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Pre-Budget Report: The political battleground

Nick Robinson | 12:05 UK time, Wednesday, 9 December 2009

Stand by for a tax rise. All the signs are that it will be another increase in National Insurance, though no-one in the Treasury will confirm that.

Alistair Darling, PBRIt will be presented as necessary to protect spending on schools, hospitals and the police and to preserve spending on government programmes to limit the rises of unemployment and home repossessions.

So here's my guide to :

Fiscal stimulus: There isn't one next year and there won't be one after this PBR. The government has simply not got the money. Indeed, the chancellor will be clawing back money by reversing the cut in VAT, increasing top-rate tax and whatever other tax rise he announces today.

Cuts: The argument is no longer about whether to cut. It is about how fast and how deep cuts should be. The Tories say that whatever the chancellor announces today, he's sticking to his target of cutting the deficit in half over four years, which is not enough.

Taxes: They're going up, whoever's in power. The question is how fast and who pays. Labour will insist that its tax rises are fair while the Tories are focussed on the few not the many

Pay: It will be limited, whoever is in power.

And there ends the good news.

Comments

  • Comment number 1.

    I'd like to know how much of the trumpeted "spending on schools, hospitals and the police" goes in frontline services, as opposed to funding guaranteed final-salary pensions at 60 (at 50 for the police) for the retirees from schools, hospitals and the police.

    The private sector can't carry on funding the facility for the public sector to keep their noses in the trough.



  • Comment number 2.

    I already spend about half my year working for our good old GovUK (in terms of what I have to hand over and what I get to keep)... when it gets to 51% or more overall for me, I'm off. I suspect I will not be alone.

    I have no problem with the idea that the higher earners should contribute more than the lower earners, but there MUST be limits, otherwise there is no incentive.

    At least tax exile tinpot republics don't generally do their best to take all your cash whilst simulaneously making a complete mess of everything and representing that things are actually fine or, alternatively, someone else's fault!

  • Comment number 3.

    'All the signs are that it will be another increase in National Insurance, though no-one in the Treasury will confirm that.'
    What further proof is needed?

  • Comment number 4.

    My guess for the PBR is that anything suggested will be too little too late.

    If this country was a person it would have faked it's own death by now.

  • Comment number 5.

    PMQs
    When the backroom boys and girls have gone to the trouble of providing an insulting soundbite for Brown's discussions with Cameron and have then rehearsed and schooled him in its presentation, its a shame that he hasn't the wit to find a way to fit it into one of his six answers, and has to tack it onto the end as a completely irrelevant non sequitor. Pathetic performance.

  • Comment number 6.

    Darling's mechanism on bank bonuses is quite cunning and clever. He's shaping up to be a good Chancellor, isn't he? ... better than the previous one, I'd say.

    I'm a little disappointed at the apparent lack of Income Tax rises, though, I have to admit. Ah well, maybe next time.

  • Comment number 7.

    So gordy doesn't even have to allude to questions asked anymore? He can just completely ignore them, brag about how great he is, and attack the questioner on something completely unrelated?

    Why do we even call it PMQ's anymore?

    Incidentally, wasn't thrilled with Dave on this one either. MP's expenses? Noone cares anymore. Paycut for MP's? No, can't agree thats a good idea.

    Disappointed by VAT not being upped further. Even more disappointed by the Beeb cretin who commented that going back to 17.5% is gonna hit the poorest hardest. VAT IS A TAX ON LUXURIES, IT HITS THE RICHEST HARDEST.

    I personally would like to see it go to 20%, and even higher.

  • Comment number 8.

    6. At 12:46pm on 09 Dec 2009, sagamix wrote:
    Darling's mechanism on bank bonuses is quite cunning and clever. He's shaping up to be a good Chancellor, isn't he? ... better than the previous one, I'd say.

    -----------

    I'm with you for once. Can't help but feel he'd do even better if Gordy could just let him do the job himself.

    He might not have any financial background, but at least he is sensible (relatively speaking of course), not obsessed with his own power, and does not have Brown's overwhelming and nauseating arrogance.

  • Comment number 9.

    Taxes will go up whoever is in power. But Labour will raise them on the rich whereas the Tories are handing the rich massive tax cuts. That's the difference.

