Wednesday, 21 March 2012

What a disaster

That was a pretty pathetic budget - and Ed gave a pretty impressive speech afterwards.

One small point really riled me though; and that was on the 50p tax rate.

The Chancellor gave part of his reasoning for reducing the tax on the rich to be that the 50p didn't bring in as much as was expected - in fact, only a third of what was originally expected. Partly, this was because people chose to retrospectively claim their earnings. Is he really so stupid in that he can't see that is only going to be a problem for the first year of such a measure? And also, that now removing the 50p, we will once again lose a load of the income because people will claim their income a year late?

But wait - it's only going to cost us 100 million quid a year - so that's alright! We don't need that kind of money - we've got loads as it is, and it's not like we're cutting budgets in real terms for universities, schools, the NHS, Aim Higher, Sure Start... oh whoops. Yes we are. Still, what's £100mill between (millionaire) friends?

Because the point is, the Chancellor has told us that the rich will still pay more (5 times more in fact). Some might do, that's true; and people with expensive houses certainly will. But if we're all in this together, and we allegedly are, surely we should be looking at increasing the total amount of money we take in, rather than fiddling around, increasing some and reducing other amounts from the rich. If we can get more money in, then we should be doing that - and not cutting 50p in the meantime. It's a bad message, and yes that is ideological; but it is also working in that it bring in £100mill a year, and it's removal is entirely ideological. It doesn't put business off - there's no evidence for that - and it does increase our annual tax takings.

The rise in personal allowance of course is a good thing - but it doesn't do much to help the squeezed middle who still aren't helped by this change, and are losing tax credits. And neither does it help the pensioners who will be paying more tax in real terms.

The budget was full of some good things and some bad. But the bad things really are disastrous, and this could well be the beginning of the end for compassionate (and intellectually sound) conservatism.

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