One way or another Labour calculates that it will profit from yesterday's gamble

Yesterday Brown gambled and he thinks he can 'win' either way.  If the gamble sparks a recovery in his poll rating he will be happy but if it doesn't it won't be Labour that has to pick up the bills.  An incoming Conservative government will inherit a public finances nightmare.  Winning the next General Election will be the beginning of some very tough years.  It's been variously called a bombshell budget, a boomerang budget and a kamikaze budget.  I'll just call it cynical.  Deeply, deeply cynical.

Tim Montgomerie

Comments

[GB£.com]

Britain is shagged basically.

[DCMX]

Agreed.
For Brown it's total politics.

[Malcolm Dunn]

Cameron's strategy of being honest with people is the best way to deal with this cynicism.
I doubt Brown thought the headlines he received today would be this bad though. Labour MPs looked confident yesterday at 3.30, they didn't later.
I wonder what our leftwing visitors will have to say today?

[Norm Brainer]

...or if it does go horribly wrong then he can stay in charge of a bad economy which he looks good at dealing with (apparently) and can keep other stories out of mind. The more misery he creates the better his poll ratings, and the more people reliant on him for benefits, the worse education is so he can fool them more easily.
A bad economy mean people are using less electricity so less chance of the lights going out because they have failed to plan for it.
Also could mean less immigration because why would anyone want to stay here.

It's just not in labour's interest to do good for the economy or the country - never has.

[Mapa]

1/2 the working population earns under £23,000.

only 10% of people earn more than £40,000

only 2% of taxpayers earn more than £100,000 a year.

Only 1.3% earn more than £150,000

Spread the wealth - 'middle england is a delusion' sold to the have-nots!

[rugfish]

So Alistair Darling has knocked VAT down by 2.5% for a year. WHOOPEE ! ( not )

It'll not make a blind bit of difference to people spending and I doubt that people will enjoy the tax hike it'll cause in future.

If Darling wanted to give people a gift this Christmas, then a simpler and more effective way would have been to give a tax refund or to have announced a permanent reduction in income tax for the lower paid to 10%. But I guess to take away in one hand and give it back in another would be rather like a false Christmas present and it's no surprise that Darling didn't do it.

Glad Tidings are had by businesses however which will be able to spread their tax payments ( no reduction just a bit longer to pay ), and I guess pensioners will be happy to receive an extra £60 to pay their gas bills.

After all, they're a bigger voter base than any other so it makes sense that.

But how come all this is costing £20 billion then and how come he wants double back in tax, and how come he's sneaking in increases in the duty of alcohol, tabs and petrol which all happen to be VAT items???

Ho ho ho !!

Reduce tabs by 2.5% and then increase them by how much ?, not 5% is it ???
He he he he ho ho ho ha ha ha he he he

Still, I hope something begins to work on the economy soon but I don't see this making much difference except to our taxes.

I'd have preferred him to have abolished or lowered Stamp Duty ( which he's not collecting on account no houses are selling ), and brought the MIRAS back which Labour abolished, and given a straight tax cut or a rebate to the lower paid.

These things would put real money into real people's pockets and into our economy which needs a proper present this Christmas before it collapses in the New Year.

I also note they can save £5 billion on government spending which happily they see isn't needed but what about the £18 billion for ID Cards, what about the £7 billion EU Rebate, what about the £4 billion on two unwanted and unnecessary aircraft carriers, government contractors, quangos, over burdensome and costly FSA bureaucracy which together are eating away big holes in spending, costing businesses money they could well do with keeping, and helping to block the exit door out of the situation which Brown created with his barmy spending tied with bureaucratic tape which got us into this mess ???

Darling is no Santa Claus and neither him or Brown can even wrap a present properly !

[griswold]

Whether or not the economy recovers in 2009/2010/2011/never, Nu/Old/Labour will be out of office for twenty years or more.

Those Middle Englanders seduced by Blair and who voted for NuLab in 97/2001 will not ever again vote Labour(pensions and savings destroyed) and neither will their children.

Labour R.I.P Your epitaph "Gordon said no more Boom and Bust"

[Ken Stevens]

Scorched earth policy.

It is possible that Brown & Co have damaged Labour's election chances for a very long time.

[Norm Brainer]

only 2% of taxpayers earn more than £100,000 a year.

Only 1.3% earn more than £150,000

Exactly.. there's not that many of them, paying a large proportion of total tax revenue; so you have to be nice to them or they'll go elsewhere or pay more to avoid paying more.

[Alison Meyer]

For years and years and years to come voters will remember that Labour left Britain in deep debt.
This will be at least as politically defining as the Winter of Discontent.

[Comstock]

Hardly an unbiased set of front pages!

What are the Mirror and Guardian saying?

[Cleethorpes Rock]

Even the BBC website this morning has led with "Tories attack 'reckless' Darling". If Labour's fellow travellers at the Beeb have fallen of the wagon they really are f*****.

