Monday, November 24, 2008
4.38. Darling, needless to say, doesn't make any attempt to answer Osborne's points.
4.37. Ends with three questions. Really strong performance from George Osborne.
4.36. The State should live within the country's means.
4.33. Warns against following path of Japan which endured a decade of stagnation. Quotes Jim Callaghan: "You can't spend your way out of a recession".
That is exactly the right point. Japan was leading the world until it went into a decade & a half of zero growth.
4.32. Can't disguise the huge tax rises which are on their way for millions of families. £4 billion tax increase through NI. £100m more for NHS wage bill. £2 bn for British business. Precision guided missile at the heart of economic recovery.
4.31. German and French governments have ruled out cut in VAT. Borrowing money for a temporary cut and telling people their taxes will go up to pay for it is not much of a stimulus.
4.30. Half measures he announced were compensating people for 10p tax con. Then tries to withdraw measures he had announced before. Not much new.
4.30. Why is recession going to be worse here than everywhere else? Quotes IMF, European Commission.
4.29. Nonsense to say America is to blame. No American politician said they had rewritten the laws of economic.
4.28. Like a gambler who can't give up, thinks he can borrow his way out of debt.
4.27. All about the political cycle, not the economic cycle. Borrowing figures on a scale never before heard in the Commons. Double what was forecast just 8 months ago.
4.26. Giving away £20 billion and taking back £40bn including a tax on Middle Britain - an increase in NI. All Labour governments run out of money and all Labour governments bring the country to the verge of bankruptcy.
4.26. Osborne. Straight in with an attack. Accuse Darling of not admitting debt will be now £1 trillion. Decade of responsibility initiated by the PM.
4.23. Child benefit increase will come in three months early, and so will pensioners. January, not April.
Is that clearing the deck for a March or early April election?
4.22. Pensioners: pension credit goes up to £130 for couple - above indexation. Biggest increase since 2003., State pensions will go up in line with inflation.
No real effect
4.20. Increase in child tax credit payments from April 2009.
4.19. Will go ahead with new car banding. Will phase in though. 2009 duty rates will only rise by £5. 2010 differential will come in. More polluting cars only by £30 not £90.
4.15.Increased mortgage insurance cover to £200,000.
Tiny4.13. Need to boost mortgage market. Repossession should be last resort. Lenders agreed to wait 3 months before instigating repossession orders. £15m of free debt advice.
£15 million wasted4.09. £100 million more for energy insulation.
4.03. Will defer corp tax hike for small firms.
4.00. Small business. Temporary increase for empty property relief - under £15,000 rateable value exempt. HMRC will enable firms to spread tax payments for as long as they need. Exemption for foreign dividends in 2009.
3.58. Increasing petrol and alcohol duties to offset VAT cut.
I agree with this in principle. Petrol prices are falling faster than the £ is & taxing alcohol generally has a positive social effect & is thus better than VAT. However the VAT cut is till the end of 2009 (so 2009 election then) but the increase seems to be permanent.
3.57. Will tax most those who have done best out of last decade. 45p tax band for those earning more than £150,000 from April 2011. NI going up by 0.5% for all earners. NI will start at income tax threshold. No one under £20,000 will pay NI. From April 2010 incomes £100-£140,000 will get their allowance reduced.
3.56. Increase in tax allowances will be permanent - and increase from £120 to £145.
3.54. Need to put money into economy now. Best way is to cut VAT from 17.5% to 15% until the end of 2009. Will come into effect on 1 Dec. Will return to 17.5% at beginning of 2010. Equivalent to £12.5bn gift to consumers. Retailers should pass it on as soon as they can. Will encourage spending and boost growth.
3.53. Bring forward infrastructure investment plans. £3bn will be brought forward from 2010 ti this year and next. Motorway capacity, social housing, build schools and energy efficiency.
3.52. Spending will increasee by 1.2% in real terms.
They don'tlearn do they. Note this is for a year when the total GNP is declining.
3.51. Spending was £584 bn last year. Since 2004 £26.5 bn of efficiency savings. Will now find an additional £5 bn in 2010-11.
the 1997 budget was £293.5 bn - with 31% inflation that would be £384 bn so exactly £200 million up then. Think what could be done with that money
3.49. Sharp increases in debt relative to GDP. 41% of GDP this year then 48-53-57% in 2013-14. Wow.
3.47. 35% reduction in Corporation Tax from finance sector. Borrowing will be significantly higher than forecast. Rise to £78 bn this year and £118 next year. From 2010 will reduce to £105bn, £87bn, £70bn, £54bn and then in 2016 only borrowing to invest.
GNP is £1400 bn & total borrowing forecasr is £512bn so that is 36% of GNP plus interest.
3.46. Debt will start falling by 2015-16. Asked NAO to audit Treasury's analysis of cyclical fiscal position.
Yes & we will have cut carbon by 80% in 2050. I doubt if he expects to be PM in 2015 either
3.45. "Significantly lower tax revenues in the medium term". Is abandoning existing fiscal rules. Setting a temporary operating rule. Whatever that means.
Means kite the cheques & hope
3.44. "Will do whatever it takes to support people through these difficult times". "Substantial fiscal loosening - £20 billion fiscal loosening between now and April 2010 - 1% of GDP".
Means kite the cheques & hope
3.43. Growth 1.5-2% for 2010, he says.
So recession through 2009
3. 39. "Because of size of our financial sector we will be more affected than others".
3.37. "UK economy faces this situation from a position of relative strength" Outrage on Tory benches. Darling then recites list of economic achievement. "We did fix the many roofs that needed fixing".
3.35 "Must make regulatory supervision more effective". Effectively saying nothing to do with us guv. Fingering Isle of Man and Channel Islands governments for lax banking regulation. British taxpayer cannot be guarantor of last resort, he says. He's set up a review.
When government regulation doesn't work the statist default position is more regulation.
3.33. "Unprecedented global crisis". "Root of today's problems are in the global financial systems".
Says must restore and maintain financial stability. Causes of instability are global.
No - the root is we have given up productivity to the BRIC countries, imposing ever more regulation on any working industry & ever more taxes to feed a bloated state sector, while fooling ourselves that we can get wealthy by selling our houses to each other.
3.32. "Crisis began in America, as America itself has said". Didn't cause our borrowing, PSBR problems though, did it?
In the same way that the previous "boom" came from America.Not quite true in either case
3.30. Here we go. "Economic uncertainties not seen for a generation". You can say that again. "Ensure sound finances so we can live within our means". He kept a straight face. "Slowdown will be shallower and shorter than would have been the case without these actions.
But it will only be shallower because we borrow 36% of a year's GNP - taxes & growth will be affected for years.
The final result is that we are going to see unproductive government becoming a yet bigger part of the economy & destructive regulation expand as well. National debt is going to increase massively by £512 bn plus interest & that absolutely nothing is being done to make any part of the economy more productive. It is all playing with money (& grabbing more of it for government). Not even a nod to the ideas I put forward on Nov 21st which would certainly work if tried.