Chancellor Alistair Darling’s budget yesterday included one tax Continue reading
Tag Archives: Alistair Darling
Nicola Sturgeon shows the calibre of real leadership
On a day of apologies, Scotland’s Deputy First Minister, Nicola Sturgeon Continue reading
Scotland’s growth and UK fantasy money
Scots of all political persuasions are prey to the guerilla war Continue reading
Fine print of Westminster budget proposals threatens self-catering businesses
As they say, the devil is in the detail. Continue reading
Labour’s closing down sale
In a fire sale in a buyer’s market, the UK’s Labour Government Continue reading
The UK Government is burying bad news by making Sir Fred’s pension the headline issue – and Peston is the Patsy
The row over Sir Fred Goodwin’s pension is the distraction the UK Government’s spin doctors literally ordered in the leaks they engineered yesterday. The real story is not Sir Fred’s £693 THOUSAND annual pension but the £24 BILLION annual loss that RBS declared yesterday (the biggest in UK corporate history), the £300 BILLION of toxic debt RBS insured yesterday with the taxpayer (us) and the £2 TRILLION national debt we now carry.
This was yesterday’s real story – and today’s – and for more tomorrows than we dare count.
But the Government threw Sir Fred into the road – a meaty bone the news media hounds seized on savagely, too blinkered in the rush for blood to see the real carrion, the carcase in the shadows – as the spin controllers knew they would. The carrier pigeon for news on the road-kill decoy was the government’s new trusty, the BBC financial journalist Robert Peston who makes John Redwood – aka The Vulcan – seem normal.
Peston blew the whistle on Goodwin’s pension on cue on Wednesday night’s 10.00pm news – in good time to lessen media interest in the profoundly bad financial news to be released the following day.
There are major issues of policy and principle around what we are learning of the way people in certain sectors are paid and rewarded but these are far less pressing than the genuinely frightening level of debt the UK is now committed to carrying.
Even Mervyn King, Governor of the Bank of England has now said that if Britain had not gone into this recession with the level of public borrowing it had already taken on under the Blair/Brown governments, the Treasury and the Bank would have had more scope for effective action to resist the economic slide. This criticism of Government performance by the head of the Bank of England is unprecedented and is a sign of the seriousness of the UK’s current position.
Sir Fred’s pension is not the issue. His unregulated actions on behalf of RBS are the issue. The UK Government decided to go for ‘regulation with a light touch’, which of course meant little or no regulation of the banks by the feeble FSA. This was a tacit invitation to the banks to go bald-headed for profit – which led to the current collapse of the banking system.
This collapse resulted in the government going in for panic-driven progressive borrowing, all caution thrown to the winds in the interests of political survival. And the presses of the Royal Mint are due to start rolling next week in the interests of ‘quantitative easing’.
So let’s keep Sir Fred in our sights for later on but let’s not take our eyes off the cosmic cloud of ordure that’s hovering above our heads.
And by the way, it’s not over yet. The Lloyds Banking Group will only say that it is in discussions with the UK Government, which are progressing well. These discussions are thought to relate to the group’s wish to follow the RBS into insuring another welter of toxic assets with the taxpayer. And what they want to ‘insure’ (Alistair Darling’s term for this liberating manoevre – ‘asset protection’ – is even more laughable) is said to be around £250 billion of toxic debt.
£2 trillion of a national debt already looks like a very conservative estimate.
UK ‘divide and ruie’ strategy on the rejection of funding spread for new Forth Bridge project
Everyone agrees that a new bridge across the Forth is crucial to the development both of Scotland’s transport system and thereby of its economy.
Whatever one’s politics or one’s views on any particular issue, there can be no doubt that Scotland today has a Government that governs, that accepts responsibility for decision taking, that will face up to tough situations and that is building a strategic policy for the growth of the country.
There is every fiscal sense in Finance Secretary, John Swinney’s request to the UK Treasury to spread the cost of the new bridge over the next twenty years of Holyrood’s capital budgets.