The fact that the headlines and editorials are so critical is a credit to our improved spin operation and clarity of message, centring on:

IT WON'T WORK

IT'S GOT US IN DEBT UP TO OUR EYEBALLS

WE'LL ALL HAVE TO PAY IT ALL BACK WITH INTEREST

which seems to be getting through. We all need to keep up the pressure and make sure Labour are not allowed to spin their rubbish about us "standing by and doing nothing"

[powellite]

Comstock - Lol! You're hilarious...I'm imagining the Mirror might be something along the lines of 'Captain corageous Darling smites Tory toff filth with scorching budget giveaways'...or similar

[Malcolm Dunn]

Mirror had a picture of Brown next to a headline entitled 'Gambler'.Dunno about the Grauniad but Sir Michael White praised Osborne, I fell off my chair when I saw that!
Diod Kaletsky have anything to say today? His column should be good for a laugh whenever it comes out.

[GB£.com]

"What are the Mirror and Guardian saying?"

LoL. Probably blaming it all on the Tories...

[Matt Wright]

Osbourne was right when he described Brown and Darling as operating a scorched earth policy.

[Letters From A Tory]

I hear Australia is nice at this time of year.

[David_at_Home (UKIP Supporter)]

Mapa,

"1/2 the working population earns under £23,000."

But many of these are women, married to husbands who earn rather more. (I know it’s not PC to point this out, which is another reason for writing it!)

"only 10% of people earn more than £40,000"

Many more are young people who should be on a rising income curve and have a reasonable expectation of earning more than £40,000 in the next 7 years.

“Only 1.3% earn more than £150,000”

I’m very surprised it is so many. Anyway, the very rich pay hardly any tax and can easily (and legally) avoid this tax increase (payment with share options, extra pension payments, family trusts, becoming non-doms etc), so the tax increases of the future will fall upon the rest of us.

“Spread the wealth”

A massive redistribution of our diminishing national wealth is taking place, via the pension arrangements, from those working in productive industry to the often unproductive public sector.

[Peter Wilson]

This budget is the equivalent of being a loan shark - "here, borrow some money (in the form of temporary tax cuts) but we want it back soon, with excessive interest (in the form of much higher taxes)"

[Richard Holloway]

When's the first opinion poll out?

[Western Star]

Heard Darling on the radio earlier being interviewed. Pathetic, just pathetic - repeating over and over when pressed as to how we - the public - would know when things were improving, that "probably in 2010" the situation would look better...
This is a gamble for them and they know it - their hope is that things will improve in time for them to go to the country at the last minute and win.

[resident leftie]

I think you are deeply wrong, and this entry has a nasty whiff of triumphalism. Darling and Brown did this because they think it will work. I have no doubt that they hope it puts the Tories in a difficult position, but not in order that the Tories inherit a mess - in order that they lose. I would hope that you would wish the plan success - it relies to a large extent on building confidence.

22 million people have more money in their pockets. This is the only government which has cut VAT. The burden of taxation, which falls disproportionately on the poor, has been shifted upwards - but not for a few years.

KPGM:
"Changes to income tax and national insurance mean that somebody working and earning £10,000 will be £118.80 better off in 2009/10 and 2010/11, rising to £215.58 the following year.

A person on a salary of £50,000 will be ahead by £343.30 in the next two tax years, and £240.08 better off in 2011/12."

So, despite the headlines in the right wing media (the Independent excepted), the vast majority of people, the quiet people who don't write to the newspapers, are better off. Let's just hope they look at the actual figures rather than the headlines. The problem is it's those people on £150k+ who squeal like stuck pigs, even thought the percentage of their income they pay in taxation is lower than that of their cleaner, to whom they must begrudge a tax break.

Cameron and Osborne complained before the statement that Labour wouldn't make it clear how the stimulus would be financed. Now that they have, they are complaining on behalf of their friends in the City, even though those very people lead us to wrack and ruin in the first place.

If I hadn't pointed you at the decile table with marginal rates of tax, and you came at it from scratch, what percentages would you assign to the lowest decile and the highest? The same rate of tax? A lower tax for the lowest decile, or a higher tax? Well, at the moment, it's a higher tax for the lowest 10% than the top 10%.

Now the question is, which taxes will the Tories restore? What spending will they cut?

[Elaina Brier]

OK Now for the TRUTH!!!!!!

To understand the credit crunch you have to understand the relationship between the availability of credit and the value of collateral that supports it.

Credit has been cut off! (closure of wholesale money markets)

THEREFORE.... Asset prices MUST fall to reflect this... i.e house prices (and other assets must fall 40% maybe more)

No amount of changes to VAT, Inheritance Tax, stamp duty etyc will have any effect!

GET OVER IT!

No Party has the answer... we just have to sit back...revalue assets ...then start the merry-go-round once again!

[Mapa]

Norm

an average of £3,168 more for earners over £140,000 in 2011.

would you leave blighty for that, expecially with prices falling and mortgage payments dropping for those earners worth triple that?

