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
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.
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