Wednesday, March 21, 2007

If You Thought This Was a Tax Cutting Budget, Think Again

My friends at the Taxpayers' Alliance seemed to have gone all gooey at Gordon's supposed Tax cuts. Maybe they need to look at The Business, which says...
"The net effects of all his tax policies is a tiny reduction in Mr Brown’s
net position to the tune of £525m for 2007-08 but an increase in the tax burden
of £280m in 2008-09 and £125m in 2009-10. On balance, therefore, and for all
Brown’s bluster, this was a tax raising Budget."


Anonymous said...

Brown's tax trickery delivered with a cheap pantomime-style flourish has been rumbled already and will rebound on him badly.

He shot himself in the foot today.

Anonymous said...

Dave stood up and said it was a tax cutting budget.
What a prick.
He didn't notice the 10p band going.
Thick as....

The Military Wing Of The BBC said...

Bullshit baffles brains.

The tax hikes are most likely found in the "adjustments to NI bands"

The fact that even now its very difficult to work out the implications of this budget point to the deceit that is at the heart of zanu-labour and Brown's supposed "intellect". I have a feeling he just doesn't understand any of this - he just pretends to.

Anonymous said...

According to the FT website, the 20% tax rate comes in in April 2008 and the 10% tax rate isn't being abolished until April 2009.

Is this difference in timing correct?

If so, everyone will benefit in financial year 2008/9, just in time for an election in May 2009.

Low earners only lose out from FY 2009/10.

Anonymous said...

You always have to wait until the day after with Brown's Budgets - the Devil is in the detail, and no doubt he will have clawed back plenty in the small print. National Insurance is indeed one area I expect we will really need to get to get to grips with.

On the face of it, this budget has not cut tax - merely tinkered with the tax bands. But in the process it has removed a level of protection for those I have some of the greatest regard for - those who work (rather than sit on their arses waiting for handouts), but earn very little by doing so. This budget looks to be a real kick in the teeth for them - and I hope he gets called out on it.

Anonymous said...

Do Conservatives avoid 'hard sums'? There I was, thinking that £405 million was less than £525 million. Silly me!

Anonymous said...

Has anyone else noticed how closely Gerry Sutcliffe resembles the Coronation Street spiv, Mike Baldwin?

The Military Wing Of The BBC said...

Nick Robinson
"A Chancellor with so little to spend"


I rather suspect that Nick Robinson understands all this just as well as Gordon Brown.

Anonymous said...

wonderful. fund tax cuts for the better off with increases in tax on the lowest wage earners - and thus trap more people in the "tax credit" state dependency system.

utterly vile, evil,despicable and Stalinist.

somebody really needs to start banging the low tax drum very very loudly.

corporation tax in the UK only reduced to 28% - when Ireland, right next door, and English speaking, its only 12.5%

The Military Wing Of The BBC said...

900 m extra pounds from "adjustment" to exemptions for empty business properties from business rates.

This must hurt charity shops - I'm pretty sure they may benefit from some sort of relief when they operate from a shop that would otherwise be empty.

The Military Wing Of The BBC said...

Small business tax rate (on profits less than 100k) increases from 20% to 22%.

+ decrease in 2nd and subsequent years capital allowances to 20% (from 40%).

This will sharply increase tax paid by smaller companies.

Anonymous said...

Sorry Iain, Brown's outthunked you on this one.

No matter what you say, and no matter what the facts are, the headlines will be favourable to him.

Anonymous said...

anon 10.19,

No matter what you say, and no matter what the facts are, the headlines will be favourable to him.

Not sure whether you can get this into your limited Alistair Campbell, everything is spin frame of reference, but "favourable headlines" do not trump the reality - that a slice of hard-working people today saw their tax go from 10p to 20p. Those people will ultimately help write the headlines - the morning after the next election. And they are not going to be "favourable".

Anonymous said...

"Perception is Reality".

If tomorrow's papers mention the words 'tax' and 'cut' in any combo or permutation in the headlines in a majority of papers, then Gordon's work is done. The reality will not kick in for months [or in the case of some of the changes, years] by which time 'El Gordo' will be Prime Minister.

Love him or loathe him, you have to admire his chutzpah and the fact he is a sharp, shrewd, smart cookie.

Anonymous said...