In its rejection of the request, there were two responses from UK Treasury Ministers:
- Chief Secretary to the Treasury, Yvette Cooper, said: ‘The UK-wide public spending framework does not allow for bringing forward spending in this way’.
- Chancellor Alistair Darling described the Scottish Government as: ‘asking to borrow money from budgets that have yet to be allocated, over an extremely long period’.
Let’s take a sharp reality check here.
Alistair Darling and Yvette Cooper, with Prime Minister Gordon Brown, have committed the entire UK to a volume of borrowing debt never seen before in history. It will take, not just twenty years, but generations to repay and its impact on future budgets cannot even be guessed at
So talking about a ‘public spending framework’ in a context where the Prime Minister has thrown all frameworks out of the window is no more than robot-babble.
And talking about ‘asking to borrow money from budgets that have yet to be allocated, over an extremely long period’ is a very pale description of the fiscal burden the UK Government has now taken on.
These wafer-thin ‘defences’ for saying no should not be taken seriously for more than the twenty seconds it takes to see through them.
The real strategy is baldly seen in the Chancellors further remarks: ‘If you are contemplating large projects like this you do have to make choices’.
By rejecting the fiscallly responsible suggestion Holyrood has made, the Westminster Labour administration is obviously trying the tired old political trick of divide-and-rule. It is hoping to force the Scottish Government to take such choices and set Scot against Scot and Scots against their Government in consequence.
It is to the credit of the Scottish Government that it has not flinched from this. John Swinney has said that the bridge must go ahead and that other projects will have to be prioritised.
Bridges cannot be built quickly. The future of Scotland’s economy depends upon the main infrastructure being fit for purpose and this work has to start now. This affects all Scots, wherever they live in the country. It would be good to see Scots resisting being made pawns in a bigger game by refusing to have their local territorial fears set against the larger national interest – and supporting the bridge project.
Scottish Government to protect pensioners by continuing payment rate of pensions wrongly calculated from 1978 in UK mistake
The Scottish Government has demonstrated a firm hold on the moral compass. It has decided to continue to pay the expected rate to retired people whose pensions are caught up in the UK Government’s overcalculation, operating since 1978. The decision has been taken because the Scottish Government did not want to see any pensioner ‘lose out’.
Elderly people who simply accept what the state hands them – and how many of us would have any idea how these deliberately complex systems work – will long have arranged their lives around known budgets.
The UK is now entering a deep and long recession. Public borrowing is at a level never experienced before in this country. Income tax is set to rise in a couple of years time to try to claw back some of the cost of this,
Imagine being a retired person in this situation, with what you had at least regarded as a known and regular income – your pension – ‘adjusted’ (to use Chancellor Alistair Darling’s word) in April 2009.
Attempts to re-enter the employment market, which a few might be in a position to consider as a buffer against loss of income, would face competition from younger people recently made redundant as job losses rise.
The Scottish Government has had the courage to make the socially and morally responsible decision. A consequence is that some retired public sector workers in Scotland will, after April, be a few hundred pounds a year better off than their counterparts in England and those in other Scottish pension schemes.
But the key thing is that people who have budgeted for these bad times on the basis of a pension which has long been operating at a known and stable level will not face additional and unexpected hardship.
Most of those affected are public servants whose work impacts directly on the lives of others – servicemen, nurses and teachers.
The UK Government has accused the Scottish Government of being ‘utterly irresponsible’ with taxpayers money. This is the same UK Government which, as For Argyll reported yesterday (16th December 2008), has just covertly made taxpayers the new wholesale lending market for banks. This may cost us as much as £250 billion – yes, billion.
But safeguarding the frightened elderly, the innocent and powerless victims of a Governemnt mistake? That’s ‘utterly irresponsible’.
U-turn (well, for now) on secret Pre-Budget Report plan to raise VAT to 18.5% in 2011 – and is 20% on the cards?
A Treasury document was discovered on the Government website a few hours ago, late on Monday 24th November. It was a briefing paper on the Chancellor’s Pre-Budget Report – but with additional measures not contained in the issued version.
This document makes it clear that there is a plan not only to return VAT to 17.5% on 1st January 2010 – but to raise it to 18.5% in 2011.