I actually like people being rich but to tax someone on 40k the same as 140k is simply not fair.

mye preference would be to get those billion from the 'havens' and set a standard tax rate of 15% and a higher rate starting at 35% for the 150k'ers

Spread the wealth (US) aka 'fairness' (UK)

[Michael McGowan]

Before the 1997 election, Ken Clarke memorably described Brown as a disciple of the Dolly Parton school of economics: fantastic figures blown out of all proportion with no visible means of support. All that CCHQ now has to do is rerun that footage with the caption: we did warn you.

[Michael McGowan]

Good to have Mandy's Muppett, resident leftie, back with us, trotting out Goebbels-like the line that it's all the fault of the Americans and the City. It was Brown that rigged the inflation index to exclude house price inflation; Brown that pressurised the BOE to keep interest rates low; Brown who shoved huge liabilities off balance sheet; Brown who set up a regulatory system that sat on its hands while Northern Rock doled out 125% mortgages with teaser rates.

£1 trillion of public debt EXCLUDING PFI, and staggering unfunded public sector pension liabilities. Spin that.

[pp]

Mapa wrote: to tax someone on 40k the same as 140k is simply not fair.

They aren't taxed the same amount, thats why percentages are used instead of a flat rate 'poll tax'.

Tax should be flat rate.

Put top rate tax at 90%, and the 'bosses' who pay it will up their salaries to protect their 'take home' pay. Their businesses will then have less to put up the pay of those further down the scale. This type of change only has any effect for a short amount of time. If the government takes more, then the workers get less, and it is the workers at the bottom who have least control over thier pay rates.

Stability is what this country sorely misses - long term planning (which brown always harped on about) has been made impossible by his own actions - 'pension' ha ha I pay my taxes and then invest my money as I please, no chancellor/city institution is going to stitch me up with a stupid 'pension' product - to be raided, locked in and messed around with.

[resident leftie]

Posted by: Michael McGowan | November 25, 2008 at 10:11

Good to have Mandy's Muppett, resident leftie, back with us, trotting out Goebbels-like the line that it's all the fault of the Americans and the City.

Mandy's Muppet I can live with, but can we avoid likening people to Nazis, no matter how good the Nazis are at doing things other than being Nazis?

[GB£.com]

"I actually like people being rich but to tax someone on 40k the same as 140k is simply not fair."

But they don't, that is a crude lie.

Before yesterday's changes, someone on 40k a year paid 26% of their gross salary in tax (£10,592) whereas someone on 140k paid 37% (£51,429).

I may not be as clever as you, but I thought that 37% is not the same as 26%, it is in fact 39% higher!

[Ken Stevens]

Michael McGowan
A quip by Dolly Parton herself:
"D'you know how much it costs to look this cheap?"

Somehow, if only I knew more about economics, there seems to be the inklings of an analogy there!

[resident leftie]

Posted by: pp | November 25, 2008 at 10:19

They aren't taxed the same amount, thats why percentages are used instead of a flat rate 'poll tax'.

Tax should be flat rate.

Do you mean, everyone should pay the same percentage of their income as tax, or do you mean everyone should pay the same fixed amount regardless of income?

If you mean the former, then currently they don't. The richest decile pays a smaller percentage of their income in tax than the highest.

If you mean the latter, then you are living in the 19th Century.

[GB£.com]

And Mapa, in money terms, 140k is 3.5 times 40k, but the person on 140k pays 4.85 times as much tax (51,429/10592), so they are already paying a disproportionately high amount of tax compared to the 40k earner.

[Eveleigh Moore-Dutton]

On the average earnings figures and who they comprise .... yesterday I was chatting to a twenty-something year old who is on the minimum wage or thereabouts. She may not earn a lot but she obviously has ambitions because she was shocked at the amount of tax that high earners have to pay.
The point I am trying to make is that even those on low wages may aspire to be highly paid one day and so may not be driven by the same resentments that Labour thinks ..

[John (Northumberland)]

Brown's economic 'miracle' aka a sea of public and private debt, caused this nightmare (ie spending way beyond means) so how in the name of all that is holy can more debt be the answer?

The only answer to this is to earn our way out of it. Therefore, we have to rebuild a productive economy for the 21st Century. We need less regulation, less State, less tax.

This is the platform to win the next election. And to begin the job of rebuilding our country.

I believe that yesterday was a turning point. The massive borrowings will make no difference and Labour will be revealed as a discredited 'busted flush'!

[Cleethorpes Rock]

Resident leftie fails to answer how this will all be paid for. If people know tax rises are on the way, they will sit on the money rather than put it into the economy.

I don't think these proposals are that great for the poorest either. They have a larger proportion of their spending going towards things like food and children's clothes, which are VAT exempt. However, a banker can save £25,000 if he goes out to buy a Sunseeker yacht. Excessive borrowing and fiscal incontinence will devalue the currency, meaning that it takes more pounds to buy goods in from abroad.

Of course it's wrong that the super-rich pay a smaller portion than their cleaners and maids, but charging 45% tax won't put a penny back in the pockets of the lower paid. If Darling wanted to help the low paid, why didn't he cut income tax? Why didn't he cut NICs, the tax on jobs? Why not raise thresholds so we take more people out of tax?