"Only the little people pay taxes" was what Leona Helmsley said. Obviously she has a fervid disciple in the Labour Chancellor of the Exchequer.

She was convicted.

Anonymous said...

Tone made me do it - he's a bad influence said...

This will sharply increase tax paid by smaller companies.

Too right it will. What a b....rd. Broon has reduced taxes for his corporate giant donors, his cronies, and raised it for those of us that can least afford it. Just at the time too when SME profits have been decimated by rising costs under Broon and nulab and the by huge competitive advantages they've given to the giants.

Yet, branch by branch, SMEs are hugely more efficient than the giants.

Thanks, Mr Broon, you've crushed the crucial small business sector once again.

Over 99% of businesses, most SMEs, the businesses on whom almost 60% of UK jobs depend, will be hit by this swingeing tax rise.

Auntie Flo'

uk-events said...

Just another con from New Labour.

Pointless budget for most of us.

Stephen Timms has been getting his gormless mug all over the place recently.

Someone really should tell him to get a decent haircut.

As for Brown. Well, Iain doesn't like the 'c' word so i won't use it.

Anonymous said...

This is nothing short of a reverse Robin Hood budget

Anonymous said...

What is shocking is the increase in Education Spending to £74 billion - no doubt uncapped Tuition Fees are on the way.

There has been no attempt to bring Health & Education spending to heel or to control Network Rail and its off-sheet debt - nor any proper funding of the Army, nor making battlefield pay tax-free.

Anonymous said...

Anonymous@9.32 said... "Do Conservatives avoid 'hard sums'? There I was, thinking that £405 million was less than £525 million. Silly me!"

The £525million is only right if you index duty rises.
The announcement that fuel duty will rise by 2p in October is recorded as a £380million tax cut, even though it will bring in an extra £480million in revenue.
The changes in duty on alcohol are recoorded as a tax cut of £20million - even though they will bring in an extra £210million to the Exchequer during the financial year.

The £525million includes money that the Treasury were expecting to be able to get but will not be. The actual net figure for 2007/8 is £130million, which is less than the amounts that this budget will raise through higher taxes in 2008/9 and 2009/10

Gavin said...

John Hayward, yep, that is the metaphor which came to my mind also. I have produced a chart here showing precisely how this budget will impact low earners. Disgraceful.

Anonymous said...

Stephen Timms has been getting his gormless mug all over the place recently.

Stephen Timms aka "Plug" from the Bash Street Kids

Scroll down for the picture. Can you spot him, children?

Anonymous said...

"No matter what you say, and no matter what the facts are, the headlines will be favourable to him."

the newspaper headlines (just saw them on newsnight) for tommorow morning - except for the Sun - are entirely unfavourable. the guardian being neutral.

everyone is pretty much seen through the spin. if this is the best we can expect from his LAST budget, then god help us all when he gets into no.10

Anonymous said...

Brown has been rumbled. Most of the headlines in tomorrow's papers are referring to him as a trickster who has tried to con the electorate.

He gambled and he's lost. Tant pis.

Anonymous said...

"you have to admire his chutzpah and the fact he is a sharp, shrewd, smart cookie."

theres nothing smart or shrewd about raising taxes for the lower paid - thus bringing even more people into tax credit depedency culture - and raising corporation tax for smaller businesses, when Eastern Europe and Ireland have been slashing corporation tax.

the smart and shrewd thing to do , in todays global world , would be to REDUCE all taxes, thereby increasing economic activity and thus INCREASING the flow of revenue into the Treasury. on current trends , Britain's tax take is going to hit 40 per cent of GDP soon.

Gordon Brown is not "smart" or "shrewd" - he's just old fashioned dumb ass socialism. He'll be announcing a 500 per cent increase in tractor production in the Urals next.

Richard Bailey said...

Anonymong / New Labour Press Officer 10.19pm.
Just seen headlines on Newsnight - I counted 3 favourable (Guardian, Sun, Mirror) and at least 6 against. Times sat pathetically on the fence.
Bad luck.

If I can adapt the much loved phrase "marry in haste, repent at leisure" to this Budget, I would say "cut in haste, pay at leisure".

This Budget and indeed the political activity of the last few days, provides all the evidence you need that Cameron is now running the country.

Cameron leads on environment, Gordon turns green. Cameron leads a Doctors rally, Gordon (& Tony) hold tortuous press conference on public services. Cameron looks for tax cuts, Gordon delivers - but just to out flank Cameron.

