electoral stunt is because by aiming his tax hikes at the rich the Tories are faced with a starke choice: defend the rich and risk being labelled elitist (when really all we want to do is reward not penalise success!) or back it and risk alienating a large swathe of middle england, the wealthy and their own backbenches and grassroots.  Furthermore this extra tax burden would not come in to play until 2010 which is likely to be the year of the election. Very clever Mr Brown.

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15 thoughts on “Pre Budget Analysis: Smug B******s

  1. The 45% tax rate may raise some tax, but probably less than 1% of the hole that needs to be filled. Labour have leaked this and are attempting to divert attention on this measure to hide the real pain that the bulk of the population will feel in the future…

  2. The pain is the even tougher measures the next government will have to take to get out of this situation: to put the governments accounts out of deficit. How long can a developed country run on this much borrowed money before the IMF has to be called in, before our nations credit rating is effected, before other such measures have to be taken?

    So this is what happens when the meak (Old Labour) inherit the earth; they have to borrow more than our country can afford.

  3. Old labour actually never had deficits as high as the Tories. Thank god no one listened to your calls for tax cuts over the last few years.

  4. I just wish Vince Cable was Chancellor, then we’d be in a much better position than we are now. Sadly we have an inept buffoon as Chancellor and an inept buffoon as Shadow Chancellor, neither of whom have any decent answers.

  5. Actually Labour is the only party since the war that has left a surplus.

    PT, you never talk about the detail anymore because when you do, you always end up looking incredibly dim. ‘Labour always wrecks the economy’ is just a slogan except for the fact that it isn’t short or catchy.

  6. Just to take issue with the first post, having a large income does not make you an automatic success and having a small income does not mean you’re not successful.

  7. “PT, you never talk about the detail anymore because when you do, you always end up looking incredibly dim.”

    This ‘incredibly dim’ person was a straight A student at school (in the days when that meant anything) and has played chess for England. At the age of 26 I was presenting to the board of the number one Czech band on business transformation and tearing strips off managers in that bank who were under-performing. In the first half of this year, I called a recession way before other commentators and in the teeth of wrong and wrong-headed attempts to rebut from the likes of you, Jack.

    You attack me for not going into detail, Jack, but the fact is that, unlike you, I come on the blogs to communicate not bore. To do that, I like to keep it simple. Cheerleaders for this government’s running of the economy are either stupid or emotionally flooded and obviously can’t evaluate the evidence objectively. I don’t think you’re stupid, Jack.

  8. Dan has instructed me to note to all readers and commentators that from now on:

    NO PERSONAL INSULTS WILL BE TOLERATED. ANY COMMENTS THAT IN ANY WAY RESORT TO PERSONAL SLURS WILL BE REMOVED AND IF THE SAME COMMENTATOR(S) CONTINUES TO POST PERSONAL INSULTS IN FUTURE COMMENTS THEIR EMAIL AND IP ADDRESSES WILL BE BLOCKED.

    In other words… keep it political not personal.

  9. You called borrowing of £100bn when even with the tax cuts anounced in the PSNCR it won’t get anywhere near that. You quoted reports that you hadn’t even read and couldn’t even get the right year into the bargain. You used a report that ranked one of the highest tax economies in the world as the most competative to try and support your calls for tax cuts. Then yyou said that taxes would have to rise. You also argued for higher public sector pay and then attacked the government for spending too much. You calculating anual borrowing by mulitlying quarterly borrowing by four. You say you like to keep it simple which perhpas partly explains why you couldn’t articualte what you meant by flexible labour markets. When these arguments failed, you claimed that it wasn’t your place to make these suggestions with no explanation of why you made them in the first place. And if you’re so good at presenting why don’t you present us with your ‘reverse shopping list’ that you promised us, or is that list just part of your imagination?

  10. I didn’t call borrowing at £100bn – after the biggest quarterly deficit in history I said it would be there if it continued at the same rate. I then said that the PSBR will be closer to my estimate than yours (I think you said £35bn). I will be right on that.

    Placing educational achievement at a premium, I support slight increases in secondary teachers’ pay which is not incompatible with a generally lower level of government spending.

    I don’t know which country you refer to, but there is a generally clear negative correlation between economic success and size of the state.

    Re spending cuts, I don’t think there would be much pain caused by taking the hatchet to the 1000+ members of the £123 billion per annum quangocracy for a start.

  11. Well actaully, you did say that it was running at £100bn, you can go and check if you like. And I said £43bn not £35bn. If we exclude the changes made in the PBR, then borrowing for this financial year will be closer to the treasury prediction than yours.

    You say, you don’t know which country I refer to, but it was clearly Finland and you will find that that the highest tax economies of the EU often deliver the highest standards of living.

    As for ‘the quangocracy’, according to you it was costing £180bn last time you mentioned it but now it seems to be £123bn. When I asked you to say where you intended to make the cuts you couldn’t do it then and you don’t seem to be able to do it now.

  12. You see dom, this is the kind of thing I’m talking about. Are you really suggesting that you knew what was going to be done in the pbr? And your silence on the other issues suggests that my intitial comment was the understatement of the year.

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