Society

Thursday

Peter Hoskin

The dangerous inheritance

Gary Duncan makes a couple of important points about borrowing in today’s Times: “If, as seems all too likely, Mr Darling’s gamble on growth fails to pay off, then the eventual peak in the Government’s borrowing could leap above £200 billion. Some authoritative forecasters believe it could soar to £230 billion, or a stunning 16 percent of national income. Worse still, even the Treasury’s own numbers suggest that about three quarters of the predicted borrowing peak of 12 percent of national income is not owing to the ‘cyclical’ ups and downs of the economy, but to more permanent, structual factors. Thus, even if strong growth does emerge, borrowing will not

James Forsyth James Forsyth

It is the spending that is the problem

Just to follow up briefly on Matt’s post, this from the end of Hamish McRae’s column today sums things up well: “No government for 30 years has sustained tax receipts above 37 per cent of GDP. Yet we are now proposing that spending rises to 48 per cent of GDP, almost as high as the mid-1970s when the IMF came in. It went to 44 per cent in the early 1990s. The electorate cannot have that level of spending, or anything like it, if it won’t pay more tax. Governments of both parties have failed to make that clear. It is almost as through they have been complicit in the

Lawrence Kay

Alistair Darling and the perfidious prediction 

In anticipation of the Budget, I wrote last week that Alistair Darling would announce an extra £1.5 billion in funding for the Flexible New Deal, the Government’s welfare-to-work programme that is the equivalent of a shiny, new, environmentally friendly car. The scheme is going to use companies to help people on Jobseeker’s Allowance who have been claiming for 12 months or more find work rather than make them keep going to their Jobcentre Plus – i.e. it is set to allow claimants to trade in their old bangers for something much improved. This is good for them, but the recession has wrecked the Government’s financial plan for the scheme.  

Allister Heath

A shameless Budget

It’s official: enterprise, hard work, education, success and aspiration are no longer valued in Britain. Yesterday’s Budget, by far the most irresponsible in recent history, marked the final death of the New Labour project, which was meant to reconcile social democratic policies with a competitive economy. From next year, anybody earning between £100,000 and £112,950 will be hit by a marginal income tax rate of 60 per cent as their personal allowance is wiped away ­ the real rate will hit 61.5 per cent with national insurance. After that, the tax rate will fall back to 40 per cent for a while ­ 41.5 per cent with the new national

Alex Massie Alex Massie

Asking More from Your Friends

There’s a good deal in David Hare’s speech to the Index on Censorship awards* with which I would disagree, but not this bit: “The principal lesson of the new century is the following: that you must condemn censorship, intimidation, bullying, coercion, torture, encroachment on human rights and illegality in your friends with exactly the same rigour you bring to its condemnation in your enemies.” And in fact, one might go further. It is precisely because we expect more from our friends than from our enemies that we must be vigilant in holding them to the standards they profess to believe in themselves. This isn’t a matter of moral equivalence, it’s

Wednesday

Martin Bright

Reserving Judgement

It is so very tempting to storm in after a Budget and make sweeping assessments. Journalists are paid to do just that but they risk being blinded by ideology or government briefings. Fraser has already decided that this was the worst Budget ever. And the front pages suggest that editors are none too happy with Alistair Darling’s “Budget for Jobs”. I think it’s probably too early to say. Remember,most people missed the significance of the removal of the 10 pence tax rate two years ago. This is the first time in four years that I haven’t had to rush into print over the Budget and that is something of a relief. It

The Spectator

Budget 2009

Here’s a selection of the Budget-related posts that have been made on Coffee House today: Coffee House live blogged Alistair Darling’s Budget statement here. Matthew d’Ancona sets out the politics of the 50p tax rate, and wonders whether any politicians will stand up for aspiration. Fraser Nelson reveals what the Treasury told lobby journalists, and sets out the top ten Brownies in the Budget. James Forsyth thinks that the 50p tax rate is a diversionary joke, and highlights the Tory line on tax. Peter Hoskin laments Alistair Darling’s dodgy forecasts, and says that Labour’s debt crisis has become a catastrophe. Lloyd Evans watches David Cameron lay into the Government of

James Forsyth James Forsyth

A front page monstering for the Budget

Jeremy Paxman has just rattled through the front pages and they are all bad news for Labour. The Daily Mail’s headline is the rather droll ‘Alistair in wonderland’. The Telegraph blasts ‘The return of class war’. The Guardian’s has ‘Darling’s great squeeze’. The FT’s is ‘Darling gambles on growth’. The Sun lists the bad economic news and has a headline about how ‘At least it’s sunny’; appropriately it is meant to rain this Sunday. The Times has the wonderful double—or is it triple—entendre, ‘Red all over’. The Independent highlights the breach of Labour’s manifesto promise not to change income tax rates with the line ‘That’s rich!’.  The Daily Express’s front

James Forsyth James Forsyth

Brown can’t get an agreement on expenses

Besides the Budget, there’s been another important political development today: the failure of Brown to achieve a consensus among the party leaders on reform of MPs’ expenses. This is hardly surprising since Brown issued his proposals yesterday without consulting Cameron or Clegg. All parties have tended to be cautious about making too much politically out of the various expenses scandal. Sadly no party is confident that all its MPs are clean. Tory supporters should remember that if David Davis had won the leadership, Derek Conway would almost certainly have been chief whip when his abuses became public. But Cameron comments after the meeting (courtesy of the BBC) were surprisingly punchy. “No

Alex Massie Alex Massie

Are the SNP even more deluded than Labour? Why, yes, they are!

