Saturday, March 26, 2011
Osborne got the Politics right- it's the Economics bit which worries me
Osborne has been very astute in dripping in the really tough changes bit by bit so that consumers came to accept them, even if with ill grace. What have we accepted in this way? Well here's the list:
a) public spending will be cut by £81bn over four years entailing: the loss of half a million public sector jobs; the raising of pension ages; cutting of housing benefit; and increases in rail fares.
b) Raising VAT to 20% is the biggest single taxation hit on our finances.
c) child benefit is frozen and will be withdrawn from higher earners as of April 2013.
d) national insurance will rise to 12% 6th April and some three quarters of a million people will become higher rate income tax payers when the limit is lowered to £42,475.
Journalist Patrick Collinson suggests George might have substituted the following cheery message for his one hour speech which caused Ken Clarke to fall asleep:
"There's no money left, so we have to raise taxes. But only the working and middle classes really pay up, so we've also raised VAT, and now we're going to hit you with more income tax, although we're calling it national insurance in the hope you won't notice. There's also 1p off a litre of unleaded from tonight, and a small bung on your income tax, but not for another year. Fight among yourselves over the fact that we're whipping child benefit and tax credits away from some of the slightly better-off among you. See you next year, got to go and close some schools, hospitals and libraries. Bye."
Edward Balls has at last explained how he is absolutely totally not to blame for any of the complete screwups committed while he was "helping" The Clunking Fist at the Treasury.
It seems that CF was too impatient to let poor EB actually finish a complete sentence, and would effectively put his own words into his adviser's mouth.
It went like this.
EB: "Sell the Gold? That's a f-f-f-f-f-f-f-f-f-f-f-f-f-f-f-f-ffff-f
CF:"Fantastic Idea! Right, we'll do it!!"
EB: "Ramp up spending to record levels? That would be realy st-st-st-st-st-st-st-st-st
CF: "Stupendous! Let's get cracking!"
I think you can get the drift.
To be continued........
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