Managed to catch most of the Alistair Darling’s 2009 budget speech on the radio, whilst driving to my appointments across Salford. A few announcements caught my eye (or ear!):
- Economy to shrink by 3.5% this year
- Borrowing to be £175 billion this year
- Duty on alcohol to go up 2% from midnight
- Duty on tobacco to go up 2% from 6pm tonight
- Fuel up by 2p a litre in September
- New 50% tax rate for those earning over £150,000/year
- Tax allowances removed for those earning over £100,000/year
As Nick Clegg, leader of the Liberal Democrats, described it, “Today we got a pick and mix Budget of recycled announcements from a government skilled in raising people’s hopes but incompetent at actually delivering help.”
“The Liberal Democrats would get practical help to people who are struggling and cut the vast majority of people’s Income Tax bills by £700, paid for by taking aggressive action to clamp down on all the loopholes and exemptions that benefit the richest people and biggest businesses.”
“This Budget is a political supermarket sweep of random promises, without even a hint of a plan or any likelihood the promises will be put into practice.”
While I consider myself to be fortunate that I found a new job (far be it from ideal) when my previous company fell into financial difficulties, if I had not, then the government’s offer to “guarantee” under-25s a job or training would not have helped me. Why do you have to be under 25 years of age to be “guaranteed” a job or training? The government should offer that “guarantee” to all. I doubt very much whether the government’s guarantee will be worth the paper it’s written on, with 2.1 million people currently unemployed and that figure expected to rise by another million.
The Government claims that by raising the top rate of tax to 50% for people earning over £150,000 it will raise £1.1bn. The IFS however says it will raise far less than this as people will simply avoid it, for example by presenting their income as capital and therefore only have to pay 18% of Capital Gains Tax.
Capital Gains Tax should be taxed as income and other loopholes closed.
Nick Clegg said: “The biggest disappointment in this Budget is its failure to sort out Britain’s unfair tax system. To put money into people’s pockets to help them make it through this recession.”
“Britain’s taxes are too heavy on those who can least afford it. And too easy to avoid for those who know how.
“The 50p rate will further encourage the very wealthy to avoid tax unless we tackle the unfair loopholes they exploit.”
The Government budget deficit over the next 5 years is going to cost £32,000 per household. The government has not made the long term tough choices which will return our economy back to stability in the future.
Nick Clegg said: “We would take big choices about what government should and shouldn’t do.”
“With a shocking deficit this year of £175bn we need a national debate about what the state can and cannot afford in the future.”
“That is the responsible way – the honest way – to reduce spending in the years ahead and avoid painful higher taxes.”
Nick concluded: “The country deserves something different.”