  • Comment number 10.

    Pre-budget report.

    More spending but no detail on how the massive debt is to be paid off.

    Does Darling et al actually believe their own drivel.

  • Comment number 11.

    6. At 12:46pm on 09 Dec 2009, sagamix wrote:
    Darling's mechanism on bank bonuses is quite cunning and clever. He's shaping up to be a good Chancellor, isn't he? ... better than the previous one, I'd say.
    I think my parrot would be alot better than the previous Chancellor!!!!! With regards to Darlings action on bank bonuses, i hear the bankers are already jumping through loopholes.

  • Comment number 12.

    "greatHayemaker wrote:

    Even more disappointed by the Beeb cretin who commented that going back to 17.5% is gonna hit the poorest hardest. VAT IS A TAX ON LUXURIES, IT HITS THE RICHEST HARDEST.

    I personally would like to see it go to 20%, and even higher."

    Hmmm, I wouldn't consider basic clothing or fuel to drive to work as luxuries but both of which have VAT added.

  • Comment number 13.

    9. At 1:07pm on 09 Dec 2009, APbbforum wrote:
    Taxes will go up whoever is in power. But Labour will raise them on the rich whereas the Tories are handing the rich massive tax cuts. That's the difference.

    --------------

    Do you think if you say it long enough and loud enough, some really simple minded people might actually be fooled and start to believe you?

    Or are you one of those who has been fooled by the constant repetition, rather than one of those looking to do the fooling?

  • Comment number 14.

    12

    Ok, so not strictly accurate, but you get the drift. Richer people buy more vatable stuff.

    Oh, and fuel duty is not the same as VAT.

  • Comment number 15.

    "APbbforum wrote:

    Taxes will go up whoever is in power. But Labour will raise them on the rich whereas the Tories are handing the rich massive tax cuts. That's the difference."

    Congratulations on buying New Labour spin.

    Yes the Tories have secret plans to sell all poor people and use the money to buy the rich a new Porsche each.

    Somehow people believe this even though the majority of Labour tax rises will end up impacting on the majority of people (there aren't enough rich people to cover the money that they need to raise and many of the rich will actually find ways to avoid the taxes anyway)

    New Labour portray the rise in IHT as helping the rich - but ignores the fact that the majority of people it will help won't be rich (under Tory plans you will need to have an estate over a million pounds to pay IHT - so who is being taxed? The poor or the rich?). Currently many family homes would be hit by IHT which wasn't what the tax was planned for.

    And do you know the ironic thing? Labour saw the increase in popularity the Tories got after they announced the plan and decided to borrow it!

    Personally I feel that if the Tories raised the tax threshold but doubled the tax above that threshold it would actually be a much better policy and would stop Labour from targeting them as favouring the rich (although Labour will swear black is white if it will get them votes)

    Labour are such a party of the poor that they are reversing a cut that hits the poor harder than the rich (the VAT cut). They have also managed to sneak in an increase in fags, booze and fuel at the same time. These were all given a duty increase to balance out the drop in VAT - now the VAT is being reversed the duty increase will still apply! And do you want to know the best thing - we pay VAT on the duty increase as well!

    Somehow Labour are able to pull off sneaky tricks like this and there are still people who fail to notice!

  • Comment number 16.

    I am very concerned about the impacts that any change in spending or taxes will have on what is a VERY fragile state of the economy.

    Everyone in the UK has seen prices rise significantly during the past 2 years. The official figures are not borne out in the "real" world if my experience of a 15% increase in day to day expenses is true for everyone.

    With huge tax burdens already (mine was 65% in 2008) and this recent huge "real" cost of living increase, many in the UK are now unable to accommodate any more increases. I know I can't and I'm a high earner.

    If we're all in the same boat and we already have to reign in our expenditure, then any further claw-back is going to reduce spending even further. Which world does Darling inhabit that is going to grow by 1% in 2010? If he's working his figures around that, we're all in the deep stuff.

    Would the last person out, please switch off the lights!

  • Comment number 17.

    "greatHayemaker wrote:

    12

    Ok, so not strictly accurate, but you get the drift. Richer people buy more vatable stuff.

