The initial reaction to Darling’s Budget speech has to be that he has
demonstrated that the government has now run out of ideas on the economy. He
will score with left of centre voters for his attacks on high earners with the
cap on pensions tax relief and the 50% rate of tax but he will get widely
criticised for being too timid on the public sector deficit and for the tax
increase on booze and fuel. Unfortunately for him, Labour needs to do alot more
than appeal to its core supporters.
His argument for not acting with greater vigour to cut public spending seems
to rely on his optimistic forecast that we will start to see a recovery by the
end of this year with growth in 2010. This seems so far out of line with almost
every other forecast that it is scarcely believable. I didn’t even get the
impression that the Chancellor really believed it either so downbeat was his
presentation of that section of his speech. Indeed, overall, he seemed to lack
conviction, perhaps demonstrating that he feels totally hemmed in by the
economic and fiscal circumstances.
Cameron’s response has been all bluster and even less substance, although I
have always thought that it must be one of the most difficult speeches to make.
As I said yesterday, the real test for the opposition will come later in the
Budget debate when Osborne and Cable get their chance to launch more considered
critiques of the Budget.
To read more of David Worsfold’s blog,
Colin responds to the call for 'Darwinism' in accountancy
Does Darwin's theory apply to taxation? Colin ponders...
Colin comments on the effect of Brexit on the influx of partners at KPMG
Colin provides insight into the Tesco and Unilever scandal over Marmite