The new 50p top rate of income tax is hugely significant. Read more
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It is a gift for the Tories. And the timing is bizarre.
The International Monetary Fund has made its global economic predictions and the results aren’t too pretty for the UK. Read more
Two thoughts on the politics of the 50 per cent tax rate.
1) Alistair Darling has given the Tories a ticket out of tax raising jail Read more
There is a grim chart on page p36 of the Budget showing national debt “on a declining path”.
Unfortunately it only goes up to 2020, so it is impossible to see exactly when the Treasury expect the debt to return to 40 per cent of national income. I’ve made my own clumsy attempt (see below) which sheds little light on the matter, other than to show that it will take a very long time indeed. Read more
It was only a small promise but gives some insight into how the government works.
Darling promised £50m on housing for the armed forces, with a grandiose pledge: Read more
The Budget scorecard (see p10) is far from clear in outlining the full extent of the raid on high earners. But the footnotes give a rough guide to how much extra the exchequer will be collection from people earning more than £100,000.
In 2012/13 the Treasury expects to be collecting about £7bn a year. Most of that is from people earning more than £150,000. About £1.5bn comes from the removal of the personal allowance, £2.4bn from the new 50 per cent rate, and £3.1bn from cutting tax relief for pensions contributions. Read more
Being leader of the opposition on this Budget Day was like shooting fish in a barrel.
The forecasts didn’t predict a U-shaped recovery but a “trampoline recovery”, said David Cameron.
Predictions from the November PBR of a 1 per cent fall in GDP (it’s now 3.5 per cent) had turned out to be “utterly useless” and a “work of fiction”. Read more
Counting the same number twice is very New Labour.
So far I’ve spotted one example already in today’s Budget. Read more
You can see how much of a squeeze the government is in by looking at the figures for its tax receipts.
Projections for 2009/10 are: Read more
If you want to take away two main points from today’s Budget they are these:
1] Borrowing is about to go through the roof. The figure for public sector net borrowing (PSNB) was just 2.4 per cent in 2007/8. It will have jumped to a punitive 12.4 per cent this year, before easing back to 11.9 per cent, 9.1 per cent, 7.2 per cent and (by 2013-14) 5. 5 per cent. Read more
The FT revealed on Tuesday that Darling would have to issue more than £200bn of government bonds this financial year, far above market expectations.
“With public borrowing set to soar to £170bn-£180bn, the chancellor will have to tap the market for an issuance of gilts that will be well over £50bn higher than the Debt Management Office estimated last month,” we wrote. Read more
As David Cameron points out, there is an admission on page 200 of the Budget red book: “The current downturn is forecast to be much deeper than that of the early 1990s.”
Doesn’t this make a nonsense of Gordon Brown’s constant claim that things were much worse in the early 1990s when interest rates and inflation were in the double-digits?
A £1bn mass job creation programme is the centrepiece of the jobs package in today’s Budget. Alistair Darling is determined to avoid writing off a generation of young people and repeating the mistakes of past recessions. The irony is that he has opted to revamp a (relatively successful) Thatcherite scheme to do so.
The new programme will be called “Jobs for the Future”. Local authorities will bid for funds to set up youth employment schemes. Central government will effectively pay for part time jobs in the community. About 150,000 under-25 year olds will be taken off the dole and put to work by councils. Ministers want to create an additional 100,000 jobs in the private sector, by providing an employment subsidy for sectors such as social care. Read more
Some MPs are starting to panic about the plans for a daily attendance allowance. They are not so worried about the clocking in system, or what would happen if they are ill. The big concern is whether they’ll have any money for their long, long summer holiday.
Gordon Brown wants to push through his reforms by July — just before MPs disappear for a 12-week recess. This could mean that MPs will be forced to wait till October, when they next attend the Commons, for the funds to run their second homes. Think of all those mortgages to pay. How will they cope? Read more
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