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Good coverage from ConservativeHome over the last 24 hours too.

Yes superb stuff from Con Home over the past 24 hours. Two things have surprised me greatly with this. Firstly, the Taxpayers Alliance failing to spot the con. If Brown has said he's simplifying tax then fine, but he presented it as a cut. Secondly, the Sun being quite so stupid as to not read the fine print is shallow even for them.

Sun readers won't fall for it they are a lot smarter than that

I think Murdoch has already made his mind up who he'll be supporting at the next GE: don't you?

The Sun's treatment of the budget is laughable and desperate. If they back Brown in this way Murdoch will be backing a loser for the first time since he bought the Sun. It reads like the Mirror and Sun readers won't be fooled.

Its pretty disgusting when the country's finances become a stage for political trickery...

While the mainstream press don’t have the same impact they have had in the past in defining popular perceptions, the Sun’s treatment is still worrying (and indeed wrong headed IMHO)… we’ll have to wait and see I suppose, but the Sun’s sycophantic converge is disturbing.

Take a step back and think about the overall position.

(1) Yes, this is a "con", in the sense that it isn't a straightforward Nigel Lawson-style tax cut. It will leave more people better off than worse off, the numbers aren't massive either way, but there's not much point in denying it.

(2) It's all post-dated: this change doesn't come in until April 2008 and the odds on an autumn election must have improved.

(3) Significantly, Gordon Brown has decontaminated tax cuts. The terms of the debate can now become "what is the best way to have genuine meaningful tax reductions" (attacking a headline income tax rate cut for being clawed back elsewhere presupposes that you would keep the headline cut and drop the clawback). Strategically, that is something I welcome, and I think that's what the Taxpayers Alliance are getting at.

(4) The small business changes are awful - but you can, just about, argue they are a consequence of "flatter, simpler taxes" (but let's see what the legislation looks like before talking about "simpler"). This is the drawback in all those calls for flat taxes: someone's taxes invariably get 'flattened upwards'.

(5) Listening to Brown on the Today programme this morning, he 'explained' that he wanted to move to a long-term simpler two tier income tax system - you know, like the one Nigel Lawson gave us. So why did you have to go and bugger about with that system in '97, Gordon?

"Significantly, Gordon Brown has decontaminated tax cuts."
Has he decontaminated tax cuts or has he yet again proved that this government is all about spin, smoke and mirrors?
Has he given everyone a straight forward tax cut which will make them better off, or has he simple given us a tax neutral budget with a wee bit of distribution spread out over the groups he needs to do better with in focus groups?
This was a political budget aimed solely at wrong footing the Conservatives, and I would suspect that much of the jubilation felt by Labour MP's yesterday has already disappeared because he tried to wrong foot the public as well and they have not bought this con!
I think that Brown has shown yet again that he is not as politically astute as Blair, yesterdays budget looked, sounded and smelt like a cynical ploy to further the ambitions of one man and that is the chancellor.
As for decontaminating tax cuts I think that the effect will be the opposite and simple make the electorate perceive politicians as dishonest.
Have enjoyed the coverage of the budget on ConHom over the last 24 hours, it was by far the best site to visit for political reaction.

"This is the drawback in all those calls for flat taxes: someone's taxes invariably get 'flattened upwards'."

Which is why a lot of people who support them favour raising the thresholds so nobody does. The problem is finding the spending cuts.

I am also amazed at the Sun. Seeing as it has a disproportionate number of readers on lower incomes you thought they'd mention the abolition of the bottom rate.

As for Dacre, I don't get what his problem is. Surely he must know his readers dislike Brown more than Cameron, even if a lot of them find the latter's modernisation project irritating. That said the front page was better than I expected.

I think this was a very political budget, mostly designed to give Gordie a short term bounce - maybe his team panicked after few months of awful polls and bad headlines about their man. It was certainly designed to wrong foot the Tories, which it certainly did for few minutes.

Looking at the long term implications, this is going to be a DISMAL last budget for Brown. I wonder why none of his team picked it up – this would have never been released if Tone was going to stick around. There are three crucial long term mistakes which can cost Brown big if the Tories play their attack right.

