In his speech this lunchtime Cameron made four key announcements...
He also said...
• Abolishing income tax on savings for everyone on the basic rate of tax
• Raising the tax allowance for pensioners by £2,000
• Publishing reports, for consultation, on green tech incubators and the green environmental market
• Undertaking a full-scale review of the creative industries
Instead of Labour doing nothing effective they should take up our idea of a self-financing National Loan Guarantee Scheme to help businesses get through these tough times and help keep people in work. It’s now been over five weeks since we proposed this. Five weeks in which more businesses have gone to the wall – and more jobs have been lost. Five weeks in which Labour have done nothing. The Government could and should take that action now, today.Just as a reminder, these are some of the other Conservative initiatives to ameliorate the effects of the recession...
* freeze council tax for two yearsJust thought you'd like to know.
* abolish Stamp Duty for nine out of ten first-time buyers
* provide tax cuts for new jobs with a £2.6bn package of tax breaks to get people into work, funded by money that would otherwise go on unemployment benefit
* cut the main rate of corporation tax to 25p and the small companies' rate to 20p, paid for by scrapping complex reliefs and allowances
* introduce a £50bn National Loan Guarantee Scheme to underwrite bank lending to businesses and get credit flowing again
* give small and medium-sized businesses a six-month VAT holiday, funded by a 7.5% interest rate on delayed payments
* cut National Insurance by 1% for six months for firms with fewer than five employees, paid for from the above changes to the company tax regime
UPDATE: I've also written on this subject for CommentIsFree.
31 comments:
Why not just publish all the press release?
Seems like only yesterday we were being promised no unfunded tax cuts.
Wonder what he'll come up with next week?
I wonder whatever did happen to that nice Mr. Osborne.
It's funded by cuts in non-essential areas of spending, Jimmy.
And as for 'unfunded' - paying for tax cuts by borrowing is by its very nature an unfunded gesture.
"It's funded by cuts in non-essential areas of spending, Jimmy."
Of course they are. Silly of me not to have guessed.
Iain,
The two year 'freeze' on council tax is not anything of the sort. The parameters set out to councils for them to qualify for central Government help is so hard to meet that zero councils will actually freeze rates.
This is actually a vote winner. Never did seem right taxing savings that have already been taxed in the first place. The tax free ISAs always seem to pay less interest than other savings accounts.
Raising the pensioners tax allowance by £2,000 will also be well received.Excellent stuff.
Expect a counter attack from Brown
I still don't like the council tax freeze, as it stinks of central control and big government.
Local councils should be free to set whatever they want and face the voters in the council elections.
"cut the main rate of corporation tax to 25p and the small companies' rate to 20p, paid for by scrapping complex reliefs and allowances"
Well that's not a saving then. It is a transfer of savings from compabnies that claim a lot of those "complex reliefs and allowances" to those who do not. Those "complex reliefs and allowances" are typically reliefs and allowances for one or other form of capital investment. So the industrial companies that employ a wide variety of labour will suffer while the PR firms and life insurance companies will benefit. What is the point?
"The Tories said that spending on health, education, defence and international development would rise in line with Labour's existing plans. But the rate of spending growth in other departments would fall from 4.1% to 1%.
"Officials said that the party would set out at a later date how this could be achieved without hitting frontline services." [grauniad]
Anyone else here holding their breath? I know I am.
has anyone worked out how many billions Brown has lost on UK bank shares so far?
He is borrowing 10% of GDP this year (GBP 157 billion), and depends on an economic revival to reduce that next.
He could be borrowing GBP 1 trillion if the recovery evaporates, a sum he won't be able to borrow at any rate of interest.
Brown didn't do nothing over the last twelve years. He spent every penny we had and blew away billions that we didn't have to boot.
Try saying the word PRUDENCE without smiling or laughing out loud.
Sweet and Tender Hooligan said...
Iain,
The two year 'freeze' on council tax is not anything of the sort. The parameters set out to councils for them to qualify for central Government help is so hard to meet that zero councils will actually freeze rates.
----
I can name you one council that would have qualify for the rate freeze in the next round of Council Tax increases if there was a Conservative Government now - Conservative controlled Forest of Dean District Council is proposing a 2.5% rise. The Conservative controlled Gloucestershire County Council is proposing a 2.9% rise, so not too far off either.
The tax on savings, but never on debt has always been unjust.