Gordon's mistake is that everything he is currently doing is designed to destroy Cameron. He can't help himself. He is the ultimate class warrior.

The trouble is that twisting and turning to outwit Cameron is a world apart from leading the country and his obsession will be seen for what it is.

I admire your loyalty, Paul, but even you must smart at some of the things he has and will do to win the votes of posh middle England. He is betraying his principals, the poorest in society and his supporters, but Gordon's "destiny" is more important than good or principalled leadership.

Admirable Chancellor - disastrous Prime Minister in waiting.

uk-events said...

>Stephen Timms aka "Plug" from the Bash Street Kids

Marquee Mark - Superb!

I knew I'd seen him before!

Best post I've read in ages!

pommygranate said...

The BBC love it! Compare and contrast the reader's comment they choose to feature on their main page with the actual readers' comments on their Have Your Say forum.

Truly breathaking, even for the BBC.

Anonymous said...

What a performance. OJ would have been proud of him. This is the budget speech I've just watched and lip read.

Before my eyes Broon morphed into a preacher, standing like his father at the lectern in the kirk, his, gnawed ( self flagellated?), ever so humble, hands at prayer. Yet no amount of training could keep the old arrogance and pride down, and the praying hands soon trembled and ricocheted like machine guns - smoking guns - ones with a lifetime of old guilt and scores to settle.

The discomforting business of Broon gaping and gasping for air was still there too. As the speech progressed, his words hurtled more and more breathlessly into each other and the speech gathered ever more incomprehensible, break neck speed. Though he's worked hard to control this problem, the more charged with the delicious excitement of power Broon becomes, the more orgasmic his speech becomes and the more it runs away with him.

As if he'd been tutored not to point, not to punch or bang his clunking fists, and not to expose his other unfortunate tendencies, Broon repeatedly transformed his machine gun paws into grandma's rocking chair hands. Hands folded high against his chest, he stood, like an old lady standing outside the Bastille, suppressing cackles as the guillotine clunks a neck. If he did this rocking chair hands business once, he did it scores of times. The effect was every bit as distasteful and just as revealing of the man's psyche as his thumping fists were. I'd stick to my clunking fists, if I were you, Mr Broon.

All the while, his tortured body language belied his boastful words.

Did you notice the fetishistic ritual with the despatch box? Time and again, Broon lovingly touched, caressed and stroked his notes and the looooong sides of the despatch box. He might not have vocalised his excitement as, 'mine, all mine, yes, yes, YES', but those horrible caresses told me all I needed or wanted to know. It was a chilling enough performance before, but then he began pulling on his tie.

What sort of internal war can it be that tears this strangely tortured man apart?

Is it as the Guardian once wrote of OJ? The performance is so convincing, until it jars on you and loses all credibility, it's as if 'there are two OJ's and they just don't talk to each other'

Auntie Flo'

The Military Wing Of The BBC said...

Brown's "major package of reforms to the corporate tax system" include:
The introduction of a new Annual Investment Allowance (AIA) of £50,000 for all businesses who invest to grow.

(from page 4 of the budget book overview.)

What the fuck does that mean?

That businesses that invest to shrink won't qualify?

I just can't be arsed to investigate these AIAs in the full budget book - there'll be a fraudsters dream and a businessman's joke. Why doesn't the BBC investigate this total Bollocks that this trat writes every year rather than do its normal thing of asking people sitting in a pub what they think.

Does Brown have any idea what businesses that "invest to grow" do?

Anonymous said...

So a Chancellor announces a tax increasing budget - so what's new??!!

Daniel said...

It's good that the Taxpayers Alliance is making some appreciative noises. This is a great opportunity to show they're not just a conservative mouthpiece and they should sieze it whatever the merits of the budget overall.

Anonymous said...

George Osborne's posted a first response over at Webcameron - A tax con, not a tax cut. It'll be interesting to see a more thorough analysis when the bean counters have run their magnifying glasses over the small print.

Vienna Woods said...