1. Headline grabbing hype. I guess Brown team aimed to get the heat off and secure the premiership. “Tuppence off from your income tax” will be ramped up by News Corp papers plus the usual suspects (BBC, Mirror, etc). The hype will build up to expectations and oh boy how the public will be disappointed when the “cut” will not materialise in their pay package.
2. Corporate tax fiasco. Absurdly complex package which will hit the small businesses the hardest, via the increased workload just to comply with the tax regime and the 2% increase in tax. If I was a Tory strategist, I would describe this as “attack on aspiration”.
3. Income tax mess. The biggest loser of this budget is “low income single person” who suddenly saw their tax jump from 10% to 20%. This is most likely to be a young person in beginning of their career, say someone just out of university – with 4+ years of accumulated debt from student fees to pay off. This opens a GREAT opportunity to Tories, you have a whole section of young floating voters who have not formed their political opinions yet – and you can win them over by pointing how the Labour government has screwed them over by student fees and steep rises in income taxes when you need the money most. Add their environmental concerns, housing market etc over and the Tories stand a great chance of winning a whole generation of voters to their side (like Labour did in the 80s).

All that the ConHome coverage lacked was the ULIP view... (joke)

One thing I only picked up from the FT this morning is that whereas the 2% cut in the basic rate comes in from April 2008, the abolition of the 10% band is not until April 2009. As Govt borrowing is not increasing by £8 or 9 billion in 08/09, has anyone fathomed how he is managing that? I think some of the child tax credit etc increases are not coming in until 2009 and maybe the increased NI band at the top end. Even so, I don't see how these savings would be enough to square the circle. Can any of our excellent in-house experts (Lucy or Mark W perhaps if either is on this morning) explain this mystery?

If the conclusion is that we are getting the tax cut before the increase, to me this points to Brown wanting the option of a summer or autumn 2008 election rather than one this year. But if this is the case, is it yet another layer of cynicism by the Chancellor?

The Tax Payers Alliance deserve an E- for their brain dead analysis of this budget. Thank goodness I stopped myself from joining them.

Small business tax UP
Lowest paid tax UP
Borrowing plans INCREASED

"Does Ms Wade really think her readers are going to believe that guff?"


People who turn to the Sun for political news are hardly likely to take much interest in exploring the finer details of the fudget, sorry, budget.

Furthermore, Gordon Brown will be long gone from the Treasury when the true impact of yesterday's fiddling the figures (while the economy burns) becomes apparent, leaving his successor (David Miliband?) to take the blame then, while he basks in undeserved praise now.

Richard said "As for Dacre, I don't get what his problem is. Surely he must know his readers dislike Brown more than Cameron, even if a lot of them find the latter's modernisation project irritating."

Dacre wants a K
Dacre's wife is mates with Gordon's

Penny drop?

Londoner 11.10 - "FT says 10% band dropped April 2009". I think this may be a typo. Elsewhere on FT it says April 2008.

"Does Ms Wade really think her readers are going to believe that guff?"

I thought Sun readers did not care who ran the country as long as they had a big chest.

I bet Gordon's chest is bigger than Dave's.

Despite selling these tawdry newspapers, listening to my customers this morning, I get the distinct impression that they are not in the least impressed by yesterday's trickery and deceit!

The 'papers seem a bit like last year ,good headlines for Brown on most of the covers but inside much more balanced and/or negative views by their city/financial editors. It seems the sub editors on the front cover have designed their papers purely for reasons of politics rather than any serious attempt to analise the complicated strategems and the 'smoke and mirrors' that Brown has typically employed.
I was particularly disappointed with the Sun,it's coverage is rubbish and I do wonder if Murdoch has decided to support Brown. If he has and we still win the next election revenge should be swift and brutal, it would be good to News International paying a 'proper' level of tax on their British assets.
Conservatives 'though, should take heart from Frank Fields reaction on Today.He emphasised that for the first time Labour has accepted the case for tax cuts and it will make our job easier at a general election. I think that this is very important and it is a point along with the fact that this budget is a con and Brown is as dishonest as Blair that our spokesmen should be making adnauseam.