The answer is that Labour/socialist chancellors don't want the lower paid to keep their own money and do with it as they please- as that would present the danger they might stand on their own two feet and turn into Tory voters. Socialists would rather have the poor dependent on benefits and tax credits (benefits by another name) so that they're forver in the govenment's debt and forever in their pocket.

[m dowding]

A massive concern to me is that I and many others have said that the Country's finances were shot after Blair/Brown bought off the electorate in 2001 and 2005, with a deliberate stoking of the house price bubble, turning a blind eye to the rise in personal, corporate and government debt. Stealth tax after tax, spend, spend, spend, PFI, quangos. On and on the list of waste and profligacy. The good old Labour way and habit.
It is very much worse than stated yesterday but no one is allowed to se the books. One thing is certain, ten years will not be long enough to recover. 15 years of sensible management, maybe but with dreadful pain along the way.
I said it before, this is a wartime scenario and we are presently led by fools. Donkeys or otherwise. We MUST reduce public expenditure and staffing, bring in bank and credit common sense. As DC has said, innovate, create and produce goods and exports. The bloated Government and political machine needs culling. Fewer MPs on much less comfort would also be a good example. Time for everyone to feel the pain so far inflicted on the less fortunate and less able to cope.

[NigelC]

resident leftie 09.59
What about the taxes rises on tobacco, alcohol and fuel?

[Malcolm Dunn]

I hardly think Resident Leftie,there is anything triumphalist at all about this thread. I would imagine people reading it would be angry but also deeply worried.
Even if the Chancellor had not chosen to temporarily reduce VAT or the other more minor measures he took yesterday the fact that he had to issue such a major tax grab after a decade and a half of above trend growth simply to try and balance the books in 2015 shows how badly he and Brown have mismanaged the economy. I can't think that learning that would make anybody of whatever political persuasion feel a sense of triumph.

[Teck]

How about all this being Labour's cunning strategy to draw public attention to their gallant attempts to right the economy which they blame on global reasons rather than mismanagement, and seek an early mandate to see through their rescue package?

Alistair Darling did say that HE will reduce PBR in 2011 and 2012 - big hints indeed!

My take is a General Election in early 2009.

[resident leftie]

Posted by: GB£.com | November 25, 2008 at 10:23
I may not be as clever as you, but I thought that 37% is not the same as 26%, it is in fact 39% higher!

Not so much stupid, as ignorant - but there is a cure for that. You have only taken into account income tax. Take a look here for the correct figures including all taxation:
http://www.publications.parliament.uk/
pa/cm200607/cmhansrd/cm070222/text/
70222w0005.htm

I've split the url, but I know you are clever enough to know how to paste it back together.

[Ken Stevens]

You lot really need to keep a sense of proportion:

The sky has not fallen in after all. On the contrary, some sense of the rightness of things begins to be restored. But whatever the details and the fine print, history will judge yesterday as the turning point when Labour unfurled its old battle banner for social justice and the Conservatives chose to ride full tilt against it.

...Oh no, my brain has been rewired to inject Toynbee's view of the PBR in today's Guardian.

Nurse!!

[Allison]

I truly believe that he should forfeit his million pound pension.

[Michael McGowan]

Resident leftie, when I likened you to Goebbels, I was paying you a backhanded compliment: he was an ace propagandist. Like Mandelson and Campbell, he knew that a lie travels round the world in half the time that it takes truth to get its boots on.

Would it have felt better if I had said Radio Moscow-like?

[Steve Tierney]

Resident Leftie:

Well, I for one DO hope that the budget plans work. We've got bigger fish to fry here than how the party is doing, or indeed how the polls look. But there's really no way it IS going to work, sadly.

Elaina had the best take on it I've seen here. She's absolutely right that asset prices are going to fall and fall. But its worse than that.

We (by which I mean you, lefties,) have destroyed the country's ability to generate wealth, progressively and systematically with well-meaning but deeply flawed regulation after regulation. Then replaced it with imaginary 'growth' based on debt.

Debt-fuelled growth is not growth. Its deferred payment. It looks great until the money runs out, then it looks miserable. It's a paint job over dry rot and its all flaking away to show the scary truth.

Despite all the doom and gloom,I honestly dont believe most of us on here, or most people in this country, or anybody at all in the idiot government, actually realises the hole the country is in. I *almost* hope we *dont* win the next election. Because if we do win we are going to have to take such dramatic steps that they will end up looking like the bad guys.

But we *have* to win. I don't believe Labour are ever going to admit this mess is what it is. If they dont admit what they've presided over, they can't even begin to fix it. If they were to win again (putting all politics aside whether you believe me or not) we will see a mess unlike any this country has faced in modern history. We *have* to win because sanity in government is needed to prevent actual disaster.

[resident leftie]

Posted by: NigelC | November 25, 2008 at 10:35
resident leftie 09.59
What about the taxes rises on tobacco, alcohol and fuel?