    Oh, and fuel duty is not the same as VAT."

    Have Labour taken VAT off fuel? I certainly hope so it would see a massive drop in prices when I next fill up at the pumps. Personally I doubt that they can afford to.

    Currently at the moment fuel has fuel duty added and then VAT is applied to the price of the fuel and the fuel duty!

  • Comment number 18.

    14. At 1:27pm on 09 Dec 2009, greatHayemaker wrote:
    12

    Ok, so not strictly accurate, but you get the drift. Richer people buy more vatable stuff.

    Oh, and fuel duty is not the same as VAT.

    You still have to pay VAT on fuel as well as all that fuel duty!

  • Comment number 19.

    17

    Yes, but the majority of the cost when you buy a tank of petrol is fuel duty.

    That is the point I am making.

  • Comment number 20.

    I'm sick of all my money being wasted on the so-called poor. I'm not rich and everything I have has been earned, working for someone else. I am totally fed up with my excessive taxes being used to support the weak, feckless and lazy. A bit more American, don't work-don't eat ethic would do this country good. Tax upon tax whether it's VAT of fuel duty it's irrelevant. If shops did like they do in the states and showed the prices on goods witout tax then we would all see very clearly how much we were being ripped off. Petrol at under 40p a litre anyone??

  • Comment number 21.

    "6. At 12:46pm on 09 Dec 2009, sagamix wrote:
    Darling's mechanism on bank bonuses is quite cunning and clever. He's shaping up to be a good Chancellor, isn't he? ... better than the previous one, I'd say."

    Yes its soo good that all the bank has to avoid it and pay out a bonus is to grant the staff member a tempoary pay rise!

  • Comment number 22.

    Brilliant, Darling, just brilliant!

    The 50% one off tax on banking bonuses is due to raise a mere £550m.

    We're trying to save £178bn and Darling hopes to do it by annoying an industry which underpins the whole economy whilst only recovering 0.3% of the deficit.

    Who is he trying to impress?

  • Comment number 23.

    "greatHayemaker wrote:

    17

    Yes, but the majority of the cost when you buy a tank of petrol is fuel duty.

    That is the point I am making."

    I accept that, however I was countering your point that VAT was a tax on luxuries. In some cases it is but some of the items which VAT is added to are far from luxuries.

    If you own a house and you have a hole in your roof, or your central heating breaks down in winter you pay VAT on the repairs - now I don't see that as luxuries.

  • Comment number 24.

    20. At 1:57pm on 09 Dec 2009, Breakfast-Maker wrote:
    I'm sick of all my money being wasted on the so-called poor. I'm not rich and everything I have has been earned, working for someone else. I am totally fed up with my excessive taxes being used to support the weak, feckless and lazy
    I had the same argument with my mother in law the weekend, she is one of these lazy and feckless people you mentioned and because someone called up about her nightclubbing every weekend when she is supposed to be unable to walk long distances(It wasn't me) her benifits have been suspsended and is now planning to play on the 'mental side as no one can prove it'!If they reinstate her benifits the next call will be from me!!

  • Comment number 25.

    Nick

    That was the best I have heard Osborne, who didn't waste much of his time at Darling but continuously aimed it at Brown. Who is the architect of the present Nightmare on Downing Street in Osborne's opinion.

    The system of presentation in the House is deeply flawed. Darling speaks and Osborne replies. Then Darling speaks again, but Osborne can't reply to Darling's reply. Two to one in terms of potential time. And The Liberals disappear off the radar, with the House emptying and the TV cameras largely switched off.

    I think the whole idea of the speech following PMQ's is also stupid. You go from what were important questions on Afghanistan but end (because Brown has the last word) with a Brown rant against the Tories to the Nick Clegg piece (two questions is not enough or fair given their percentage support) This was one of his best ever, but almost drowned out by the Labour rabble - he ended up shouting.

    Finally, the Speaker screwed up, but fairly because he did it to Darling and Osborne. He let them ramble on, and then, when they were both within a few words of the finishing line stopped them to remonstrate against a miscreant (difficult to pick out who it was because they all fit that description).

    PS Can we join a campaign to get our Comprehensive Spending Review before the election?

    Major Major

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