Don't trust Gordon Brown

George Osborne is calling the Budget a "con."  He is, of course, right.  ConservativeHome may wish that Mr Osborne was much more committed to making the economic case for lower taxation but Mr Brown has zero credibility with us on tax.  The 2p cut today had a lot more to do with yesterday's 28% poll rating for Mr Brown than anything else.  There's panic in 11 Downing Street as they consider the possibility that the dismal rating will drive panicking Labour MPs into the hands of David Miliband or even John Denham.  Today's announcement of a 2p cut comes from the stealthiest tax riser in British history.  This Chancellor has presided over a massive expansion of the state and huge additional complexity within the tax system.  No Conservative should ever give him comfort.  He has been steadily raising taxes since the moment he entered Downing Street and we won't know the true impact of this Budget until we've all read the small print.  Every one of Brown's budgets has contained sleights of hand and my guess is that this one will not be an exception.  The sooner Mr Brown leaves all Downing Street addresses the better.

PS The Mail and Sun were far too soft on Brown this morning and in response to last year's Budget.  I hope they do their readers a favour tomorrow morning and expose this Budget for its deceit.  If they can't think of what to write themselves they should copy and paste this from The Spectator.

PPS There's also this from The Business:

"The net effects of all his tax policies is a tiny reduction in Mr Brown’s net position to the tune of £525m for 2007-08 but an increase in the tax burden of £280m in 2008-09 and £125m in 2009-10. On balance, therefore, and for all Brown’s bluster, this was a tax raising Budget. After years of bleeding the economy dry with well over 100 tax increases, and a massive increase in the tax to GDP ratio, the Chancellor has not changed his spots.  He remains a tax and spend Chancellor, who thinks he knows better than the market and individuals what makes an economy tick. He unveiled another plethora of extraordinarily complex and detailed initiatives on Wednesday, many of which will take weeks for teams of accountants to work out their full implications."

Comments

[Martin Wright]

Yes It's a typical Brown con. The Budget Speech is just show, trying to list a succession of alluring and misleading announcements.

The substance is that the tax cupboard is bare; there is nothing to return to us hard pressed taxpayers. The most impressive piece of deceit (the headline 2% Basic Rate Income tax cut)is a pre-announcement and in effect steals his successor's clothes. The 2008 Budget looks like being a pretty threadbare if not naked display.

[Umbrella Man]

100% right Tim. How did your friends at the Taxpayers Alliance get it so wrong?

[Martin Wright]

Another aspect that is so deplorable is the way that Brown is making low earners more and more dependent each year on his benighted system of Tax Credits. In my view there is a world of difference between tax allowances and universal benefits on the one hand and his complex system of Tax Credits on the other. the latter system seems to tie people into the state machinery more than good old fashioned tax allowances, creating a mass of people who become vassals of the state.

[matthew]

You appear to have accepted the line that it's a "2p cut". It's not a cut! It's 10p rise in the bottom rate of income tax, as well as a 10p increase in NI between about £35k and £40k. Overall the impact is nil.

Don't repeat the Labour line. Brown *could* have gone for a real tax cut to boost his poll ratings.

But he hasn't.

Overall tax is slightly up. There are no cuts.

[matthew]

on those cuts, here's the detail, from the budget report

15 Remove starting rate of Income Tax on non-savings income +8,630
20 Income Tax and NICs: phased alignment of higher thresholds +1,490
22 Basic rate of Income Tax reduced to 20 pence –9,640

So Income Tax up £8.63b due to the 10% band being scrapped. NIC up by £1.49b due to higher bands for 11% (rather than 1%), Income tax down from 22% to 20%, gives income tax down by £9,640b.

Net result?

£8.63 + 1.49 - 9.64 = £480 million TAX RISE.

Repeat after me:

THere is no tax cut.

Income tax has not been cut 2%, in fact NI/income tax is up by half a billion!

NI is just another name for income tax.

The real headline?

Income tax UP.

Not cut. UP

[Londoner]

As his successor will have nothing left to announce next year, the budget can be cancelled altogether, which should save a few million in printing costs etc.

Alternatively Gordon could announce when he becomes PM that as everything has already been decided, he may as well stay on as his own Chancellor. What was good enough for Gladstone...

[malcolm]

Osborne is right and my magazine 'Moneywise' is likely to slaughter this budget in our next issue but sadly it is not published until April 22nd (from all good newsagents only £3.95!!!).
The national press over the last few years has been weird, with Budgets attracting favourable headlines on the front cover (at least for a day) and then criticised inside on the financial pages. Let's hope Dacre, Thomson at the Times and Rushbridger at the Guardian have the balls to stick the boot in.
The Mirror will give it huge praise led by Browns odious mate Mcguire.The key will be the Sun, this budget is bad for many of its readers,will they have the sense to realise it?

[Richard]

Confess I haven't had time to check out all the spending info yet but will the Chancellor be borrowing again this year? Will there be reductions in spending anywhere?

[matthew]

I see the messagespace ad is 'Discuss the income tax cut on 18 Doughty Street'.

ARRRRGH.

Are so many people stupid enough to fall for the Brown spin?

IT'S NOT A CUT.

Thank you.

[Donal Blaney]

I agree with you Matthew. But the TaxPayers' Alliance begs to differ - should lead to as lively a discussion on 18 Doughty Street tonight as is evident from this thread!