The Chancellor wasn't allowed under EU law to exempt VAT reductions in these products, so instead, he reduced the VAT, but exactly made up for this by increasing duty. Therefore, these products are unaffected tax-wise. Now might be a good time to remind you that it was Labour who stopped an increase in VAT on fuel in the first place, when the Tories wanted to increase it.

I do find it amusing that while there is a world recession (and you can't dispute that) you are blaming almost everything on Brown, personally. Does this mean he was reponsible for the growth of the economy to date, too?

Darling explained yesterday that our economy relies heavily (I think too heavily) on the City, and in a financial crisis, obviously it's the country with the financial centre which will suffer. If the government is to blame for an especially deep recession here (and I'm not convinced of that) it's because they were too right wing, following Tory policies on house prices and deregulation, rather than regulating and removing tax incentives from investing in houses. The solution certainly isn't the party who very recently suggested the deregulation of the mortgage market.

The Tories have no coherent financial policies at all to deal with a world recession. Let's see those, shall we?

[Cleethorpes Rock]

Toynbee is a hypocrite. She wants to take more money from working people so they can never afford a villa in Tuscany like hers. Typical socialist "do as I say, not as I do" approach.

[John (Northumberland)]

"Resident leftie fails to answer how this will all be paid for.." says Cleethorpes Rock.

Well back in the mid-80's I was a student at Liverpool Poly. In the days of Degsy & the Militant Tendency. I was a Labour Party member in those days (forgive me Lord, for I have sinned!)

Anyway, I remember a debate in one tutorial - How all welfare, health service, businesses and other services would all be owned by 'the people' ie the Socialist Elite.

I asked, how would all this be paid for?
"By taxing the rich" came the reply. To which I said - but soon there won't be any rich folks left - you'll have taken it all away. "Then we'll scrap nuclear weapons and borrow the rest". And then what I enquired?

"This man is a Tory!" they screamed.

It took another seventeen years and the worst of Blair/Brown to make me realise; but for once the socialists got something right!

You see, this is how all socialists end up -justifying more control, more tax, more borrowings. However, it's one thing to share a tutorial with such people. A whole different ball game when they've been running your country for 11 years!

[GB£.com]

LoL Resident Leftie!

Mapa's point was about the top income tax rate tax band, hence his point about the 40k and 140k paying the same to which I responded.

You lefties. As least you can always feed yourselves with the enormous chip on your shoulder... ;-)

[Deborah]

"So, despite the headlines in the right wing media.. " -resident leftie

The Guardian "The £21bn tax gamble"
The Mirror takes a similar tack.
The BBC's Today program took Darling apart.

Even the left wing media can see what a mess this really is.

[Richard Calhoun]

Its worse than cynical, it is an attempt to totally deceive the electorate, it is spin and lies and hopefully this will see the end of Socialism

[Cleethorpes Rock]

If the Beeb, Grauniad and Mirror are now right wing, according to resident leftie, who in the media still supports Labour?(apart from Polly "five villas" Toynbee)

[London Tory]

I agree with Malcolm Dunn.

Labour MPs looked progressively less happy during the course of the afternoon. The body language of the Cabinet was awful. Even shrill little Cooper struggled in the media last night. Vox pops on the news of shoppers in the North of England showed that, to a man, none of them were buying this credit card con from Labour.

And a word of praise for Osborne and the Tory backbenchers, all of whom showed genuine anger, and I thought were excellent yesterday.

Clear blue water at last.

Sound money v utter profligacy.

Thatcher v Callaghan.

Brown v Cameron.

Yesterday was the day that Labour lost the next election.

[Michael McGowan]

Putting Labour in charge of debt reduction is as credible as putting Dracula in charge of a bloodbank.

The Tories' policy, for resident leftie's benefit, seems to be when in a hole stop digging. Brown's seems to be when in a hole, start drilling. There is going to be a nasty downturn worldwide anyway as we go through the painful process of paying off the mountain of unaffordable public and private debt which Brown and the banks encouraged us to borrow. Labour's claim that they can make it all better and having us shopping till we drop by dumping a cargoload of debt on our children and grandchildren is a lie. What happened to "lifting children out of poverty"?

[Old Hack]

For all of the eyewatering poor numbers yesterday, it was presentation that did Labour in yesterday.

How? Well firstly the claim that this all started in America is now risible. Not even the Mirror thinks that, so Brown and his muppet Darling were utter fools to put up American mortgages as a defence. Bang went Brown's fiscal credibility.

Secondly, the comprehensive leaking of the good stuff, the surprise of the NI rise and the let down of rises in duties to counter the drop in VAT combined to give people a poor impression of the package, regardless of its purpose.

Lastly, the media and the Lib Dems did not get behind Brown. This left the Tories far more able to prosecute the PBR.

However - the Conservatives have not won the economic argument. Labour losing does not equal Tories winning. Instead, the focus falls back onto the Conservatives to come up with a package of leadership and policies that the country can invest in.

