Political Budget weakens pound
Darling prepares the electoral battleground
Yesterday’s Financial Statement from the Chancellor Alistair Darling bore all the hallmarks of Gordon Brown’s premiership, it had the Prime Ministers grubby finger prints all over it and little or no attempt was made to reduce the massive burden of debt that thirteen years of Labour government has heaped upon the British people. This was an empty budget a missed opportunity to start putting things right, a chance to reintroduce “prudence” (one of Brown’s old girlfriends who must now be out of favour), but instead Darling did as was expected, the Prime Minister’s bidding, and laid out the ground for an election that will most likely be called at the end of next week.
This was a nakedly political Budget where the Chancellor and the PM spent most of the afternoon trailing tired statistics chronicling the thirteen years of Labour’s misdeeds and with a forecast of a minuscule reduction of £11bn in the budget, deficit they had the temerity to trumpet it as a success! The current deficit of £178bn is now forecast to be reduced to just £167bn, and as far as the national debt was concerned it appears as though they are quite willing to continue to allow it to rise. From a base of £352bn when Gordon Brown presented his first budget in 1997 it is now forecast to rise to £1.4trillion by 2014/15, an amount that equates to over £23000 for every person in the UK.
It is you and I and every ordinary Joe in Britain who will pay dearly for the thirteen wasted years of Brown’s stewardship of the economy and it all starts today, the usual victims will start to pay more almost immediately, smokers, drinkers, and motorists, and from next week we can add in the council tax payers who have seen their bills more than double under the life of this government. The reintroduction of the 17.5% VAT rate is now starting to hit us all in the wallets and shortly there will be an increase in National Insurance contributions (they can say what they like, this is a tax increase and it will curtail growth because it taxes jobs.) Because Darling confirmed that personal tax allowances will remain frozen, as inflation rises, all earners above the minimum threshold will find themselves giving a larger slice of their pay packet to the Treasury, another Labour tax rise hidden from view!
In a blatantly political move designed to draw dividing lines between Labour and the Conservatives Darling announced, on Brown’s behalf, that a 5% rate of Stamp Duty on properties worth more than £1m would be used to finance the removal of Stamp Duty on properties worth up to £250.000, this was meant to be a “Robin Hood” theft of the rich, but with the economy still asleep the likely cache of revenue is not going to be as large as he imagines and the property market is not exactly booming is it? On top of that, Labour’s “light touch” regulation of the financial sector in previous years has created a situation where first time buyers are now finding it wretchedly difficult to even raise the deposit on a property before facing the problems of finding a lender prepared to finance the mortgage following the disastrous propping up of Northern Rock and the other “zombie banks”, and just to give us all a huge laugh Brown and Darling now want to force banks (i.e. the failing ones that they bought on behalf of the tax payers) to lend to those who are not in the best positions to fulfil their obligations, isn’t this how we got into the mess in the first place?
Luckily David Cameron and the Conservatives saw this bear trap in advance and will not be planning to reverse the stamp duty measures, they can see a political ploy when it is being played, and another such ploy brought out yesterday was the tax exchange deal announced with Belize in a purely political dig at the Tories and Lord Ashcroft, of course no such exchange deals were announced about countries sheltering the profits of Labour’s multi millionaire donors such as Lord Paul!
So we can see now that Brown plans to fight the election on a faux tribal class battlefield in an us against them toffs strategy, I say faux because hidden in the detail of the budget is the fact that it is the people at the lowest end of the economic ladder who will pick up the bill for Brown’s fight, as usual.
They play with our lives and livelihoods and obfuscate, dither, and put off the big decisions that the country needs now, the glaring hole in the budget is the comprehensive lack of a comprehensive spending review, it is not something which they wish to even contemplate as politics gets in the way. The spending review has been postponed until after the election, or to put it as I have before, a huge mess for the next government to sort out.
In a nutshell, this was a Chancellor opening the cupboard to show us that it’s bare, the only contents are a few faded battle plans dusted down from the 1970s, a time when another Labour government ran out of money and Dennis Healey ran cap in hand to the IMF to bail out Britain, yet now Brown’s debt mountain is inexorably higher than it was then, it is far higher than that amassed during the Second World War and that took over sixty years to pay off.
It is true, Labour governments always run out of cash, they are poor stewards of our economy and are always the authors of their own obituaries.
This election cannot come soon enough, Blair and Brown inherited a healthy Britain but years of increasing spending and increasing debt have destroyed our future, we need change and not just a change in management, a change in policy and philosophy and a return to the values of good housekeeping, we need a government that acts and behaves in the same way as responsible housewives looking after every penny and deciding wisely what is and what is not good value for money. The Conservative Party urgently needs to talk about it’s philosophy, values, and vision for a complete change, the narrowing in the opinion polls reflects the fact that voters cannot arguably see this change and that they perceive David Cameron to be as much of a marketing phenomenon as Tony Blair was in 1997. More of the same in a different wrapper is not what we need, Cameron iterated yesterday that we need to “sack the manager”, well that’s fine, but only if the new manager has a completely different set of values and principles and real vision about where he/she is going, a change in the style of doing things would be no use at all, we need a complete change in direction!
Busted Britain needs the Conservative Party to wake up, take the fight to Labour in an effort to show that they do know how to change the direction of the economy, and to be able to hit the ground running, they need to demonstrate that they know how to stop the haemorrhage of the nation’s cash and resources, as even now the value of the pound is being affected by Darling’s budget as money men give it a big thumbs down, and they need to show a strong will and spirit to roll up their sleeves with a “can do” attitude. They need to show that they can once again roll back the frontiers of the state and give a chance for the free private sector of the economy to grow and flourish and produce, only then will we see a growth in jobs, prosperity, and security.