I can’t be bothered to go into detail about the UK budget, other than to say that fat man and his friend the badger have taken us all to Carey St. It’s our fault for letting loonies run the country into the ground. Or am I being a tad too harsh again?
This is NOT a ‘budget for jobs’ as Treasury Secretary Yvette Cooper – who took over the job, on merit, of course, from her husband Ed Balls – himself married to Gordon Brown, claimed with absolutely no supporting evidence. It contains no significant change in capital relief, no tax breaks for inward investment, no incentives for start ups, no reduction in the usurious employers’ contribution to national insurance, no small business loans, no increase in regional aid, no green incentives PLUS people clever enough to earn but stupid enough to get caught earning GBP 150,000 will be clobbered with 50% tax. It makes the bodacious claim that this (Milton) Keynesian government will peg public sector spending rises to 0.7%, lower even than 1981, year of the Thatcher Terror. Doing this will require losing jobs in the only ‘growth’ area of the British economy – the public sector. So it’s really a budget for JobCentres.
The budget will at least provide jobs for tax accountants will have a grand time transferring salaries into dividends and working out how to qualify these as capital gains, in much the same way as the lovely private equity boys did to pay 18% on their loot in the boom times, when the top rate of tax was a mere 40%. Britain now has 17,000 pages of tax legislation, by the way. Everyone is in agreement that increasing flat rates of taxation decrease net receipts – apart from Gordon, Alistair and Mr. and Mrs. Balls. But they won’t be running the country next year, which leaves us to wonder whether some of this stuff wasn’t merely malicious grandstanding.
The budget was not good for pensions. Gordon Brown famously raped the pension funds of several tens of billions by taking away tax relief on profits in 1997. Now, by capping tax relief on pension savings to only 20%, his puppet, Darling, has made it even less attractive for the working middle classes to save for retirement – if that were possible in this climate. Since these measures will bring in less than GBP 2 billion if we’re lucky, they have to be seen as politically-motivated, and again, designed to inconvenience the Tories next year. They will score an easy victory by reducing, if not abolishing, these increases, one of which is a direct breach of a Labour election manifesto commitment.
The budget was not good for confidence. Nobody in their right mind believes Yvette Cooper’s ridiculous assertion that somehow the UK will bounce back to 3.5% growth by 2010, especially since Chancellor Darling underestimated the extent of the deficit by more than GBP 70 billion so far, unemployment is predicted to reach 2 million and we have little to sell on the international markets apart from Simon Cowell and celebrity chefs. The undignified haggling with the IMF over whether Britain’s debt was likely to be GBP 135 billion or 200 billion on the night before the budget was a sleight of hand to obfuscate the fact that the Treasury now estimate the deficit to be an extraordinary GBP 180 billion – read GBP 200 billion after all.
The Chancellor could have abolished the insane identity cards scheme, put defence spending on hold, promised to stop spending money on belligerent ‘Liberal Intervention,’ scrapped the Eurofighter and Trident replacements and thus trimmed at least GBP 12 billion or more off the deficit. But he didn’t. We needed a budget for jobs. We got a lacklustre exercise in deck chair arranging on HMS Titanic from a crew who were already heading for the lifeboats.