Yesterday Osborne showed the ability to project gravitas at the despatch box. Now he needs to sharpen up the Conservative economic counter narrative.

Given what happened yesterday he may not have to do so before a New Year election, but he cannot delay either.

[geoff]

Cassius reckons that Labour could have done better:

http://cassiuswrites.blogspot.com/2008/11/not-much-of-toaster.html

[Norm Brainer]

ooh.. Our leftie has gone more left again - seemed to have been slipping of late.
One point I noticed "Cameron and Osborne complained before the statement that Labour wouldn't make it clear how the stimulus would be financed. Now that they have"

Have they really? Or have they just thrown in a few measures that will be popular with their supporters and other politically unaware people to make it sound like they have.

[J Hind]

This labour Gvnmt strengthened Health and Safety Legislation and Risk management to the point at times of Farce. So what happened yesterday ?

Aware Edinburgh home to labour supporting fiction writers Ian Rankin (crime) JK Rowlings (fantasy0 and now we Alistair Darling (delusionist.There is of course close neighbours Gordon Brown(Schitzophrenia)and Alistair Campbell ( Psycho). At least the Booker prize for 2009 looks good- if nothing else_

[David_at_Home (UKIP Supporter)]

Resident Leftie,

"I think you are deeply wrong, and this entry has a nasty whiff of triumphalism. Darling and Brown did this because they think it will work."

The problem we have here in the UK is that we have had an economy floating on a bubble of debt, both government and private, for several years and that bubble has now burst. I fail to see how any rational person can think that the solution to debt is yet more debt.

Essentially, Gordon Brown and Alistair Darling have hit upon a cunning plan to pump up the rapidly deflating debt bubble with another load of debt and hope the electorate does not notice until after the next election. If you put aside your political preferences, you will see that this so.

I write as one who has little confidence in the Tories’ ability to sort out the mess either. Nor do I believe that the majority of the rich are truly “Wealth Creators” ; in fact I think most real entrepreneurs are not driven only or even mostly by the prospect of great wealth.

I just wish that we had a prospect of electing a reasonable government which would govern for the nation as a whole rather than for narrow political advantage.

[pp]

Leftie wrote: Do you mean, everyone should pay the same percentage of their income as tax, or do you mean everyone should pay the same fixed amount regardless of income?

A single fixed %age (abolish NI etc). To bring this in, I would support one off government interference to ensure that the switch to this was as take home pay neutral as possible. Some peoples gross pay may go up and others down, but take home should be unchanged.

When the tories ditched the top rate of tax, it would have gone down a lot better if companies had been obliged to preserve take-home pay differential. The well paid were already being compensated for paying higher rate tax, so just cutting it was an unearnt gift for them.

[expatininsingapore]

Of course the Singapore government's response (and remember: because of fiscal discipline the Singapore government has accumulated massive surpluses in the boom times, Singapore has minimal taxes, and massive investments in infrastructure, health care, education, and quality of life projects) to the global economic crisis is to cut the pay of senior civil servants and politicians.

Meanwhile in Singapore, the government- which has announced a stimulus plan based on subsidies for increasing training by the labor force- which will be paid for by tapping into the surpluses run up during the fat years- announced today a reduction in the pay of top civil servants and politicians to reflect the economic downturn. Basically when the economy is hot, they get higher pay and bonuses, when it's not, they get lower pay.

Read it and weep.

http://www.straitstimes.com:80/Breaking%2BNews/Singapore/Story/STIStory_306495.html

Why can't the UK do this? Why can't the Conservatives if they are too afraid to talk about cutting the public sector at least advocate REDUCING the salaries of top civil servants and politicians! This would be hugely popular and the right thing to do.

What are the tories afraid of? Are they afraid of being so effective, like the PAP that they stay in power for more than fifty years?

[David Belchamber]

Old Hack at 11.05:

"However - the Conservatives have not won the economic argument. Labour losing does not equal Tories winning. Instead, the focus falls back onto the Conservatives to come up with a package of leadership and policies that the country can invest in".

GO excelled himself yesterday, of that there is no doubt. He is good at putting the boot in and he echoed a sentiment in the country; people are getting very angry with this government. Apart from stressing the size of the debt mountain Labour is bequeathing to our children and grandchildren - just like the PFIs - he made the vital point that NI is income tax by any other name. He also echoed a widespread feeling in not attacking - for the time being - the imposition of the 45% tax level.

But, at the risk of being called a troll, I would like to ask: where has GO and all his team been for the last 12 months? All sorts of people - including Roger Bootle, Damian Reece and others in today's Telegraph - have laid responsibility at Brown's door e.g.: "But surely we all now know the deadly truth - the UK housing market was a bubble waiting to burst. US sub-prime was just the proximate cause, not the underlying one".
Cameron and GO should have laid into Brown and Darling when the Northern Rock fiasco burst into the news, so that ownership of the domestic part of the recession should not still be up for discussion.
Old Hack sums up the situation admirably; GO has to put forward a credible alternative to Labour and we are still waiting.
He might heed what Vince Cable says in today's Telegraph: "The banking crisis has left the banks disabled and unable, or unwilling, to maintain the flow of lending...When comapnies cannot pay their wages, they close".

