The budget wasn’t bad, let’s be honest, we could expect worse from a Labour Chancellor. Here’s the Taxpayer’s Alliance’s view on the budget:
Here’s a quick summary of the TPA’s thoughts on today’s Budget…
As predicted, Brown’s Budget Speech did nothing to address the long-term political and economic challenges facing Britain. (You can see the BBC’s “at-a-glance” report here.)
For a start, Brown ignored the warnings by Britain’s leading business organisations that his increase in tax and regulation are making it more difficult to compete in the modern world. There was no reduction in corporation tax and no commitment to reducing the tax burden overall. The British tax burden is set to overtake the tax burden of Germany, widely viewed as one of the weakest in the EU in recent years. Britain has fallen down the league tables of international competitiveness in recent years and there was no sign from Brown that he is concerned about this. Despite his rhetoric about dealing with global economic challenges, the reality is that his Budget ignored key drivers of competitiveness.
Digby Jones, Director General of the CBI, was right to say, “business will be disappointed that the opportunity truly to improve UK competitiveness has been lost. UK firms have watched while other countries have reduced business taxes to help their companies compete in this era of globalisation. Yet the UK continues to do the opposite.”
Brown was right to stress the importance of education to competing in the future. However, despite Brown’s rhetoric about improving education, all he actually did was to pledge to increase spending within existing structures. Comically - and this should make everyone concerned about Brown’s ability to manage the country in an increasingly competitive environment - he said “with China and India turning out not just 4 million graduates a year to Britain’s 400,000, but also more computer scientists, more engineers, and more technicians, we can no longer afford to write off the talent or waste the potential of any young person. So the Secretary of State for Education is announcing today, that those who have missed out on their first chance in education, will have a second chance to make the best of themselves. We are today setting aside resources so that up to the age of 25, further education all the way up to the scale to A-level standards will be free of charge.”
So Brown’s response to the challenge from cutting-edge economies in Asia is to allow more British people to do our increasingly discredited A Levels. The real answer to improving schools is, of course, removing politicians from the management of schools (and public services generally) so that we do not see more initiatives like this which can only get in the way of progress.
Brown also failed to acknowledge the fact that his massive tax rises are hurting ordinary families across Britain. Whilst he made various changes to child tax credit - the sort of thing he is obsessed with - there was no pledge to reduce the overall tax burden on families. Also, pensioners groups understandably reacted with anger that Brown failed to repeat last year’s rebate of £200 from the council tax bills of pensioner households - despite the fact that council tax has risen again. Age Concern have said that his refusal “beggars belief”. Ordinary people will therefore continue to struggle on for another year at least with a huge tax burden which continually goes up.
In conclusion, Brown’s Budget was high on gimmicks - we heard about special taxes on 4X4s, annual “schools Olympics”, #2m for evening sports clubs, summer schools for entrepreneurs etc - but low on meaningful reforms to make Britain fit for the 21st Century. It was a classic MP’s Budget - one more concerned with short-term positioning to fit in with the obsessions of Westminster MPs and journalists than with genuinely preparing Britain for the serious challenges it faces.
You can read the TPA’s real-time Budget analysis - which featured on conservativehome.com - here.
You can read the TPA’s initial Budget Response here.
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