The Government are denying that they plan to do this but the existence of the document undermines the denial.
Given the degree of smoke and mirrors For Argyll drew attention to in the Pre-Budget report plans delivered yesterday – and the hidden details that have emerged from the unannounced fine print earlier today of the whacking hike in tax on whisky – this adds to the damaging perception of deception by the Government, by the Chancellor and by the Prime Minister, Gordon Brown.
This morning’s U-turn (26th November): A handbrake turn was executed this morning with the document said to have been put on the Government website by mistake, reflecting no more than earlier discussion on the possibility of hiking VAT to 18.5% in 2011. Unfortunately the errant document had, in fact, been signed off by a Government Minister.
The Chancellor now says that ‘there are no plans for the introduction of a 18.5% VAT rate in 2011′. While that’s as may be, there is plenty of time between now and then for such plans to come into being.
Update 18.00 26th November: It has emerged during debate in the House of Commons that the UK Government considered a rise in VAT to 20% before, they say, rejecting it, presumably in favour of the rise to 18.5% from 2011 which seems not to be in the plans today.
The Conservatives have identified a £10 billion hole in the accounts of the Pre-Budget Report prepared by the Prime Minister and the Chancellor. It was delivered to the House on Monday by the Chancellor, to be followed by a damaging series of revisions and retractions, of which this is one.
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And a handbrake turn on the largest single tax hike on whisky in forty years hidden in budget small print
The U-turn (Wednesday 26th November): The whisky industry has rightly flexed its considerable muscle. Suddenly this was all an awful mistake, The Chancellor (and HMV) had ‘not intended’ to do anything their than keep the price of whisky at the same level, exchanging the drop in price through the 2.5% VAT cut for a tax hike they thought would simply put that cost back. The Treasury ‘forgot’ that duty on alcohol is calculated not by percentage of price but alcohol by volume. This naturally made the additonal burden on spirits higher than intended.
Believe this or not, at best it is the sort of basic mathematical error a Higher Maths student would be hammered for making. Coming from the Treasury, it does not instill confidence.
In any case, the Chancellor has ordered a review of the measure announced and it is anticipated that procedures will be taken to reduce the hike on whisky to maintain both the tax take and the retail price at current levels.
The original story (small hours of Tuesday 25th November): When UK Chancellor Alistair Darling introduced his Pre-Budget report a few hours ago on Monday 24th November 2008 – effectively a mini-budget, what he did NOT announce was another sharp hike in the tax on whisky. This was hidden away in the small print of the full written report, released later yesterday.
The Scotch Whisky Association says that, even when allowing for the 2.5% cut VAT – limited to a thirteen month duration, the announcement will put an extra 29p on an average 70cl bottle – and more than that when VAT goes back up to 17.5% after 1st January 2010.
The move has provoked a storm of protest in and for Scotland and its major export.
Angus Robertson, MP for Moray, the largest concentration of whisky distilling in the country, has gone on the attack as has his Holyrood colleague, Argyll & Bute MSP, Jim Mather, with responsibility for many of Scotland’s legendary single malts distilled in Argyll. With additional responsibilities for the whisky industry as Minister for Enterprise, Energy and Tourism, Mr Mather says: ‘I see that Angus Robertson has written to Alastair Darling protesting at this latest rise in Whisky taxation.
‘Not only is the rise substantial but the timing is unfortunate, falling due, as it does, in the period when a large percentage of sales in the home market, in the run up to Christmas and the New Year festivities, takes place. More than 40% of sales of Malt Whisky and 30% of Blended Whiskies takes place at this time of year and it is a vital time for the health of the domestic whisky trade.
‘As well as taking risks with the future viability of the distilling industry at home, the Chancellor sends out entirely the wrong message to other governments where we export whisky and who are often ready and willing to follow his example. After all, if the UK chancellor is prepared to use the prestigious Scotch whisky trade as a cash cow why would others hesitate to do likewise?
‘It is clear that this damaging and reckless decision can have only a negative effect on one of Scotland’s most important industries’.
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