"I thought Sun readers did not care who ran the country as long as they had a big chest."

As I don't buy the Sun, would somebody mind telling me what that key opinion-leader Stacey (19) from Romford has to say about today's big news?

I was particularly disappointed with the Sun,it's coverage is rubbish and I do wonder if Murdoch has decided to support Brown. If he has and we still win the next election revenge should be swift and brutal, it would be good to News International paying a 'proper' level of tax on their British assets. - Malcolm

I cannot agree with this comment at all.

Rupert Murdoch should not be discouraged from continuing to invest in British media operations, as that would significantly reduce the chances of a British version of FoxNews emerging to challenging the godawful BBC.

Which other media outlet would be prepared to be so receptive to pro-war, evangelical and anti-environment voices?

Perdix responded to my post: "Londoner 11.10 - "FT says 10% band dropped April 2009". I think this may be a typo. Elsewhere on FT it says April 2008."

I have just rung them and you are right. Their prominent bullet point on the front page was wrong. The thing delayed until April 09 is the full alignment of the top NI threshold with income tax and the sub-editor writing the summary must have got confused. All bets off then for a 2008 election!

The Sun tends only to concentrate on figures on page 3 and they are usually more pleasing to the eye, so I understand, than Mr Brown's.

here's my fisking of the TPA's shameful report (also posted to Wat's blog)

The TPA document is useless.

It is based on incorrect figures and incorrect assumptions.

They claim someone on £45,000 will pay £12,983.16 2006-2007, and £12,533.00 in 2008-2009, a £450.16 CUT.

Saying "For 2008-
09 calculation, 2007-08 personal allowance used, which is the latest available and therefore
marginally understates the gain from the 2008-09 system."

But the budget report clearly states:

"Income Tax: indexation of starting and basic rate limits"

In other words, in real terms, limits are not rising.

So that's not a change, in real terms. But the TPA is using the indexing to claim that people pay £50 less tax (or whatever), when actually nothing's changed in real terms. This is completely wrong, akin to saying that someone who had £1000 in 1967 and £3000 in 2007 is £2000 better off. In fact, £1000 of 1967 money is worth far more than £3000 of 2007.

The ACTUAL *real* changes are

Remove starting rate of Income Tax on non-savings income (Scrapping 10% rate from 2008-2009)
Income Tax and NICs: *phased* alignment of higher thresholds (threshold raised by £75 per week above inflation in 2008-2009, and fully aligned with the 40% band in 2009-2010)
Basic rate of Income Tax reduced to 20 pence (from 2008-2009)

So let's actually check the *REAL* changes for someone on £45k, based on 2006-2007 money:

10% tax increase on first £2,150 of taxed income
2% tax decrease on next £31,150 of taxed income
10% tax increase on £75 * 52 * 0.97 = £3900 of taxed income

Net result:

£2150 * 10% - £31150 * 2% + £3900 * 10% = -£18

Giving a result that the tax payer on £45k is £18 PER YEAR better off. Not £450.16 at all.

Unfortunately the TPA have stupidly given Gordon Brown's two years of inflation by not index-linking the figures from 2006-2007 to 2008-2009

In any case, the figures being compared are the wrong ones - the 2007-2008 tax allowances start in April, about 2 weeks from now, have long since been decided. The analysis should be between 2007-2008 and 2008-2009. It doesn't make a lot of difference, but given that we're supposed to be analysing THIS BUDGET, it's pretty stupid to look at the wrong years.

The numbers comparing the correct years are:
£2230 * 10% - £32370 * 2% + £3900 * 10%

= £34.40 better off

So in fact the TPA's chart should look like this, based on comparing 2007-2008 and 2008-2009:
on £10k £172.10 WORSE off
on £15k £72.10 WORSE off
on £20k £27.90 better off
on £25k £127.90 better off
on £30k £227.90 better off
on £35k £167.90 better off
on £40k £34.40 better off
on £45k £34.40 better off
on £50k £34.40 better off

It is rather shoddy of the TPA to fall for Gordon's trick of adding several years of inflation to make himself look better.