I have twice suggested what I think is a practical way forward but it has not attracted any attention!

[B.Garvie]

This dysfunctional Government has just played its last joker by emulating Japan. The prognosis for kamikaze politics is this pre-budget report becoming the Worlds longest political suicide note in history.

[Teck]

"I have twice suggested what I think is a practical way forward but it has not attracted any attention!" - David Belchamber at 11:57.

Please remind me as I seemed to have missed them?

[TomTom]

The 2012 London Olympics will be fun...who is paying for them ?

It would appear that Darling-Brown have decided to play the National Lottery !

[Joe James B]

The Treasury figures assume GDP growth resumes from the middle of 2009, and grow at 3% in 2011.
We all hope that's the case, but it's very optimistic.

If Labour does manage to get past the General Election (unlikely in my view, although we are at risk of a hung Parliament),
then they will not have a clue what to do afterwards.
It could be an election they'd rather lose.

[Norm Brainer]

It could be an election they'd rather lose.

You'd think so - any sane (although evil) person would want to run away and laugh at whoever has to fix their mess.
But I think the top part of labour just want power at all costs - it means nothing to them that the country and everyone in it (except them) loses out, and that they end up in power of something worthless - they should be put away for being mentally ill, not allowed to operate a kettle nevermind the country.

[GB£.com]

If I were CCHQ, I'd be releasing a list of all the previous government growth figures that have been later revised downwards, and show what impact on total debt there would be if the same average % error was applied to the latest projections.

You've got to hammer home how the government cannot be trusted on growth projections and how bad the real level of debt is likely to be.

[C Powell]

Mapa: the rise in National Insurance hits everyone earning over £19,000. Everyone now knows that (a) if you're poor Labour will do nothing for you, indeed, will hit you - remember the abolition of the 10p tax rate; and (b) if you do well or aspire to do well, you'll be clobbered. I think that pretty much covers all voters.

[Mark Williams]

This isn't a case of Brown hoping to win, it is simply a question of playing his hand as best he can. The trouble is he has played all his picture cards and is only holding twos and threes.

[Paul Biggs]

This is Darling and Brown's 'scorched earth' policy of a doomed government lumbering the incoming Conservatives with massive debt. There will be no economic boost from reducing VAT. Up goes fuel duty by 2p/L.

The failing construction industry desperately needs a boost and this could have been achieved by building much needed power stations in view of the UK's looming energy gap. Road building plans were brought forward, which will help.

It's absurd that a government trying to stop people buying new Jaguars and Land Rovers with the extortionate, looming VED rises is now being asked for a £1 billion loan by Jag/LR. Scrap the VED rises for new cars you fools!

[pp]

You'd think so - any sane (although evil) person would want to run away and laugh at whoever has to fix their mess.

Mugabe doesn't seem to see things that way in his country.

Tories need to set out their vision, and hit the ground running on day one to implement it -- no fannying around with endless consultations - a master plan and a mandate to implement it.

Make it simple to employ people, and simple to be employed. Allow lifelong training to be easily accessed. Minimise red tape - businesses make money by doing business, not from running their business (maybe direct payments to people for completing government red tape would be a good incentive to cut it?!).

[grumpy old man]

Every week I buy a lottery ticket and dream of all the wonderful things I could do with the first prize. In real life, I don't buy any big-ticket item until I can pay cash for it, and keep a firm grip on day-to-day expenditure. For 11 years, the Government have run the Country in a way which the ENRON Board would have found too fantastic to contemplate. Now, the only way out of economic meltdown for this govt. is to buy a global lottery ticket and cross their fingers. Darling should be known as "The Lottery Ticket Chancellor".
For Resident Leftie. Read "Life and Fate" by Vasily Grossman. In 900 pages, he develops the concept that there is little or no difference, in effect, between National Socialism, International Socialism or any type of Socialism, on the huddled masses who have to endure it. The idealogical differences between Brown, Blair, Hitler and Stalin are merely those of degree.

[Man in a Shed]

The answer here is for an incoming Conservative government to levy a specific Labour debt repayment tax, along with a statement that indicates the total of future payments to clear the debt.

This would nail the blame to Labour.

[David Belchamber]

Teck at 12.41: this is probably too simple to work but I believe in simple solutions to problems.

"I wonder if our team has considered the idea of the government assisted banks selling their toxic debts on commercial terms to Northern Rock on condition that the receipts were only to be used as working capital for mortgage lending and loans to businesses?

That might get things moving more quickly at less cost".

Posted by: David Belchamber | November 24, 2008 at 18:46

[GB£.com]

Excellent plan Mr Shed. 'Labour Debt' bonds.

[Teck]

Thnak you David [at 15:10],

I just heard on BBC R2 that the government "may have to intervene directly" to ensure the banks start to increase their lending and that Mr King added that "nationalising banks could not be ruled out."

I suppose this is along the similar lines, only harsher.

