Lower duty on whiskey? I’ll drink to that
In the first of what could be many PBR u-turns, Alistair darling has been forced to renege on a pledge to increase alcohol duty. Proposed rises in duty have been halved to 4 percent. He got his sums wrong, honest mistake?
Well, no. Duty rises are permanent, VAT reductions are only set to last for the next 13 months. This covert tax rise had not gone down well with Scotch Whiskey producers, claiming that an extra 29p a bottle would have been added in order to cover duty rises. And that would mean Scottish people couldn’t afford to get drunk.
Darling, ever the Scottish sympathiser, has acted swiftly, and this should be applauded. But his covert tax hike in fuel and alcohol duty should not.
An increase in the highest band of income tax to 45% has been treated by many papers as the end of New Labour policy forbidding tax rises. This is absurd. It is merely the first time they have been explicit about it.
The spin coming from Labour is that this budget is designed to help the worse off and tax the super rich. Aside from the fact that if you tax the rich people of the City, they will leave, this budget will affect people on middle incomes a lot more than the Government is letting on. National insurance increases will see to this.
Labour’s pledge to help poor people seems to be based on their ability to create a lot more of them.
Couldn’t agree more about Labour spin.
They’re puffing out their chests as if they were saviours of the world.
They will be found out though and all will come crashing down. The PBR was a damp squib in the mix of an ever worsening recession. The Governer of the Bank of England says more needs to be done to get banks lending again, so what does Darling do? Lower VAT by 2.5% meaning those less well off will save about 20p off their cinema ticket, whilst the Mr Moneybags buying his fourth £75,000 car will save £1,500.
Lucky us.