From the TPA document:

"On the surface, however, this looks like a fantastic Budget for taxpayers, and very
unexpected. the threshold for top rate tax will rise from £38,335 to £43,000;"

NO NO NO! You got suckered by Stalin's con trick.

The 2006-2007 rate is £38,335, but the £43,000 doesn't come in until 2009-2010 - that's three years away. Dividing the two numbers gives an increase of 12.17%, equivalent to a 3.9% annual rise.

In fact, the small print of the budget reveals Gordon's con trick of using 3 years of inflation to massage the figures. Here's the text "raising the aligned upper earnings limit and higher rate threshold by £800 a year above indexation in April 2009".

In other words, the higher rate allowance is going up by only £800. Another case of Gordon's spin. (Actually in fact, the REAL increase is slightly less than £800, because of course £800 of 2009-2010's money is equivalent to only about £750 of 2007-2008 money).

And of course with the NI alignment, the difference between paying basic and higher rate tax is 31% vs 41% - only a 10% difference. That means that moving the higher rate allowance up by £800 benefits people to the tune of only £80 (£75 of today's money. BUT the second phase of Gordon's NI grab kicks in 2009-2010, so the people that are £80 richer due to the higher rate increase lose out because in 2009-2010, income from £38,740 to £39,825 (in 2007-2008's money), which will be taxed at 21% in 2008-2009 (20% income tax + 1% higher NI), will be taxed at 31% in 2009-2010 (20% income tax + 11% basic NI). In other words a 10% increase in tax on £1085, and a 10% decrease on £800....

So in fact, far from the wonderful increase trumpeted by the TPA, in 2009-2010, when the higher rate allowance the increase kicks in, higher rate tax payers are actually WORSE OFF. DOH!!!!

Talk about falling for the spin, hook, line and sinker - TPA says the higher rate allowance going up is wonderful, but doesn't notice that the increase is only £800 (and the saving is only 10%), and that that £800 increase is more than offset by a simultaneous increase of £1085 in income taxed at 31%.

I can understand this lack of attention to detail from the BBC, but the TPA is supposed to be representing taxpayers, and I expect better.

I've already given 2008-2009, so here's the comparison between 2007-2008 and 2009-2010 (because the changes announced by Gordon stretch in to up to then), in real money:

on £10k £172.10 WORSE off
on £15k £72.10 WORSE off
on £20k £27.90 better off
on £25k £127.90 better off
on £30k £227.90 better off
on £35k £167.90 better off
on £40k £56.60 WORSE off
on £45k £16.60 better off (based on £750 increase in higher rate - real terms)
on £50k £16.60 better off (based on £750 increase in higher rate - real terms)

Very poor, TPA, must try harder.

"Would somebody mind telling me what that key opinion-leader Stacey (19) from Romford has to say about today's big news?"

Stacey says that she has no problem with top heavy tax as she thinks tax is short for that thing to do with stuffing animals, and lots of her friends have messed about with their figures like that, although only Kevin has stuffed an animal so far as she knows.

She's not bothered about national insurance either as the nation doesn't have t**s to insure, and she can't see the point of insuring anything else. She's heard thresholds are moving up, which suits her fine as she's got lovely legs. She's all for green taxes as whoever wears green these days?

As for that nice Mr Cameron, he was well wide of the mark with his remark about Gulag - that a very nice meat dinner her mum sometimes does - what is he, a vegetable or something?

I don't know whether it is ethical to post something from another blog (Adam Boulton's) but I just thought it encapsulated everything, though the Ed may want to moderate it out. Here goes.

'This joke was forwarded to me by email I think its pertinent:

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 Brown 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.

Posted by: Damon - Birmingham 22 Mar 2007 10:03:20 '

From Evan Davies


"Overall, in 2009/10 when most of the measures take effect, the Budget takes £15 million aay from us. That's not a tax cutting Budget."

