Monday, 21 September 2009

Where to look for spending plans

George Osborne, the Tories’ shadow chancellor, is in hot water because he claimed that Labour has secret plans, revealed in leaked treasury documents, to raise another £50 billion in income tax by 2013/2014. In fact, the supposedly confidential figures were actually published in last spring’s budget.

This shows how clever the Labour party has been. They did publish their plans, but in a place nobody would ever think of looking at. Who in their right mind would think of looking in a budget for spending plans?

George Osborne made one other mistake. He assumed that, because Labour plan to raise another £50 billion, they must intend add another £2,770 a year to the average family’s bill by the end of the next parliament, and that this would require tax rate increases. In fact, the increased revenue will come from another bit of Labour cleverness: the magic of recovery. By 2013/2014, they reckon, we’ll all be so much better off that we’ll happily be paying that extra £50bn out of the huge disposable incomes we’ll all have by then. It really is very clever. There’s just one minor loophole. What if, by some million-to-one chance, we aren’t all actually swimming in money in 2013/2014?

Change the World.

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