Thursday, March 22, 2007

Its always 'Smoke and Mirrors'.

Media crammed full of budget analysis today - much of it as mysterious as a Prescott dissertation on endogenous growth theory. One thing really bugs me. I wish people wouldn't talk about 'Gordon's money. Its 'our' money which Gordo plays his monopoly games with.

Now, in general, I condemn this budget (an opening line which will please our press officer) because it continues the relentless increase in the overall tax take which has been such a feature of the last 10 years. The remorseless creation of a client state rolls on. And independent experts tell us that public spending, as a proportion of national income has grown from 37% to 45% - or thereabouts. No wonder the UK falls down the international productivity league.

The two announcements in the budget which could this blog's eye were the personal tax changes and the 'Chelsea tractor' tax. I'm content to see a very un-Brown-like simplification of the income tax regime - even if I'm not content with how Gordo's done it. Scrapping the 10p rate by, in effect, doubling it to 20p will hit low income earners. My personal preference would have been to use the £8 billion to raise the threshold rather than cut the basic rate - taking millions out of the income tax system altogether. But Gordo put his one day headline ahead of helping the poorest people. No surprise there. That's New Labour for you.

I suspect that we all knew that the Chelsea tractor was going to be clobbered - and I would have no problem with this except that it hits Powys tractors as well (and I do not own any before you ask). And I am deeply critical that this a huge tax increase rather than the green tax 'switch' which I could have supported. Brown's usual tricks are on display here. Licences for Band G vehicles go up to £400 per annum - while for Band B vehicles fall to just £35 per annum. A green tax switch? Oh no, its not. Because Band D is as wide as the Mississippi and Band B is like a prostate restricted dribble. The change grabs £44 million for the Treasury over the next 2 years. Its no wonder we are all so cynical about new green taxes.

Political commentators are asking what Gordo will do when Cameron trounces him at the next election. Well, what about trying selling smoke and mirrors.


Anonymous said...

"My personal preference would have been to use the £8 million"

Uh, that's eight billion, Glyn.

Weren't you the Tory finance spokesperson?

Glyn Davies AM said...

Thanks. Slip of the finger. Now corrected.

Dylan Jones-Evans said...

Glyn - see the first poll judgement on the budget (, which shows the Conservatives extending their lead after the budget.

It will be interesting to see what the rest of the polls over the weekend will show.

It would seem that the so-called Brown 'bounce' has been has effective as dropping a blancmange from the top of the Assembly building.

Glyn Davies AM said...

The effect would depend on whose head the blancmange landed upon!

The problem with Brown is the dishonesty of the presentation. He tried to give the impression that it was a tax cutting budget - but it was no such thing. He just can't help it. Its no wonder voters feel conned.

I really do think he's going to be a big flop as PM.