If ever a Chancellor has been given a hospital pass – Alastair Darling is that man. Gordon Brown has left him with an economic legacy that is so catastrophic that today the Chancellor delivered one of the most lacklustre performances at the dispatch box that I can ever remember seeing in over more than the 15 years I have been in the House of Commons.
Every man and woman in Wales knows that the cost of living is soaring. Real inflation can be felt in the household budget, which is biting on every family in the country.
Under Labour Council taxes have gone through the roof and mortgages cost more to arrange; every time you fill up the car or go to the supermarket the prices have risen; household bills just keep costing more and the amount of money families have to spend is falling.
But the Chancellor doesn’t seem to get the picture and with so little room to manoeuvre this was not a budget that would make anyone feel better off or confident about the country’s future. The public will not be reassured that this new Chancellor is a safe pair of hands. This did not seem like a man delivering his first budget. It sounded like a man delivering his last.
If any one needs proof that the Chancellor does not have any room to manoeuvre in the economy, just look at taxes. Whilst our competitors are cutting taxes on enterprise the Chancellor confirmed today they are going up. Capital Gains Tax is up by £700 million, tax on family businesses is up by £200 million – that’s the new income shifting rules that hit family businesses. Corporation tax on small businesses is up by £800 million and as we approach the downturn –we have a chancellor who is hitting wealth, jobs and investment this country so badly needs.
The country is in debt because the Prime Minister - when he was Chancellor failed to save for a rainy day. Borrowing figures confirmed today that we have the largest deficit in the developed world - so now as the economic downturn is starting to reverberate around the globe we owe more money than any other country in the developed world and cannot pay it back.
The Barnett consequential is estimated as £5 million over the next three years but more than that will be collected in taxes on hard pressed families.
Other countries are cutting taxes but the bottom line for families here, after this budget, is an additional £110 of tax to be paid by every family.
Darling’s plans also hit everyone who drinks responsibly. If you go down the road for a pint that will cost you 4p more, if you like a glass of wine 14p is going on a bottle and if you want a whisky add another 55p. This unsophisticated and poorly targeted approach will ensure that it costs more to visit the rural pub. Instead of targeting yobs who get drunk on alco pops and strong lager the Chancellor is penalising the responsible majority.
And the rural pub is not the only loser in the countryside. Vehicle excise duty rises will hit people who really depend on their cars.
The abolition of the 10p starting rate of tax which is about to come in next month – courtesy of the last budget - will penalise health workers, education assistants and even our soldiers fighting in the heat and dust of Afghanistan. All will end up paying more tax.
In a politically calculated move Alistair Darling has delayed the fuel tax rise but even so £1.6bn of extra taxes will fall on motorists.
On preliminary calculations £1.7bn extra tax will fall on business and there was little in this budget to help business increase their competitiveness as the economic climate toughens.
Also looking ominous for Wales is the announcement that national road pricing is now becoming a reality. The Chancellor has ordered that the technology to tax road users should be ready by the end of next year.
It is no accident therefore that the Local Transport Bill, currently before parliament, contains the first law that will permit National Road charging to be apx could hit all our businesses, tourists and farmers and potentially use us as guinea pigs.
There is some good news but once again it does not bear close examination. The extra money for the winter fuel costs is for one year only and as Age Concern said it is “a spoonful of sugar to make the bad medicine Budget go down for pensioners.”
The child poverty announcement means that in reality Labour will miss its own 2010 target for lifting children out of poverty by as many as 450,000 children. As Save the Children said “his investment does not match his ambition”.
Finally as far as the green aspects of the Budget are concerned – they are quite frankly rather disappointing. Conservatives maintain that green taxes should be revenue neutral shifting the burdens from the family onto the polluter. Forgive me for being cynical but it seemed to me that gesture politics are alive and well in No 11 Downing Street with the green agenda falling short of measures that could have ensured that it was cheaper and easier to reduce our carbon footprint.
As usual it will take some time to wade through the spin but make no mistake when all the details of this Budget have been unpicked – as with all new Labour budgets the one certainty will be that most of us will be poorer – but will our economy be stronger in Wales and in the United Kingdom? I doubt it.