This move will be very popular as it will be seen a just.
As will cutting back wasteful public spending and reducing the role of the parasitic state (Jimmy).
Goebbels-like???
I know that blogs are devaluing the currency of hyperbole and lowering the threshold of offence, but really....
The problems with this are:
A. Scope
1. 60% of pensioners are out of tax on this anyway
2. Ditto other poorer savers
3. Mid range savers - pensioner or otherwise - can use loads of tax efficient products up to pretty generous limits
4. The main benefits for this fall on the richest part of the "basic rate" range, already helped with swingeing cuts in mortgage repayments etc
B. Funding
Funded by SLASH in Public Services in areas which may not be as sexy as NHS and Education (though I noticed Nadine had those areas up for grabs in her NY message) but which would mostly be made with cuts to jobs or services for the poorest elements.
In short this is a very regressive tax, albeit within the minimum rate range.
very regressive tax ... cut that should have been
it's for the fairly well-to-do ... who we ought to be encouraging to spend, spend, spend
Honest reporting from the Pakistan Daily
In other words - cut taxes. Well hoo-bloody-ray, supply side economics lives. And about time too. Cut taxes and you get wealth creation. Especially if you cut taxes on income, investments and private business. Tax and spend and you get wealth destruction.
This does nothing for me, I save a lot because I don't have a public sector pension and am not on the basic rate of tax so am going to still be paying out on my saving income as the Tories gleefully highlight.
Why is it based on your tax rate and not the amount you have in savings?
Hasn't won my vote. In fact the line:
Abolishing income tax on savings for everyone on the basic rate of tax (with top rate taxpayers continuing to pay the same)
Annoys me greatly.
...and you cannot have unfunded tax cuts. It's illogical. How can the government have unfunded income? It can have unfunded spending - which it has had for 11 years.
Tax 'cuts' are the State deciding not to confiscate our money. It is our money not the States.
So, what the tax 'cuts' (if that is what they are) will mean that the State has less money to spend. Good. It spends money very badly. The State'll have to save money somewhere (everywhere?). Good again.
Has there ever been any UK Government that saved billions by 'cutting waste'? It's the political equivalent of fat people saying they are big boned.
I would actually be happier if they just said "we're making spending cuts"
"Jimmy - I assume you are a supporter of the government...maybe even a Labourite."
Damn, my cover's blown.
Two points: firstly "unfunded" and "funded in a manner of which I dispprove" are not the same thing. Secondly, Mr. Osborne, before his recent tragic disappearance, made great play of his refusal to countenance any such thing.
Excellent Tory policies.
I totally disagree with taxing interest on savings less than other income.
And I totally disagree with pampering the elderly.
But at least Cameron is creating some clear blue water.
"And I totally disagree with pampering the elderly"
He's got to throw in something for the members.
The Labour Party are the deliver nothing party!
Expect McBroon and the Prince of Darkness to rubbish these proposals. IMO they seem to relish the pillaging of prudent and responsible savers if that helps bail out the reckless debt junkies.
Since inflation is way ahead of current interest rates, what little savings most people have is being rapidly devalued - but isn't that what Labour did in the '70s?
All very well, but this afternoon I heard Osbourne explaining carefully on radio that there would be no tax REDUCTION, merely a reduction in the INCREASE Labour plans from £ 30 billion to £ 25 billion.
Wtf ? How never-learn Labour dare to plan increases under the present state of affairs is one thing, but for the Tories to in effect support this, merely tinkering beyond the edges, is incredible.
Don't know the exact figures, but we are all fighting Labour so we can spend per annum £ 5 billion less out of what, £ 650 billion ?
Fergeddit.
Alan Douglas
wv : offorts (useless expenditure of energy, as in example above)
Now at last we are getting some sensible and useful policies. I'm very positive about these ideas. I expect desperate noo Labour to nick them.
Trivia fans may be interested to know that Osborne has described this imaginary tax cut as "fully-funded" in his Evening Hitler article. A google news search shows that the phrase was quoted in the Daily and Evening Hitler news stories, but if you click through you find this somewhat tendentious (to put it mildly) boast has been mysteriously redacted. Could they have started fact-checking after all these years?
I think Cameron's proposal on the tax on savings is a good one. I have been wondering which of the parties would go for something like this and I think it will be very popular, especially amongst older people.
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