At the TaxPayers' Alliance website, we've been following some of the nasties in the Budget. There are a few which are particularly nasty, and run completely contrary to the objectives Alistair Darling set out in his speech. Let's take a few quotes from that speech, and then look at the actions which will undermine his worthy rhetoric:
"Unemployment can never be a price worth paying."
And, suppose you need workers who travel a lot, salesmen for example, then you'll be hit by other stealthy tax rises. Jennifer Dunn shows on our blog that the increases in company car tax are going to mean higher rates for almost every car - around a 19% increase on a diesel Mondeo.
Despite that noble sentiment, Alistair Darling has increased the tax on employment - National Insurance - twice. With nearly a fifth of young people, aged 18-24, unemployed that is an incredible policy choice. We dealt with this issue in our paper on the parties' responses to the fiscal crisis and I've gone over our view again today in a new blog.
"Mr Speaker, I have been clear that support during the downturn must go hand-in-hand with steps to rebuild our fiscal strength once recovery is firmly established."
But, as Ruth Lea points out in an entry on our blog: "The Chancellor has shirked his duty to the country. Again." There was no serious information for the markets and the taxpaying public about how our deficits and debt are going to be brought down. Ben Farrugia and Mike Denham provide more detail. All we've had are empty promises and superficial changes.
"But this growth will come from more varied sources and not depend as much on the financial sector which will, of course, remain an important part of our economy."
The Chancellor says he wants to diversify our economy away from over reliance on the financial services sector but, as I pointed out in another entry on our blog, he has put in place a 75% increase in the Climate Change Levy for energy-intensive firms (who have Climate Change Agreements). That will mean more exported emissions, doing nothing for the climate, and more factory closures like the one at Corus last week.
I think all these sectors will pay more under this plan, directly or indirectly:
"I can also tell the House that, from the Budget, I will cut bingo duty from 22 to 20 per cent."
At least he did actually cut the tax on bingo, though they'll probably take that money straight back with the levy on domestic phone lines. All we can hope is that the next Government will take the need for spending cuts more seriously, and we won't see an increase in VAT as well as the National Insurance hike, following the rise back from 15%. Alistair Darling has done nothing today to avoid the need for such a ruinous tax hike on the poor.