[Richard]

I read an another thread that corporation tax on smaller businesses has increased. Is this true?

[Steve]

on GDP or whatever comp he used we are second only in the rich list to the USA.......USA is the worlds largest debtor and relies on a depreciating currency and Chinese buying treasuries....... how can that qualify as rich??

[matthew]

yes it's true, Corporation Tax on small companies (up to £300k) is currently 19%. It's going up to 22%.

[Martin Wright]

Londoner @ 16.49 If you think you were joking...........I wouldn't be so sure. Whatever form is followed, the reality is that the successor will be a cypher.

[TomTom]

I was disappointed not to hear anything about the wheat harvest and whether we will surpass the Capitalist West this year....or cement output.

Just concentrating on Income Tax II - or National Insurance should be a good campaign theme.

Brown has cut 3p in £ off Income Tax since he started yet Taxes just get ever higher. Funny that !

[Alex Forsyth]

No I wouldn't trust Brown either. But you have to hand it to him...

He just outmanoeuvred Club Cameron in the bullshit stakes.

[mirthios]

I think this is worth repeating;

Anyone whose income is between £5,225 (the personal allowance) and £18,600 will actually be paying MORE tax.

Simple example: Man (under 65) on occupational pension of £8200 has a taxable income of £8200 - £5225 = £2970.

From April 2007 he will pay 10% on £2230 (£223) and 22% on the remaining £740 (£163) = £386
From April 2008 he will pay 20% on the whole taxable income = £594.

That's £208 MORE - a massive INCREASE of 54%.

The poorer you are, the worse it gets.

Not until you reach £400 a week will you pay LESS income tax - and then your bill will reduce from £3159 to £3115 - a reduction of
less than £1 a week.

Don't allow the press to fool the poorer people who will be paying more tax.

[Goldie]

A con it may be, but how foolish Cameron and Osborne look now....they didn't care commit publicly to any tax cuts, and the tax-and-spend Chancellor just cut taxes by 2p. Oh dear...

[Mark Wadsworth]

I disagree. You CAN rely on The Goblin King. To lie and spin and cheat and make everything a little bit worse every year. In that he has a 100% record.

[a]

According to Chris Dillow's fine blog, the 1997 Labour manifesto said :

"Our long-term objective is a lower starting rate of income tax of ten pence in the pound. Reducing the high marginal rates at the bottom end of the earning scale - often 70 or 80 per cent - is not only fair but desirable to encourage employment"

[Og]

GORDON AND THE DONKEY

A young man named Gordon bought a donkey from an old farmer for £100.00.

The farmer agreed to deliver the donkey the next day, but when the farmer drove up he said, "Sorry son, but I have some bad news... the donkey is on my truck, but unfortunately he's dead. Gordon replied, "Well then, just give me my money back."

The farmer said, "I can't do that, because I've spent it already. Gordon said, "OK then, well just unload the donkey anyway. The farmer asked, "What are you going to do with him?" Gordon answered, "I'm going to raffle him off."

To which the farmer exclaimed, "Surely you can't raffle off a dead donkey!"

But Gordon, with a wicked smile on his face said, "Of course I can, you watch me. I just won't bother to tell anybody that he's dead." A month later the farmer met up with Gordon and asked, "What happened with that dead donkey?"

Gordon said, "I raffled him off, sold 500 tickets at two pounds a piece, and made a huge, fat profit!!"

Totally amazed, the farmer asked, "Didn't anyone complain that you had stolen their money because you lied about the donkey being dead?"
To which Gordon replied, "The only guy who found out about the donkey being dead was the raffle winner when he came to claim his prize.
So I gave him his £2 raffle ticket money back plus an extra £200, which as you know is double the going rate for a donkey, so he thought I was great guy!!

Gordon grew up and eventually became the Chancellor of the Exchequer, and no matter how many times he lied, or how much money he stole from the British voters, as long as he gave them back some of the stolen money, most of them, unfortunately, still thought he was a great guy.

The moral of this story is that, if you think Gordon is about to play fair and do something for the everyday people of the country for once in his miserable, lying life, think again my friend, because you'll be better off flogging a dead donkey.

[GM]

I doubt anyone will be taken in by the theatrics of a quick 2p down, with so much else forced up! But due commendations to Brown for his Gladstone comparison. Is he really reminding us of a time when politics was dominated by a serious-minded, rather windy and self-important politician, versus a witty, debonair, modernising opponent who turned his party's fortunes around, but who was accused of elevating style over substance??

[Don J]

Interesting that small business CT rises to 22% to discourage incorporation - wonder if it will drop back to 20% when basic rate Income Tax falls in April 2008.

(Well, I don't wonder, actually - we know it's just another kick at little entrepreneurs who can't afford a peerage)

[John Coles]

Quite impossible for Messrs Cameron and Osborne to complain - after all, they have made it clear that tax cuts are not party policy.

[Alex Forsyth]

Quite impossible for Messrs Cameron and Osborne to complain - after all, they have made it clear that tax cuts are not party policy.

Hoist by their own petard!

[Ash Faulkner]

Very clever, Gordon. He's caught the headlines, and that's all that matters.

Cameron clearly wasn't expecting this 'cut', and now the media have pounced on it. This is going to stick: Brown cuts, and he spends! Look how amazing he is!

Things are going to get harder; I thought they would.

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