I'm much more concerned about the Cameron clan's reaction compared to what the tricky Mr Brown had to say. The only thing that 'The Three Stooges' had planned to do was to crack embarrassingly silly jokes like some night club comedian that suddenly drys up and doesn't know what else to say to encourage a laugh! Sad to say, this is exactly what I expected to happen to this inept Tory leadership who seem only able to conjure up inane policies instead of getting to grips with what really matters. It rather reminds me of my childhood when my mother was trying to force feed me sprouts, saying "Eat it up, it's good for you". I didn't like the bloody things then and I don't like them now either. Brown maybe a characterless zombie, but he's a sharp player behind that piggy facade. He's far too sharp for the boy wonder, and always will be!

Anonymous said...

Be honest Iain, Brown outwitted the always poor "Tax neutral Tory" Cameroon approach.

The only losers in this budget are those who either already hate Brown and will never vote Tory (small bus entrepreneurs) and those who hate the Tories so will vote Brown anyway (low paid singles).

Cynical, political bribe to the middle earning floating voters, but effective all the same.

The fear now? What tax cut is Brown scraping funds together for in order to win the general election?

Any cut is obviously more than nothing, and nothing is the best the "tax neutral tory" approach can offer.

Anonymous said...

Cameron's speech was about a lot more than "cracking jokes".

He brought up the issues Brown prefers to sweep under the carpet like: the collapse in productivity, the record public and private debt, the collapse in the savings ratio, the growing black hole in the public finances, and the record and growing trade deficit.

All these things will impact more thoroughly on us all than Brown's sleight of hand over tax.

The economy is in grave danger of stagflation but Brown hopes to be safely out of the Treasury by then.

Sceptical Steve said...

I'm all for fiscal and monetary stability, but it's a bit rich for the Chancellor to use the financial year 2008/9 to spin his positive headlines.

Surely Parliament is only approving the budget for 2007/8, so what credence are we supposed to give to the plans for later years, by which time a new Chancellor will be in place?

As for the negative comments about the Conservative response, my understanding was that the immediate response by the Leader of the Opposition was traditionally restricted to a bit of knock-about banter, because no-one (least of all those in the Chamber) had a proper chance to analyse the detail of the budget.

The Budget response must be the most difficult speaking role for a leader of the Opposition and I thought Dave did okay.

Anonymous said...


"Any cut is obviously more than nothing, and nothing is the best the "tax neutral tory" approach can offer."

Except, of course, Brown isn't cutting tax, he's raising it.

Quote below from Hamish McRae in today's Indy.

Look at the numbers; not at the words. This is such a basic rule of how to understand Gordon Brown Budgets, the golden rule I suppose you could call it, but he is so accomplished in his presentation that it needs repeating every time. There is a second golden rule too, which is that the full import of what he has done only becomes apparent a few days, maybe even weeks, after the event. Meanwhile however, let's see what his own numbers say about his Budget.

Start with tax. The headlines are that corporation tax is being cut from 30 per cent to 28 per cent and the basic rate of income tax from 22 per cent to 20 per cent. Now the numbers. The Budget papers are hugely complicated but within the great wodge of bumf there are pearls of clarity. One is a table in the Financial Statement and Budget Report on page 285. This is the nerdy report that gives the detail of the country's finances, as opposed to the main Economic and Fiscal Strategy Report and the speech itself, which attract most of the coverage.

This little table shows what has been happening, and what is projected to happen, to the various different tax revenues as a percentage of GDP. Take income tax. Last year the yield was equivalent to 10.9 per cent of GDP and this year, the tax year that ends in a couple of weeks' time, it will be up to 11.3 per cent of GDP. In the coming year, it is projected to go up to 11.4 per cent of GDP and the year after, when the next tax regime starts, it goes up a bit further, to 11.5 per cent of GDP. So you see, despite the cut in the headline rate, the total tax take rises both absolutely and proportionately.

Now look at corporation tax. The tax changes are billed as being revenue neutral but here the corresponding figures of revenue as a percentage of GDP and excluding North Sea revenues are: 2.8 per cent, 2.9 per cent, 3.2 per cent and 3.2 per cent. So again, notwithstanding the headline business-friendly move, the total tax burden is rising and is projected to rise further.

To point this out is not necessarily to attack the decision to increase taxes. If you are going to do that there is a good case for getting the tax from existing big taxes rather than creating lots of new little ones. The point is simply that the headline rate on those two headline taxes is going down but the tax take is going up.

Anonymous said...

"It's the biggest change to the tax system in twenty years." - Bullshit Brown.

