Wednesday, 16 December 2009

Final PMQs of the decade

The final PMQs of the year and the decade passed off in a rather bizarre and agreeable mood earlier today. Harriet Harman was in the driving seat for the government, as the PM is currently in Copenhagen for the climate change summit.

William Hague deputised for Cameron and failed to land any blows with his attacks on the Lizny arrest warrant, ineffective sanctions against Iran and the House rising early for Christmas. He also offered support for the climate change summit. Harman, whilst remaining in control also failed to impress today.

Vince Cable led with a question about tax evasion and asked for an ammendment to the Constitutional Reform Bill to ensure non-doms could not sit in parliament, citing Lord Ashcroft as an example. Harman agreed and said the government would bring forward legislation to deal with the issue. Overall an entirely forgettable session today.

This blog will return in the New Year, seasons greetings from PSA. 

Wednesday, 9 December 2009

Pre-Budget Report 2009

The PBR as expected read like a manifesto, in an attempt to exploit perceived Conservative weaknesses on the economy. As expected the Chancellor outlined a super tax on bankers’ bonuses, he also decided to freeze inheritance tax allowance at £325,000 for the next year and outlined measures against offshore accounts. 
Other headline measures included:
  • The chancellor confirmed that VAT is going back up on 1 January to 17.5%, but says he has no other announcements on VAT. This may surprise some commentators who had suspected it could go up further.
  • Confirmation too that the 1p rise in corporation tax is being postponed.
  • From next month no-one under-24 needs to be unemployed for longer than 6 months before being guaranteed work
  • Basic state pension to rise in April and a cut in Bingo Duty
  • Child benefit and disability benefit to rise by 1.5% in April.
  • Forecasts: Growth return this quarter. 2009/10 growth minus 4.75%. Next year 1.5%, 2011 on 3.5% i.e. not much change
  • Chancellor revised provision for any potential impact from financial interventions on the public finances from £50bn to around £10bn
  • Public Sector Net Borrowing - forecast next year £176bn which as a share of GDP will be 12%
  • Inflation will rise to three per cent, the Chancellor predicts, partly because of the VAT reintroduction
  • National Insurance to rise by a further 0.5% from April 2011 on incomes over £20k
Political reaction:
The shadow Chancellor - George Osbourne MP
"We were promised a pre-budget report and what we got was a pre-election report - they have lost all the moral authority to government today.
National insurance is a tax increase worth £40bn, he says, adding that Darling has confirmed that “all Labour governments bring the country to the verge of bankruptcy”.
He also accused Darling of "setting one part of country against another" and "turning his back" on enterprise.
Liberal Democrat  Economic Spokesperson – Vince Cable MP
He questioned the Chancellor’s assumption that Britain would return to growth in 2009.
"What we needed was a national economic plan and what we have got is an election manifesto." "The economy is now being rebuilt on sand. The only real sign of recovery we have are rising house prices and booming bank profits, at a time when industry is continuing to decline."

Thursday, 3 December 2009

Pre-Budget Report Preview

Next week the Chancellor will set out his final Pre-Budget report before the next general election.

In it he will hope to define the Labour government as the only party that can ensure economic recovery, and drive a wedge of economic policy between Labour and the Conservatives.

The economic plan will need to ensure Britain’s economy is nurtured back into growth coupled reducing the public deficit will have to be cautiously balanced with ‘gifts’ to the electorate.

In what will no doubt be dubbed a bold PBR, we know this from leaks thus far:

• VAT will return to the 17.5% level
• Income tax and national insurance look set to be increased
• New ‘green’ taxes are expected
• Measures to ensure continued growth of low carbon sectors is certain

It will be interesting to see how many of the Chancellor’s measures are tabled for introduction before the General election.