"Looking back on it today, I know I made some aritmetic mistakes in the rush to produce a post-Budget analysis. But it would be much easier for those of us covering Budgets if we didn't have to spend so much uncovering them first."

Contrary to my fears, it looks as if it is unravelling for El Gordo.

The Press Award for Meticulous Research goes to Anatole Kaletsky of the Times for this:

"In fact, the sums do add up — and in quite a simple way. On the personal tax side, the cost of reducing the standard rate of income tax from 23p to 20p is offset by the abolition of the 10p rate band and the increase in the upper earnings limit for national insurance, which will be aligned with the starting rate for the 40p top rate of income tax at £43,000. Between them, these two changes almost exactly balance the reduction from 23p to 20p in the standard rate."

In case you (or he) missed it, the standard rate was reduced from 23p to 22p some little while ago!

Kaletsky has become a bit of a laughing stock. Although he's recently become a little more circumspect some of his adulatory pieces on Brown make Tom Baldwins journalism look objective.
Some of Kaletskys critics believe that the prospect of becoming Sir Anatole is what drives Kaletsky to write these articles.

Has anyone noticed that defence spending has been frozen? Even including the "additional £400m" mentioned in the Budget speech? The total "departmental spending limit" for defence remains at £40.8bn for fiscal 2007/08 (including the £400m reserve), which is the estimated outturn for 2006/07. (Detailed arithmetic plus link to Treasury numbers here - http://elliottjoseph.blogspot.com/2007/03/budget-small-print-defence-spending-cut.html )

Allowing for inflation of 2%, this means a cut in real terms of £816m. Not what was announced. And not the kind of thing we should be expecting from the man who aspires to lead the troops he's penalising.

Malcolm, what is it about journalists that they will humiliate and demean themselves so much to get a knighthood? Will you kick me please if I ever get offered one (unlikely) and show any signs of accepting?

"what is it about journalists that they will humiliate and demean themselves so much to get a knighthood"

I think you are assuming journalists are more serious than they are. In education there is a saying "those that can do, those that can't teach". To the real world it should read "those that can do, those that can't write about them". The level of panic that NuLab has inculcated in the inadequate little people called journalists (just read to-day's Telegraph) says it all.

re The Sun.

The Sun is irrelevant because those readers who do not take any interest in politics and may well have been influenced in the past by the Sun headlines have already decided they will not vote NuLab again.

The stereotypical Sun reader has suffered as much as anyone at the hands of this government. Taxed to the hilt, alienated by the PC society, work taken or wages depressed by mass migration, they are also the ones who despise the welfare culture so actively encouraged by NuLab. The attack on the self-employed will not help.

Perversely the other major factor is the scandals that NuLab think they have sidestepped. Sun readers have nothing but contempt for Prescott, Jowell and Reid et al escaping justice. Just because NuLab have lied their way out of it does not change the reality that they are ALL guilty. The pantomime of Prescott and Jowell lying through their teeth and surviving may be acceptable in Westminster but certainly is not elsewhere.

The question we have to ask is why are we supporting a pointless war, soft on EU and seem relaxed about the Olympic scandal?

There are millions of votes up for grabs for any party that can accept they were wrong, change policy and explain why..... You have seen the result of spin this week for us as well as Brown (we have not looked a viable govt this week).

Does anyone think that ending support for the Olympics would lose votes?

“We supported them at 2.3bn but with charities and the poor getting hammered in the budget we simply cannot condone the waste of GBP7bn. It would be wrong of us to support the waste of this money when the government refuses to answer any questions on how it happened, why it happened or when ministers knew about it.”

I happen to think it is absolutely the right thing to do anyway, as to do nothing we look exactly like the thieving rubbish in government. Our support did not stop Jowell unleashing a tirade of abuse at the Tory party as her way of avoiding answering questions on the subject in parliament

How can we think about tax cuts that will bring accusations of “same old Tory’s cutting services” from the opposition when we support this fraud?

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