Scottish public spending has essentially doubled (albeit in absolute terms) since Labour came to power. (To what end, you ask? To very little end, I reply.) Now the British government has run out of money and it is obvious that there are going to have to be spending cuts if the public finances are ever going to be restored to some semblance of stability. This is obvious, I should say, to everyone but the SNP for whom any suggestion that it might be possible to cut even a tiny sliver of cash from the Scottish Government’s £35bn kitty is the vilest sort of anti-Scottish treachery. Then again, the Nationalists aren’t

Mark Wallace

Budget 2009: The Budget nasties come to light

Today’s Budget was never going to be a good one for taxpayers. With the recession exacerbated by a Government wedded to high spending; shooting for a record debt level; and unwilling or unable to admit that there is such a thing as public sector waste, the question for many was simply “How bad is it going to be?” Unfortunately, the closer one looks, the worse the answer seems. The TPA’s research team have been looking into different aspects of the Budget this afternoon to both put the Budget’s own figures into context and to investigate some of the small print of the Government’s plans. Predictably, more than a few Budget

Norman Lamont

Budget 2009: The Red Book doesn’t put the public finances on a sustainable path

Today’s Budget was horrendously historic in terms of the borrowing it sets out.  But even the huge numbers getting bandied around could still prove to be underestimates.  The Treasury’s growth figures for 2011 and beyond are stylistic at best – and, if you look back to the recession of the early 90s, the biggest borrowing increases came after the recession was over, in 1993. Despite the fast-deteriorating public finances, the Government still hasn’t spelled out what they’re going to do to get their coffers back in shape.  Even allowing for those fanciful forecasts, their “efficiency measures” will get us back to a deficit of 5 percent of GDP in 2013-14. 

Fergus Mcghee

Why Britain will have the world’s 4th largest top tax rate

Anyone arriving at Heathrow airport will see those HSBC adverts comparing the top rate of tax in various countries. The message is that HSBC knows the world, but the advert works because that airport is used by the world’s rich to hop between country to country, wondering where is best to live, work and declare taxes. The top rate of tax is a powerful symbol, as it tells what that particular country’s attitude to wealth creators. After April next year, only three countries on the planet will have greater top rates of tax than Britain – Denmark, Sweden and the Netherlands. Here is a selected list of the rest, as

James Forsyth James Forsyth

The Tory line on tax

The Tories have just released their Budget briefing. It includes this statement: Our priority is to avoid Labour’s tax rises that affect the many not the few, like the increase in National Insurance which is a tax on everyone who earns over £20,000 This echoes Phillip Hammond’s remarks straight after the Budget. But it is important to stress that it does not mean that the Tories are accepting the 50p rate. What it does mean is that the Tories will prioritise—both in political and policy terms—stopping the increase in the tax on jobs. This strikes me as sensible politics and not a surrender.

Matthew Dancona

Politicians against aspiration

James is right about the 50p tax increase being a diversionary tactic: its fiscal value is marginal, given the colossal debt figures that even the Government concedes are on their way. So what is the political content of this tax hike? After the Budget speech, Yvette Cooper told the BBC that the tax system had to “not only be fair, but seen to be fair.” This was a huge admission of socialist intent dressed up as a noble principle: the Chief Secretary to the Treasury declaring that the symbolism of taxes matters as much as the money they actually raise. In this case, the symbolism of the measure is unambiguous.

Daniel Hannan

Budget 2009: Darling is interested in headlines, not economic recovery

The figures have now become literally unimaginable. Britain will borrow £175 billion this year, £173 billion the year after—a higher total in two years than in the entirety of the 316 years since King William introduced the national debt. It’s hardly surprising, in the circumstances, that people snatch at the more comprehensible numbers, notably the hikes in higher rate tax. It’s a classic piece of Brownite prestigiditation. Higher levies on those earning more than £100,000 or £150,000 a year will generate little revenue. Indeed, they will probably cost more to administer fthan they raise: wealthy people, in order to avoid the new rate of income tax, will also start avoiding capital gains

James Forsyth James Forsyth

The Tories should step around the 50p tax trap

The 50p rate is a political measure not a fiscal one. In government terms it will raise peanuts. It is designed to stoke up Labour’s base and to split the Tories. Brown will be delighting at the bind it has put the Tories in. If they oppose it, Labour will try and paint them as friends of the rich etc. But if they accept it, they’ll be letting Labour get away with an attack on wealth creation that will leave the country worse off. On 45p, the Tories have neither endorsed nor rejected the proposal but instead tried to walk around the trap. It is tempting to say they should