Afternoon:
9°c
Osborne: Santa giveaway ... paid for by taxes for life
Paul Waugh, Deputy Political Editor24 Nov 2008
BRITAIN'S national debt will soar to one trillion pounds, leaving millions of people facing tax rises lasting their lifetime, shadow chancellor George Osborne claimed today.
He launched a stinging attack on Gordon Brown and Chancellor Alistair Darling's bid to spend their way out of a painful and deep recession.
“The Chancellor has just announced the largest amount of borrowing ever undertaken by a British government in the history of this country,” he told MPs.
“What he did not admit is that he is going to double the national debt to one trillion pounds. And that a national debt that has accumulated over centuries he is going to double in just five years.”
He blamed the huge extra spending on “Labour's decade of irresponsibility initiated by this Prime Minister”.
He added: “And to pay for it he has placed a huge unexploded tax bombshell timed to go off underneath the future economic recovery… Stability has gone out of the window. Prudence is dead. Labour has done it again. Massive borrowing. Rising unemployment. Tax giveaways for Christmas paid for by tax rises for life.”
As the Prime Minister and the Chancellor embarked on the biggest gamble of their careers, tax returned with a vengeance as the dominant political issue.
More than 16 years since the Tories clinched the 1992 general election on the back of their “tax bombshell” campaign against Neil Kinnock, Mr Osborne and Tory leader David Cameron are hoping to capitalise once more on the perception that Labour cannot help penalising success.
The Conservatives unveiled a new version of their famous propaganda blitz, with posters and leaflets at London's train stations.
Even before the shock announcement of a 45p higher rate for those earning more than £150,000 a year, the Tories had been preparing their campaign with warnings that every family will pay heavily in the long term for today's pre-Christmas borrowing and spending binge.
On one estimate, every family will pay nearly £10,000 for the Chancellor's £16 billion “fiscal stimulus”.
Mr Cameron today told the CBI that cutting interest rates and freeing up credit would do much more to help the economy than unfunded tax cuts.
He also hinted that the money markets may scupper Labour's plans by making it harder to cut interest rates.
Tory modernisers, however, worry the higher tax rate will force the party into its traditional image of defending the rich or offering to slash public spending.
The pre-Budget report will be seen as the first shots of the 2010 general election campaign. In a direct attack on Mr Cameron's approach, Mr Brown warned the CBI today: “To fail to act now would not only be a failure of economic policy, but a failure of leadership.”
By increasing borrowing to £120 billion and breaking his vows on not raising income tax, Mr Brown tore up the rule book to stake his political future on his economic leadership.
Reader views (19)
Phil: "It's the people who were responsible and saved and put money into their pensions and acted in other financially responsible ways who are now the massive losers under Labour."
Um, no, they (and me) are massive losers because the city chancers gambled with our money, earning massive bonuses for doing so. I've yet to transfer my personal pension fund from the UK to Australia, but I do know that the loss I've incurred at the hands of the 'fund managers' I've paid to look after my money makes any tax increase in this budget look like petty cash. Same issue here in Australia: investment firm Babcock & Brown paid its staff bonuses of A$262m last year and is now one step away from going under, having seen its share price fall by 99%.
- Tonyb, Melbourne, Australia, 25/11/2008 06:30
Report abuse
My money on the Conservatives. They are better at economics. The Nu Labor socialism does not work, obviously. The UK needs saving. It's not a fun country anymore! It is as simple as that.
- Jacqueline, Hampstead, London, 24/11/2008 23:30
Report abuse
Colin, Barking, Essex
You are a Dolly Draper clone escaped from the BBC messageboards and trumpeting the Draper/Mandelson/ Campbell mantra. Your calling George Osborne 'Gideon' gives you away.
- Peter Grimes, London, England, 24/11/2008 22:04
Report abuse
Pete from Croydon is right about pensions. I paid contributions for a British pension for 47 years and I also paid for a Belgian pension on top of the British one for 5 years starting age 45. the Belgian pension is worth a quarter of the British one.
- William, London, 24/11/2008 21:52
Report abuse
By calling Osborne 'Gideon', which is not his name, Colin proves he is both blindly loyal to Labour and not capable of debating the real issues here.
- David, Kent, UK, 24/11/2008 21:25
Report abuse
Nice to have a Labour government back after the Blair Toryite government. Now lets do what Dennis Healey promised "Make the pips squeak" for all these rich people who have paid little taxes while those on benefits who find work find they pay up to 100% as they earn more and the benefits are withdrawn.
Now Georgie Porgie will you still let millionaires off Inheritence Tax?
And if you dont introduce the 45% tax say how will you fund the difference?
- Melvyn Windebank, Canvey Island, Essex, 24/11/2008 20:03
Report abuse
The Tory Party, as usual, have no policy to deal with this or any other crisis. Gideon is an empty vessel devoid of ideas and capable only of sarcasm. Time for Dave to give him his P45.
