Darling, Dickens and debt
Monday, November 24, 2008 I've just spent the afternoon in a hotel in Bristol watching Alistair Darling on TV delivering his pre-Budget report. I'm no economist but you don't have to be an expert to understand what's going on.
The government is gambling big time with a short-term cut in VAT and other taxpayer-funded incentives in the hope that the economy will start to grow again by the autumn of 2009. Meanwhile the permanent increase in National Insurance contributions won't kick in until 2011 - after the next election. How cynical is that? Whatever happens, and whoever's in government, it's going to be years before Britain starts paying off our accumulated debts.
I wonder what Charles Dickens would have made of it? The BBC is currently featuring a TV adaptation of Little Dorrit. The Victorians had a simple remedy for people who borrowed money and were unable to pay their debts - they chucked the offenders in gaol. (The Chancellor must be happy he's living in more enlightened times.)
Simon Clark
On BBC2 this afternoon Andrew Neil (or was it Robert Peston?) described it as the "most Left-wing budget since Labour came to power [in 1997]". It's worse than I thought.
Reader Comments (6)
The thought of having to reduce cigarettes due to the VAT cut must have absolutely terrified them. So they raised the duty instead, a tax HIKE. What a miserable bunch!
Also, increasing the top rate of tax looks like being the official end to 'New' Labour and a return to the old.
And of course, the sin-taxes against fags, booze and petrol will rise "by an amount to offset the 2.5% fall in VAT". So, in addition to whatever extra taxes the puritans want to extort from us in the budget-proper; in 13 months time, when the VAT rate reverts to 17.5%, we will experience the extra burden of this little stealth-tax.
Reducing VAT by 2.5% does not really make any noticeable improvement to most people; certainly a lot less than when it went up by 2.5%!
Aren't the government lucky though to be able to borrow all this money and know that at the end of the day they can make the rules that will get all of us paying off the debt for them! Might be good in their minds, but what about the everyday man in the street and his debts - who is going to pay those? The government are advocating 'spend, spend, spend', yet somehow individuals will still have to find the funds to repay what they might spend now and this will be increasingly difficult with the rise of NI and taxes to come that the government will need to impose so we can 'bail them out'!
Of course, they are alright, with their salaries, expenses and guaranteed big pensions!
One more thing. I believe I heard Gordon Brown say something along the lines of increasing income tax for people earning over £150k pa and that this would not come in until after the next general election and it would be in their manifesto, so that it was open and above board (words to that effect) and how the Labour party do not go back on their manifesto.
What happened about the smoking ban then? They did not cite a total ban in their manifesto then, but we still got one! What has suddenly changed so drastically in the Labour party to convince us that they no longer tell lies?
Nothing, Lyn - there's no reason to suppose that anything that this Government says is to be believed. For me, this Government has achieved something that no other Government has - it's made me loathe living in this country.
I absolutely agree Joyce and believe me, if I had the finances I would be out of the UK like a shot, preferably never to return!
Unfortunately, I am not in a position to escape just now and with this ridiculous attitude of spend, spend, spend by this government, it is unlikely I will have the opportunity in the future, seeing as they will rob me and the rest of the population blind to repay the burden of debt they are imposing on us!