[James Maskell]

I like the way the Government said they will cut VAT next week but the duties increase has already happened, so a free week of extra taxation revenue from smokers, drinkers and drivers is taken by the Treasury.

If this has been done to offset the VAT cut then surely the duty will fall back when the VAT goes back up in 2010...right?

[Iain]

"If I were CCHQ, I'd be releasing a list of all the previous government growth figures that have been later revised downwards"

GB£ Yes I was thinking along thse lines, it would be a very good way to undermine the assumptions Darling has made in his budget, especially over debt. If the Conservatives showed the number of times Labour had to worsen their predictions for this and other years borrowing requirements, people would very quickly see that we are in a much worse postion than even the disasterous postion our finances are in according to his pre-budget yesterday

[ocv-me]

Whatever people may think about labour's ability to run the country, they are not stupid. They know their electorate and how to play the political game, or they wouldn't be in power. A shrewd player makes use of situations that arise to kill 15 birds with a single stone... and keep the stone.

So maybe this is all a deliberate plan by labour. They can see the country is a mess, and their chances of winning the next election are poor. So, address the crisis with measures designed to look good to your traditional supporters, while simultaneously generating a pile of trouble for whoever next gets into government. Since there is a good chance it may not be labour, they can then crow about the failure of the government in 4 years time ("it was never close to this bad under labour") before storming back in on a massive majority after just 1 missed term.

The biggest worry is whether it's actually possible to defuse this.

[resident leftie]

Note that the tax increases affect 1% of earners. The other 99% will gain. It doesn't hit "middle England" at all. This excludes the VAT changes and business tax changes.

Annual Income Change after National Insurance and Tax source KPMG:

09/10 10/11 11/12
£10,000 +118.80 +118.80 +184.78
£25,000 +118.80 +118.80 +109.78
£50,000 +343.30 +343.30 +209.28
£75,000 +343.30 +343.30 +84.28
£100,000 +343.30 +343.30 -40.73
£125,000 +343.30 -951.70 -1460.73
£150,000 +343.30 -2246.70 -2880.73
£175,000 +343.30 -2246.70 -4255.73
£200,000 +343.30 -2246.70 -5630.73

Posted by: pp | November 25, 2008 at 11:52

A single fixed %age (abolish NI etc). To bring this in, I would support one off government interference to ensure that the switch to this was as take home pay neutral as possible. Some peoples gross pay may go up and others down, but take home should be unchanged.

Well, then, you should support redistributive taxation, at least to the extent that the bottom 10% pay the same marginal rate as the top 10%.

[ocv-me]

those figures quoted by resident-leftie come from here
http://news.bbc.co.uk/1/hi/business/7746241.stm
they show the year-on-year changes to take home pay if your gross salary does not change, not the effect of the PBR compared to how it would have been before.
actually kpmg say in their own PBR analysis that everyone on over 20k will be made worse off by the PBR changes.

[tom walker]

well im just an ordinary family man who is goimg to work evryday to provide for his familyindeed we all work in this family thats the way weve grown up my politics dont matter if i am honest i see a bit of good in all partys but i havent voted in some time as i see it as the saying goes you all xiss in the same pot and i/we dont matter as long as we keep paying our taxes and shut up and do as we are told and usually i just accept my lot however the present situation has left me angry having followed the situation i find myself sreaming what is up with you all the only way to get through this is to work together yet i find the torie party in the wide media still trying to score party points we know its hit the fan argueing about which way to sort the problem is crazy grow up

[tom walker]

its me again you know the ordiary tax payer in middle england who is shit scared of loosing his job and his home,i find it ironic that all these extra jobs being created at the job centers where are the jobs,im tired having worked an 12 hour day again with a 15 minute break all day yes 15 minutes, thats ilegal you may say so shall i tell my boss who is taking advantage of the present situation and using it with the threat of redundancy hes already done it to another employee do it or else but who cares please dont tell me im lucky to have a job

[Richard Carey]

Tom Walker: "the only way to get through this is to work together yet i find the torie party in the wide media still trying to score party points we know its hit the fan argueing about which way to sort the problem is crazy grow up"

Tom, I understand you're upset about your situation, and as you describe it I can quite understand that. But in a democracy, debate is how we reach the best solution to a problem - yes, we were supporting the Government when they're doing the best thing in the circumstances (we agreed to support them in the recapitalisation of the banks, which should never have been required but was the only option left to them). I ask you this - with family financial problems, would you realy max out your credit cards and pay a huge APR in the future? That's what Brown and Darling are currently proposing to "solve" the country's family finances. Would you really want us to support them in that, or to point out where we think they were going wrong?

[Patrick Harris]

All a result of 12 years without opposition.
Well done.

[Peter]

'For years and years and years to come voters will remember that Labour left Britain in deep debt.
This will be at least as politically defining as the Winter of Discontent.'

Well said, Deborah - but by 1997, the voters had forgotten completely the winter of discontent. Let's just hope that by 2010 they have total recall of this and ALL labour's calamitous terms of office.