In what is being billed as Chacellor Brown's final Budget (he is expected, unfortunately, to be our next Prime Minister in the near future) he announced a series of fine-sounding tax giveaways. When I first heard the summary reports of what he had said, just shortly after he had finished his Budget speech, I was as usual left with the (false) impression of - 'Oh, that's not too bad!' - because of course what was being reported was the cut of 2p in the basic rate of income tax, together with the 2p reduction in Corporation Tax. However, at the back of my mind I asked myself how, exactly, was all this to be paid for? This government has being running very large deficits in recent years and has also been responsible for a dramatic rise in government borrowing, all to pay for the huge increase in state hand-outs Brown has presided over.
As expected it was not long before a cursory scrutiny of the details of his Budget revealed that there were less obvious factors, which the Chancellor had cannily not announced in his speech, which more than neturalise the effect of some of his headline 'giveaways', for example the reduction in 2p in basic income tax is [possibly more than] neutralised by the abolition of the 10 per cent starting band rate for income tax! Against the drop in Corporation Tax for companies of 2p must be considered the rise in tax for small companies from 20p to 22p. I have no doubt that, in coming days, further detailed analysis of this Budget will reveal more that the Chancellor was curiously silent about during his speech.
As usual the Chancellor promises further 'efficiency savings' of 3 per cent which supposedly will release funds sufficient to increase spending on 'front-line services' by GBP26bn a year by 2010/11. In my view this is 'code' for saying that bribes for votes to the proletariat are to be increased yet again; the citizen is now simply the 'client' of the State, not the master, even if constantly increasing transfers from the productive parts of the economy to the government's likely voters are necessary to keep the present crowd of shysters in power. One really does wonder just how gullible the average Labour voter is!