Wednesday, April 22, 2009

DARLING UNVEILS 50% TAX RATE !

Alistair Darling has announced a new top tax rate of 50% for those earning more than £150,000 from next April.
The chancellor unveiled the measure after delivering a stark Budget report on the state of the UK economy.
He said debt would hit a record £175bn this year and the economy shrink 3.5% - its worst performance since 1945.
But he is gambling on a swift recovery and unveiled measures including a £2,000 "car scrappage" scheme aimed at kick starting industry.
He is predicting the economy will start to grow again at the end of this year.
But Conservative leader David Cameron said his speech revealed the "utter mess" the prime minister had made of the economy.

KEY POINTS
50% tax rate for earnings over £150,000
Growth forecast revised down
Borrowing increased
£15bn 'efficiency savings'
Clawing back tax relief on top earners' pension
£2bn help for young unemployed
£1bn to boost housing market
Car scrapping scheme

Watch live: Video and text
At-a-glance: Budget 2009

He added that Mr Darling had not done enough to get spending under control and "Britain simply cannot afford another five years of Labour".
Liberal Democrat leader Nick Clegg described the Budget as a "mish mash of recycled announcements from a government skilled in raising false hopes and incompetent at delivering real help".
The new top rate of tax is a change of plan from the pre-Budget report last year in which Mr Darling had proposed a new tax rate of 45%.
It is also being brought in a year earlier than planned "to pay for additional support for people now".
BBC Political Editor Nick Robinson said Labour had ditched its manifesto pledge not to raise income tax before the next election in an effort to "wrongfoot" its opponents and cheer its core supporters.
It also wanted to raise money, "although the Institute of Fiscal Studies has questioned whether increasing the top tax rate will raise much".
In other Budget measures, petrol duty will increase by 2p per litre in September and then by 1p a litre above inflation each April for the next four years.
Alcohol duties will go up by 2% - about 1p a pint - from midnight. There will be an increase in tobacco duty of 2% from 6pm - adding about 7p to a packet of 20 cigarettes. Mr Darling said these measures will raise more than £6bn by 2012.
That would help pay for a real terms boost in pensioners' income - including new pension recognition for grandparents who care for their grandchildren - and help for savers with ISAs.
Jobs
There will also be more help to get people back into work quickly and support businesses and homeowners facing problems.
Everyone under the age of 25 out of work for 12 months or more will be offered a job or a place on a training scheme. In addition, the government will create or support up to 250,000 jobs in deprived areas.

Mr Darling also announced an expansion of sixth form and further education places.
In his speech, Mr Darling confirmed the worst year for the economy since the Second World War with a 3.5% decline in 2009 - far worse than his pre-Budget forecasts.
Public borrowing will also soar to record levels as the Treasury wrestles with a toxic combination of falling tax receipts, higher spending and the cost of bank bail-outs.

But he made clear his plans depended on a rapid economic bounce-back - with a forecast of 1.25% growth next year rising to 3.5% in 2011.
And he admitted that the economy would first face of period of deepening deflation with the Retail Price Index falling to a low of minus 3% by September.
There was grim news on the jobs front ahead of the Budget, with unemployment figures showing the number of people looking for work has reached 2.1 million - its highest level since Labour came to power in 1997.
Meanwhile, official figures showed that public borrowing soared to a record £90bn in the last financial year - almost 6.2% of national income and far higher than the £78bn prediction made by Mr Darling in his pre-Budget report last November.
Mr Darling is expected to plug part of the gap in the public finances with £15bn of "efficiency" cuts from 2010 - after the next election - provoking anger from public service unions.
He also announced he was extending the Stamp Duty holiday on properties sold for less than £175,000 until the end of the year as part of a £1bn package aimed at boosting house sales and building.
BBC NEWS REPORT

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