Today saw George Osborne’s first ever budget as Chancellor in which Nick Clegg and the Liberal Democrats showed how much they had sold themselves out. Despite accusing Cameron of threatening to raise VAT with a re-run of the famous Tory poster of “Labour’s tax bombshell” have now agreed with their coalition partners to indeed raise VAT to 20% in which the house was in uproar! The thing with the VAT is that it is generic, it targets no specific group, so in other words, rather than taxing higher earners, it is those on middle to lower incomes who will suffer from this “tax bombshell”. Here is a rundown of the main aspects of the budget:
- VAT will rise from 17.5% to 20% from January 4, 2011 (already touched upon but still rather ironic)
- Councils which propose low council tax increases will be offered extra funds to allow them to freeze the tax for one year from April 2011 (would be great if we had the money)
- Capital Gains Tax remains at 18% for low and middle-income savers but from midnight, higher rate taxpayers will pay 28% (now that I can agree with)
- The capital gains tax “entrepreneurs relief” rate of 10% on the first £2m of gains will be extended to the first £5m (frankly if they earn that much they deserve a level of taxation, especially now)
- No raise to alcohol, cigarettes and fuel (pity it wasn’t raised on cigarettes)
- Low income families will get more Child Tax Credit – the amount per child will rise by £150 above the rate of inflation next year (again, I can agree with that)
- Sure Start maternity grant will be restricted to the first child (kind of stupid, better have it the other way around as you will have more mouths to feed)
- Corporation Tax will be cut next year to 27%, and by 1% annually for the next three years, until it reaches 24% (should be raised for bigger businesses in my eyes)
- Average real terms budget cuts of 25% over four years – except for health and international aid (there goes my local bobby and half of the state sector teachers
- Personal income tax allowance to be increased by £1,000 in April to £7,475 – worth £170 a year to basic rate taxpayers (the sole thing in this budget I would commend, obviously the Lib Dems managed to get A concession out).
VAT rise which will hit the poorest hardest and corporation tax cuts…….in the words of J. K. Rowling, “I’ve never voted Tory before, and they keep reminding me why.”
Max
Good report Max
- Tax on cıgarettes and alcohol should have risen. We all know it`s not good for us, and I know I`d drink less if I didn`t have the option of 8 pounds for a litre of sainsbury`s basics vodka.
- The “entrepreneurs relief” tax break is appalling. I think some people need to learn what real life is like for the average low-earner.
- Producing healthy, supported children who are in a position to benefit from education should surely be a massive priority for every nation on earth. The cuts to sure start are really disappointing, some of us are second children!
- Cutting corporation tax? In this climate? Really?
- The rest of it seems fair, personally I`d like to have seen a guarantee of no cuts for education. Perhaps the tories are aware that the tabloids find it very easy in the short term to produce health horror stories (“War veteren dies in filthy hospital shock!”) but over five years in office it will be hard to demostrate falling standards in education, especially since most adults are convinced that exams are getting easier anyway. If one child got great A level results, and her sister, now aged 13, gets worse grades in 2015, who`s to say that they were originally as intelligent as each other?
The whole thing is a sham, the Conservatives’ (as they’re the ones running this farcical production [well Murdoch, Ashcroft, Coulson, Rothermere, Bamford, Angest and the others, but for appearances sake Dave and the Conservative Party] the Liberals Democrats bound by the terms of the coalition contract and, basically, unwilling to move against their powerful new friends as it will risk their power) ridiculously overzealous attempts to smash the deficit conceal a massive, all out assault on the public sector – academies being driven forwards ahead of all other institutions, 600,000 public sector jobs to be cut, average 25% cuts across virtually all departments, more than £1,250,000,000 of job seekers schemes gone, school building schemes destroyed and benefits attacked even housing and disability allowances. And that’s just the first round. I wonder how much privatisation they’re planning, how far will they go? The big, scary deficit allowing them to sell the most absurd ideas to the public. All this because it’s supposed to be good for us? Well, they’re either out to get the public sector, as I say, or seriously incompetent, detached and/or deluded. I’m having difficulty deciding which is worse…
Labour had a credible plan to halve the deficit within four years, which was quite fast enough (thank you very much) and would do so without ripping the country to shreds. This whole “deficit reduction” stunt and the huge PR campaign that’s surrounded it is being used as an excuse to push their Thatcher inspired/Conservative base policies down our throats. Not only that, but by whipping up hysteria over the deficit the Conservatives have everyone looking the other way, away from unemployment, economic recovery, child poverty and everything else that’s wrong. Well, until something disastrous happens.
And what do we get? A token political reform, that smallest step that could possibly be taken, brought to a referendum which will in all likelihood fail (at least if all non votes are counted as no votes as I suspect). And yet you’d think it will be the jewel in the crown of their achievements the way they go on about it. In actual fact, we could do a hell of a lot better, though the chances of a party in power changing to a voting system of no advantage to them is admittedly low.