Darling leaves a lot of room for the Tories
Peter Hoskin 5:19pm
Now that's what I call a damp squib. There was very little in today's PBR that wasn't trailed over the weekend, and most of the new things were - of course - tax rises that Number 10 was hardly ever going to trumpet. In fact, for all of the pre-report debate over unfunded tax cuts, Brown and Darling have delivered a Budget which represents the worst of all possible worlds - net tax hikes coupled with massive borrowing. The announced tax increases of around £40 billion were more than double the stimulus package of around £20 billion. Whilst national debt could well be tipped over £1 trillion.
Of course, it should normally be little surprise that taxes will be increased later to cover borrowing now. But this is Gordon Brown we're talking about. It wouldn't have been past him to use the borrowing to fund an even bigger stimulus package; one that would have pushed this Pre-Budget Report into the tax-cutting bracket - at least so far as surface appearances are concerned. That he didn't, leads one to suspect that the Treasury won out in the battle of wills that was being reported last week.
All this leaves a great deal of room for the Tories to manoeuvre. Brown's been banging on about how important a fiscal stimulus is to the economy, and how unfunded tax cuts are the way forward during this downturn. By his own measures, he's hardly delivered - whilst the "tax bombshell" and the "borrowing binge" are now firmly out in the open. George Osborne did a great job hammering both, particularly when highlighting what the hike in national insurance contributions will mean for this country's workers. For the first time during this downturn, one senses that the Tory economic message has been given a boost - rather than being overshadowed - by Brown's disingenuous narrative. Cameron and Osborne now need to seize this opportunity.
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carol42
November 24th, 2008 6:02pm Report this commentMore like tax timebomb primed to go off when the ekection is over.
Short the UK
November 24th, 2008 6:18pm Report this commentThe deleveraging is gathering pace:
~Finance.
~Consumer.
~Business Capex (balance sheet).
This is a wicked triple whammy that will blow Darling's budget to smithereens.
Brown is now at the mercy of the markets and they are moving so quickly that he will soon be made to look powerless. He has now spent his political capital.
Gordon Musgo
November 24th, 2008 6:20pm Report this commentHere's hoping the press are going to pile into this tomorrow. Where's the stimulus? Where's the always-mentioned but never delivered 'help for small businesses'?
Nothing here but debt and misery.
jennywren
November 24th, 2008 6:23pm Report this commentGeorge Osborne did really well, thinking on his feet and sounding on top of things.
The future is frightening however and I know who I would prefer to be in charge...and it isn't the lot that got us into all this.
James T
November 24th, 2008 6:28pm Report this commentThe most striking thing is not today's "giveaway" but the extent to which Darling has revised the forecasts downwards. The tax take for next year will now be £70 billion less than forecast just six months ago. Even allowing for £16bn tax cuts, that's more than a £50bn hole in the public finances, or over 10% of forecast HMRC receipts. How can they have got the numbers so wrong?
Reg
November 24th, 2008 6:33pm Report this commentGoodbye Gordon.
C Powell
November 24th, 2008 6:57pm Report this commentNo stimulus just tax-raising: National Insurance / taking the personal allowance away from 2010 / a new super-high rate of tax / increases in duty on petrol & tobacco set against some piffling fiddling about with VAT which will make little or no difference.
And if this doesn't work - and my guess is that it won't, what then?
kinglear
November 24th, 2008 6:58pm Report this commentGot the numbers wrong? shurely not. Of course, the UK Government has been in total denial about the problems for over a year ( unless you mean telling us it's all those chappies in America wot did it) so its hardly a surprise they took no account of a (predicted) huge drop in tax take - not least because all the people who were supposed to pay their half yearly taxes in July suddenyl discovered they were making a huge loss, and therefore didn't need to make any payment, and er actually want some of the previously paid tax back. Oh, and er, noone knew the price of oil would drop.....
seb
November 24th, 2008 8:08pm Report this commentCountering silly Michael White on the televsion this evening, Fraser summed up the extent of the disaster with a word that will soon be the by-word for what is about to happen - tsunami. Brown and Darling have strapped dynamite to the bridge prior to galloping to the far side of the river where the plunger is. Who seriously believes these two either want, or expect, to win the next election? The safest bet for either would be to apply for police protection, plastic surgery and changed identities. Both will need it shortly.
mark c
November 24th, 2008 8:30pm Report this commenti dont think anyone realises just how long it will take to repair this .. if it is repairable on any sort of timtetable anyone alive today will live to see ...the one staggering number was that we will have borrowed twice what Churchill needed for a world war (at todays values), and all of it to achieve nothing but reverse gear on pretty much all policy fronts.
still, theres some straightforward no nonsense messages to play against Gordons spin .. more debt repayments than defense spending for a start, £1 trillion for another, tax up and borrowing up in tandem.... how easy do George and Dave need it to be ??
luke
November 24th, 2008 9:49pm Report this commentJames T, its the economic downturn combined with the 40Bn you lose from the collapse of the city
Its why borrowing is inevitable if you arent going to raise taxes or cut spending
alastair harris
November 24th, 2008 10:18pm Report this commentthe giveaway is a red herring - designed to hide the full extent of the disaster Darling told us about today
Andy Leeds
November 24th, 2008 10:46pm Report this commentAll the numbers are knitted porridge. I have no doubt whatsoever that the £118 billion will be wrong, just as the tax take projection was wrong merely 6 months ago.
Gordon the Moron and the ghastly Darling have sat there too long for any good they have been doing. Be gone I say, let us have done with you. In the name of God GO.
RODEST
November 24th, 2008 11:20pm Report this commentDid anyone notice the Darling con-trick? He stated that pensioners would be given an extra £50 on top of the £10 christmas bonus; this would come into effect in January, Hmmm some christmas present.
These measures are more likely to send us further into recession than create any recovery during 2009. Is this some kind of a white flag from Brown? Will he call an early election so that somebody else can take on his problems?
The Tories can now drip feed their plans for recovery because Brown can't claim them, he's lost his chance to get the wealth earners behind him.
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