Labour’s Pre-Budget Report or Election Manifesto?
What we needed was a national economic plan but what we got was a weak party manifesto.
The Chancellor has ducked the hard choices on spending and cuts. Instead of facing up to reality he has chosen to move the goal posts by relying on fanciful growth forecasts. He could have used this Budget to make the tax system fairer. But instead people on middle incomes will be paying more tax while those at the top end continue to enjoy their loopholes.
The bankers’ payroll tax is the worst type of gesture politics and a gift wrapped invitation to tax avoidance. The hidden costs of this budget will be borne by low paid workers who face a cut in wages because of the 1% pay rise – which is lower than inflation – and an increase in tax for NICS.
This was the most fiscally irresponsible Labour budget or pre budget report we have seen in the last 12 years. While it is right that the economy needs to be supported with public spending until we are truly out of recession, it is reckless to announce increased spending for 2011-12, 2012-13 and 2013-14. The country cannot afford for Labour to carry on spending outside our means.
The Chancellor has totally failed to be clear as to where the axe will need to fall to tackle the structural deficit; simply squeezing budgets will lead salami slicing of key services. The public have a right to know how each party would balance the books.
The Labour party may talk of fairness but when it comes to raising taxes, they have slapped a 1% tax increase on peoples incomes, increasing everyone’s marginal rate of tax and making people earning over £20,000 worse off.
The 50% Bank Pay Roll tax is the worst type of gesture politics, even the Treasury hopes to only raise a paltry £500m out of the estimated £5bn which will be paid out by banks this year. The reality is that this tax will be easily avoided and raise virtually nothing.
The Government’s plan will hit the poorest the hardest, while some one on £15,000 will only see their pay rise by £150 some one on £150,000 will see their pay increase £1,500. The Liberal Democrats propose a tow year £400 pay cap so that those on low incomes can see real increases in their pay while those on the highest incomes will feel the pain.
