The Budget

Wednesday, 21st March 2007 at 15:32 UTC 3 comments

Well, I expect I’m not the only person in the blogosphere right now sat writing an analysis of Gordon Brown’s tome of economic policy changes.  I apologise for relying, as ever, on a BBC account of the event.   Part 1, the environment and income tax…

The Environment

Did I expect a Green Budget?  No.  Did I get one? No.  Excuse the pessimism but really, when will these words about cutting carbon emissions turn into real taxation-based disincentives to polluters?  The only good news is that high-polluting vehicles are being almost priced off the road, except for the fact that, for most drivers of Hummers, £300 is probably not that much.

What I want to complain about here is the carrot and stick attitude being taken with cars: lowest polluting vehicles now cost £35 to road tax.  Think about this; “high polluting cars are bad and low polluting cars are good”.  Shouldn’t the message be clearer?  “Low polluting cars are bad and high polluting cars are unacceptable”!  Sorry Mr Brown, but technology cannot save us; we need real social change that includes the rejection of car culture.  And fuel duty is, inflation aside, effectively remaining the same, if not lower (up 2p next to inflation of 2.8p).

Air passengers are getting it easiest in this budget: nothing new to stop people flying.  Once again, the car lobby gets away with murder while the air lobby gets away with massacre.  We desperately need VAT on air tickets and air fuel; sadly its not happening any time soon.  Still Landfill tax is up and most zero carbon homes will not incur stamp duty.

The rainforests of Africa are fairing well: £50million across 10 countries to defend them.  Perhaps its more preferable to save African rainforest than it is to save Brazilian  rainforest.  Sadly, this doesn’t surprise me. The government remains quiet on the effects of logging and loss of tribal land in Brazil as President Lula continues to implement neo-liberalism by the back door.  While this money is welcome, its curious as to why we’re saving only the second largest rainforest and not the first largest as well.

Tax Cuts

For once I want to echo David Cameron in his condemnation of tax cuts in this highly politically sensitive budget.  “Hi, I’m Mr Brown, I cut your tax, you vote for me”.  You can always see an election coming when there’s tax cuts, and this certainly no different.  If it turns out they have to be reversed next year, never mind, Brown will be elected.

What’s shocking is the claim that doing away with the 10% rate for earnings between £4k and £10k will have little real effect when put alongside the basic rate cut from 22p to 20p.  This is utter rubbish, and a complete betrayal of real Labour values.  Brown is basically penalising anyone who earns, for whatever reason, less than minimum wage * 40 hours a week.

If I worked 35 hours a week on minimum wage (= £187.25 x 52 = £9,737), my tax bill, allowing £4.5k of untaxed earnings will rise from £523.70/year to £1,047.4/year.  The £10/week tax rise may not sound like much, but when you earn £160/week, every penny counts.

This is an attack which will be felt most by young people in less-than-full-time jobs geared to the under skilled.  I think, though I might be wrong on this, that this will affect over half of all Starbucks staff in the UK. Underemployment is a big issue, and this does nothing to help the situation.

But hey, those who pay inheritance tax are getting a promise of increasingly high thresholds, saving them hundreds of pounds.  Thanks Mr Brown, its clear what kind of party you want to represent, and it clearly isn’t one that works for the poor.

More later…


Entry filed under: Economics, Environment, Politics, Workers.

Me? Defending Free Trade? The Budget: Part 2

3 Comments Add your own

  • 1. Betty  |  Thursday, 22nd March 2007 at 11:26 UTC

    ‘ I worked 35 hours a week on minimum wage (= £187.25 x 52 = £9,737), my tax bill, allowing £4.5k of untaxed earnings will rise from £523.70/year to £1,047.4/year’

    I don’t want to rubbish your maths, but the tax free allowance is £5030

  • 2. Graham Martin  |  Thursday, 22nd March 2007 at 15:10 UTC

    Oooops, and that will teach me to go check figures like that. I’m sure it was £4500 at one point, but I guess a nicer Mr Brown must have raised it. The tax bill rises from £470.70 to £941.40; still £9 a week, and still a fair amount of money for low income folks.

  • 3. Betty  |  Saturday, 24th March 2007 at 11:39 UTC

    And of course we have no way knowing what it will be in April 2008. And we don’t know exactly what extra working tax credits will be avaliable. But surely it would be so much easier to work, get paid, then pay tax, rather than work, get paid, pay tax, fill in a form, get assessed, get extra money, then find out that it was calculated wrong and have to pay it all back.


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