What I find most interesting is linking the NI to the 40% tax band. It kind-of-means a 30% tax rate and a 40% tax rate.

He may be laying down the idea of scrapping NI to Blinky Balls - and the political implications that follow from that.

Anonymous said...


We all know he hasn't cut tax *overall* and is shifting stuff around, but the consequence is a cut in income tax for middle earners, as championed by the TPA, and that is what non politicos will see.

Clever. Cynical, yes, but clever.

Tax cuts could well be back on the table for political parties to fight over, and that can only be a good thing for taxpayers.

Anonymous said...

I suppose it will be a day or two before the truth about the 2p tax cut comes out, but according to the calculations in The Times, I shall be worse off next year, due to the rise in NI contributions, combined with the abolition of the lower threshold.

I appear to have been shafted.

Anonymous said...

It would appear from Tom Tyler's revealing chart (above) that if you earn only £7500 a year, a level of income where it could be argued you should not be paying tax at all, from April 2008 you'll be paying about £170 a year MORE. It is immoral to take even more money from the poorest in society. Not only that, it's stupidly counterproductive. Is this the way to encourage the long term unemployed back to work?

Anonymous said...

It is immoral to take even more money from the poorest in society

Are you looking at the full income stream of the poorest, including tax credits etc, or are you just playing a partisan game?

Brown clearly stated that the poorest will not be worse off overall, when all income is taken into account, not looking at income taxin isolation.

He might be lying, but you don't help your case by looking at income tax alone.

Anonymous said...

I’ve never been completely convinced of Blair’s „New Economy“ experiment and even less enthusiastic about “Globalisation” either. Blair and Brown always endorsed the idea that Globalisation would have most of us playing with computers and that in a square mile of central London all our fortunes would be made. Manufacturing was of no interest and the service-industry would look after the worker bees! Stuff permanent, pensionable jobs for the masses and let the Chinese and Indians make everything for us. It’s all going arse up now of course as the white collar jobs are also being exported and an idiotic immigration policy has resulted in half a million Poles snatching our skilled engineering jobs, leaving some of our skilled workers working part time stocking supermarket shelves. Of course New Labour have made a huge mistake in embracing this policy without thinking it through first and the decimation of manufacturing industry in the UK during their tenure is going to come back and haunt them, or the follow-on government, be it New Labour, or Conservative. I believe that social unrest and problems within the family have much to do with job satisfaction and security. Many young people do not see a future worth having, particularly those with no particular educational prowess, and they are entirely frustrated with their lot.

Now Mr Cameron, Sir, please consider the short term wealth that New Labour has achieved and balance that against the irreparable damage that has been done along the way and tell the people what they need to hear. Forget riding bikes, propellers on the roof and your bio-products…..just do something!

The Military Wing Of The BBC said...

vjavelin said...

It kind-of-means a 30% tax rate and a 40% tax rate.

NI is 11% and 1% on everything abobe 33k, increasing to 37k.

So mainstream marginal tax rates are 31% and 41%.

The £75/w increase in the upper earnings limit will cost everbody earning more than 37k, £429/year.

For (hopefully) one year only, a lucky few will have a marginal rate of tax of 51% on an £800 slice of their income.

The Military Wing Of The BBC said...

This £400 year vehicle tax on large vehicles will kill off land rover as a going concern.

The BBC keeps repeating that anybody buying a £60K Range Rover won't care about "just" £400. But long term this will make depreciation on such cars eye-wateringly expensive.

Its the 6-10 year old car market that won't like to pay £400/year tax, so completely fucking the re-sale value of cars made by the last major "design and build" car company based in the UK.

Well done Mr Brown- you really understand industry don't you?

Can you imagine the French doing this to a part of the car industry that France is strong in?

The Military Wing Of The BBC said...
This comment has been removed by the author.
The Military Wing Of The BBC said...


Is any one else finding the word verification process getting more boring?

The code is getting longer and the valid window time shorter.

Me thinks Zanu-Labour is to blame.

Anonymous said...

"corporation tax in the UK only reduced to 28% - when Ireland, right next door, and English speaking, its only 12.5% "

The Irish are a bunch of cunts aren't they? They've been robbing us blind via the EU for decades and now they are stealing inward investment by undercutting our tax regime. Time for another Battle of the Boyne if you ask me.