I do not often comment on the economy and fiscal matters, instead tending to concentrate on moral issues, treasonous politicians and the rising police state among other matters, but things are looking dodgy, economically, so here goes.
After Chancellor Alistair Darling’s pre-Budget report, Shadow Chancellor George Osborne today declared that Britain was on the verge of bankruptcy and that we were sitting on a “huge unexploded tax bombshell” and heading towards a £1 trillion national debt.
The Government is allegedly trying to shore up the economy with a reduction in VAT from 17½% to 15% (the lowest rate our EU masters allow) which means a 2.17% price discount if retailers pass on the saving, but most food is zero-rated and the Chancellor is raising tobacco and alcohol duties to offset the cut in VAT. This ‘initiative’ will obviously not reduce rents, mortgages or Council Tax.
Perhaps the best hope is that pound shops will turn into 98p shops, but only until the end of next year when VAT returns to 17½%, by which time Darling expects a “recovery to be underway”.
Analysis from the advisory firm Deloitte calculated that the lower rate would knock just 53p off a typical £50 shopping basket, because most food items do not attract VAT. Daniel Lyons, Indirect Tax Partner at Deloitte, said: “It is difficult to see how this measure is going to encourage increased spending when the amount of money being saved by the consumer is likely to be so small.”
From 2010, the wealthiest 1% of earners will pay 45% income tax over £150,000 and National Insurance contributions will rise a percent, split between employer and employee and will adversely affect those on over £20,000 a year.
This extra tax revenue is a pittance compared to the government borrowing forecast: more than £400 billion over the next five years. According to The Times, ‘the total stock of accumulated Government debt will peak at 57 per cent of GDP in 2013/14. Under Mr Brown’s old rules, debt was supposed to remain below 40 per cent’.
Despite the global recession, a lot of blame lies with Blair and Brown because the attitude of “no more boom or bust” is not only arrogant but irresponsible. There have always been lean times and always will be. Joseph saved the Egyptians from ruin by planning seven years in advance. New Labour have had over eleven years and what have they got but a limp-wristed attempt to knock 2% off some of our shopping items and the borrowing of hundreds of billions of pounds.
If Joseph had tried this con in Egypt, I can imagine his reward: a pair of concrete shoes and a short shaduf ride into the Nile.