Brown will have to raise taxes by £11bn, says report

#1
Gordon Brown's denials that he will have to raise taxes after the next election were called into question last night by two influential reports.

The Chancellor has repeatedly insisted that the economy is growing strongly enough for him not to have to raise taxes or cut spending.

But the Institute for Fiscal Studies said yesterday that Mr Brown would have to raise taxes by £11 billion to pay for his spending plans and get public finances on to the track predicted in last year's Budget.

According to the institute, the Government was on course narrowly to miss its golden rule to borrow only to pay for investment if the economic cycle ended in 2005-06.

The Chancellor suffered a further blow when a cross-party Commons committee said Treasury forecasts for healthy tax receipts contained "significant risks".

In an assessment of the 2004 pre-Budget report, the Treasury select committee noted that many forecasting bodies were sceptical about Mr Brown's forecasts.

According to the committee, the margin for meeting the golden rule had fallen further since the Budget, and now stood at £8 billion (0.1 per cent of gross domestic product).

"Many independent forecasters believe that this is too narrow a margin to be confident that the golden rule will be met," the report said.

The Treasury, the committee said, was forecasting an acceleration in tax receipts in the final four months of this financial year and even stronger growth next year. "While there are grounds for optimism, there are significant risks to this forecast," the MPs said.

The report from the IFS was seized on by the Conservatives to back up their warnings that Mr Brown will put up taxes after the election if Labour is returned to power.

The IFS "Green Budget", published in collaboration with the US investment bank Morgan Stanley, forecasts that Government borrowing will be higher over the next few years than the Treasury thinks - in large part because tax revenues are not expected to grow as quickly as it hopes.

To be reasonably confident of meeting the golden rule over the next cycle, the Government would have to announce fresh tax increases or trim spending proposals.

The study said Tory plans to cut public spending by two per cent of national income over the next six years would "in principle" allow them to go ahead with their £4 billion tax cuts and still expect to meet the golden rule.

Michael Howard, the Tory leader, said of the report: "It is a warning about the price the British public pay for voting Labour at the next election."

Oliver Letwin, the shadow chancellor, said there was one simple question the Prime Minister had to answer: "Which taxes are you going to raise?"

Labour said later that the IFS report was based on outdated figures, while tax receipts were picking up.

Paul Boateng, the Chief Secretary to the Treasury, said: "Figures and forecasts from think-tanks and other pundits come and go. They change week by week.

"But the official figures that have come out today show that we are on course to continue our record period of economic growth as we continue to meet our fiscal rules."

The economy grew by 0.7 per cent in the last three months of 2004, the Office for National Statistics said yesterday. It marked the 50th consecutive quarter of growth and the longest period of expansion for 200 years.

The figure surprised economists, who had forecast growth of around 0.5 per cent. The full-year figure for the growth of the economy is estimated at 3.1 per cent, compared to 2.2 per cent in 2003.
Even the experts predict brown has maxed britains credit cards and will have to increase taxes to pay for them next term. Be warned!!! 8O
 
#2
House prices heading south, reduced holiday bookings and appalling Christmas high street sales didn't warn you?

When I see people using credit cards in Tesco's to pay for less then £5.00 worth of goods, then I know we're headed for a proper slump.
 
#3
Balls.

It won't be £11 Billion, the figures it was based upon are no longer accurate (look at the end of the article, 0.7%, not .5)

The odds are this is a worst case figure that's been pulled out of a several hundred page report. Taxes will go up, but i don't think the hole will really be that big.
 
#4
What the hell does he do with it?

Britain has the fourth largest economy in the world FFS. Okay, I can see that as a direct result of that statistic we haemorage money to the Euro zone for no significant return except the heart warming knowledge that Pablo and Isabella have better road surfaces, but how is it that everything with which I seem to have any contact is having its budget cut and he's still short of money.

Did I dream it or did GWB just request an ADDITIONAL $80 BILLION for the DoD? Where the hell are my taxes going?

Grrrrrr!
 
#5
Just look at the Christmas sale receipts though. The stores had their worst sales in decades. If Joe Public isn't parting with the readies anymore then it doesn't matter what it did in the last three months of 2004 or whats projected because it's going to get worse.
 
#6
House prices heading south, reduced holiday bookings and appalling Christmas high street sales didn't warn you?

When I see people using credit cards in Tesco's to pay for less then £5.00 worth of goods, then I know we're headed for a proper slump.
In regard to houses, prices are not heading south, they are just slowing down (or leveling off at worst case). Building societies have just backed that up with figures 2 days ago. Interest rates have been extremely low for the last 3-4yrs (hence why houses have shot up) in order to prop up the economy(making people borrow money and spend it rahter than save) Now that interest rates are rising, people cant afford to spend so much at christmas and on holiday. This is what is responsible for the current gigantic debt that britain (the people, not the government) is in (£100billion)

Brown has mismanaged the economy by throwing money at the public sector in order to prop up the economy and reduce the unemployed.

Balls.

It won't be £11 Billion, the figures it was based upon are no longer accurate (look at the end of the article, 0.7%, not .5)

The odds are this is a worst case figure that's been pulled out of a several hundred page report. Taxes will go up, but i don't think the hole will really be that big.
Did you get that stright from Gordon browns "how to deny the state of the economy" booklet? The figures used to calculate the total were chosen by a panel of ecconomic experts, and the one you quote is from labours statistics /economics dept. Tell me which one you would trust? The experts or the truth twisting snakes at whitehall?:roll:

For our sake i hope you are right, but im afraid this report was written by experts who know what they are talking about and not some journo who randomly picks large figures from mountainous reports.

Keep the opinions coming, this discussion is becoming interesting
 
#7
'Tax to spend' (or more accurately, waste) has always been a basic tenet of Labour politics - why is anyone surprised that Grasping Gordon is no different to previous Labour incumbents of No 11?

I suspect that some people were taken in by Bliar's champagne socialism and snake-oil sales patter in election speeches. They're all filthy socialists beneath the Neue Arbeit veneer.
 
#8
Very interesting but I'm afraid I'll have to add it to the "I don't wish to know that" The bstard will do exactly what he wishes with no yes/no/maybe from us. Just another thing to put in my euthanasia scales to see which way they tip for nexy time I'm ill enough.
 
#9
Its all about spending cash to make it look like they are doing things to help the country when the truth is all they are doing is increasing the level of beaurocracy, middle management and their empires!

Typical socialist doctirne!
 
#10
fas_et_gloria said:
What the hell does he do with it?
On CNN this morning, saw P.M. Blair declaiming about how "industrialized nations" have got to shell out more to "combat AIDS in Africa."

They, the few in control, have a definite idea of what they want for everyone else: They want them to be without rights, without funds, completely dependent upon, and utterly at the mercy of, the government.
 
#11
In 1997 the Government's immigration budget was £200 million. Now it's nearly £2 billion. In Australia, they spend just £286 million policing their immigration system. Even through they process three quarter of a million more applications than we do.

How can the Government defend its inefficiency when a better system is there, ready to adopt?
 

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