- Bill, Colchester, Essex, 24/11/2008 19:55
Report abuse
You can just see Old Labour creeping back. Borrow, borrow and more borrowing. We are back to the old Robin Hood saga of rob the rich to pay for the poor. If you are hard working and trying to build a future for yourself or your family, you can look forward to paying for some of the many feckless in our society for many years to come. Whatever happned to the prudent Mr Brown. Most sensible people who work hard for their money, whether that are young couples, families or indeed pensioners, are not going to go wild and make for the stores to spend their tiny increase, they will be too busy trying to budget for their increasing fuel bills and pay all the extra costs for their Christmas dinners, which will no doubt be far more expensive than last year. I think that a large number of the British public will be too busy wondering how they are going to manage to ride out the next few lean and difficult years.
- Sheila Luke, Isle of Wight, 24/11/2008 19:52
Report abuse
One tracked mind - Spend, spend and spend and we have always been for it so why not now. See house prices falling drastically? I don't think so. Start another war...but we are not the US. More finanacial wizardry...world has seen through it. Manufacture stuff...population too uneducated and lazy. Last resort...borrow the hell from eveyone and anyone, stupid enough who will lend to us. What's the way out? NONE -but we can drag the world down with us...if we can't have this good life, of spanish villas and holidays, no one else can either!
- James, Leicester, 24/11/2008 19:08
Report abuse
It ios deja vu time.I think I am reliving the mis 70's with Wilson.Where are my running shoes?
- R.Hart, Sutton Coldfield UK, 24/11/2008 18:17
Report abuse
This government doesn't just do small things badly, it does big things badly too, like ruining the economy, but not to worry, Gordon Brown will doublecross any bridge when he comes to it.
- Gareth John, Chelmsford, Essex, 24/11/2008 17:34
Report abuse
As usual plenty of squeaking from young Gideon but not one word of what he would do.
- Colin, Barking Essex, 24/11/2008 17:22
Report abuse
I agree with you, Stuart. The worst course that a Brit could have followed over the past decade (or rather, 11 years!) was to be responsible and save and not become a chancer with a 125% mortgage. It's the people who were responsible and saved and put money into their pensions and acted in other financially responsible ways who are now the massive losers under Labour. The constituency of Labour is the irresponsibles -- and that's the segment that Labour is now trying so desperately to help at the expense of the responsibles.
- Phil Jones, London UK, 24/11/2008 17:04
Report abuse
Even before Brown does some sleight of hand with the budget adding more to the bill, the nation's current debt is equal to £96,000 per household. (Centre for Policy Studies - The Price of Irresponsibility.) Take a long time to pay back. Hope you can explain it to your grandchildren so they can explain it to theirs.
- John Problem, Hackney Wick, London, UK, 24/11/2008 15:32
Report abuse
Brown talks a good fight, but when it comes down to it, he is absolultely 100% clueless as to how to run this country and its economy.
- Nobby Clark, Perth, Scotland, 24/11/2008 14:57
Report abuse
I am sorry I voted Nu Labor twice. Never again should they get elected. I am not a tax-payer (I got made redundant last week...) but I know taxing and wasting is not the answer to these British credit problems!
- Georgie, Islington, London, 24/11/2008 14:26
Report abuse
The gall of Brown and Darling to demand tax cuts as the only way to save the economy is mindboggling. Who is it that introduced dozens of direct and indirect taxes so that the proportion we pay in tax is at it's highest level since WW2. Who has presided over the economy whilst Council taxes have doubled in 11 years, gas, electric and petrol prices are the highest in Europe. The UKs old age pension is one of the lowest in the developed world. Access and quality of treatment within the NHS has fallen to 13th place in Europe. The amount held in private pensions has gone from the very best to one of the very worst funded in Europe. A million more workers are now employed directly by Local Government, engaged mainly on spying and issuing penalty notices to hard pressed families for leaving their bins out on the wrong day, or trying to get their children into a half decent school. The welfare state has become so ingrained and beneficial that it is better to avoid seeking employment, as the loss of benefits far outway any gained by going to work. All this, and more to come, after 11 years of Brown and Labour. When the General Election eventually comes the working/middle class's of the UK wont forget the amount of damage already done to their standard of living and will and vote accordingly.
- Pete, Croydon Uk, 24/11/2008 14:06
Report abuse
Being stitched up may be the price we all have to pay for reason to dawn.
We cannot all live off other people's taxes.
- Mike Newland, London, 24/11/2008 13:16
Report abuse
I am going to get stiched up because of all the idiots in this country both from within the Government and their voters who have borrowed too much money that they cannot afford.
- Stuart, london, 24/11/2008 12:10
Report abuse
