91Èȱ¬

There is something very odd going on at the 91Èȱ¬ today. There seems to be this conviction that *all* low-earners will be compensated for their higher tax bills by expensive tax credits. It's patently false - you can due a search for a £6k salary on the tax credits site and you'll get a tax credit of £90. Net loss = £150 no matter how you try to spin it. So why are you **refusing** to even mention this?!

And why the studious silence about saddling needy small businesses with higher costs?

I feel really disappointed that the media "pundits" today are so thoroughly poor. But it's not convincing anyone.

What's going on 91Èȱ¬? This is not comment and most certainly not analysis. The bloggers are shaming you. No wonder people increasingly turn to bloggers for analysis and listen less and less to what journalists have to say.

I think it's pretty easy to identify the losers Evan. If you earn less than 18k or so, you've just had your tax burden increased by the self-styled 'anti-poverty' Chancellor

Evan -- you seem to have been taken in by the Chancellor's spin. (As has the 91Èȱ¬ as a whole, given its choice of "Brown cuts basic tax rate by 2p" as it's main headline.

This is a terrible budget for the low paid and for the middle classes. And small business owners are hit with a 3p tax increase (which means they'll be paying an extra 16% of their profits).

Your instinct is that this is a good budget for Brown. Mine is that it sounds his death knell.

We'll see who's right . . .

Yet another smoke and mirrors peformance from the King of Illusions, headline grabbing tax cuts yet he has actually given back nothing! the NI upper limit exemption rise rises and the abolition of the 10p rate will more than pay for his gimmicky cut, yet again Middle Britain has been fleeced, no change there then !!

Well what can one say to Brown’s last budget. I was absolutely gob smacked to hear Gordo announce a tax cut and on income tax as well. Could it be, I thought, that a leopard can change its spots? Could it actually be that Gordo has seen the error of his ways and decided to stop squeezing us tax payers quite so hard?

A cautious smile started to spread across my face, until I heard that the 10pence rate was being scrapped. So what does this mean for someone like me, a youngish fella, living with his fiancé, who works for a charity on the South coast? Well my friends I can tell you that the net effect of the changes is negligible and the claw back of the 10pence rate wipes out any real benefit from the reduction in the 22 pence rate of income tax.

Coupled to this the extra money on wine, beer and petrol and the net result is that far from being better off, Gordon’s done it again and like millions of people in this country we find ourselves worse off.

To announce the 2pence tax cut on income tax whilst taking pretty much everything back else where is without doubt one of the most cynical uses of spin I have ever encountered. To me this budget document is Brown’s own dodgy dossier and the only thing that is missing is a claim about the introduction of a new fiscal measure in 45 minutes…or something like that.

If you actually add up the tax take from the adjustment Gordon is making to National Insurance thresholds as well as the effect of income tax changes he will actually be taking an extra £500 million, so far from the great give away this is actually the great tax grab.

Is it any wonder why so many people don’t trust a word Gordon and the Labour Party utter?

There is no tax cut - is Brown has abolished the 10p rate - I presume we are now paying twice as much tax on this first £2000 - to be offset against the 2p reduction in the basic rate - again - Brown insults Joe Public if he thinks we will not notice yet another not so stealthy tax increase

Bring Back Maggie!! She was honest!

A Francis

1. There will be losers - even if we can't identify them easily, as it's a complicated package.

??? Seems pretty obvious to me that anyone in employment, earning less than about £18k pa, without kids will be worse off.

the housing game is distroying this country ..impoverish the poor or new generation and fattening the same people..government should protect the right of housing..and bank should'nt just suck the people's blood.when uk will regularised the market!
will also resolve the crime..it's all a chain..

One clear loser are personal service companies (PSCs) - small limited companies often with just one employee offering contract services. They're most common in IT, but I believe journalists often use them as well, as they pay less tax and NI than tradtional self employment. However self employment often isn't an option for IT contractors because the intermediaries contractors have to work through (agencies) won't deal with the self employed.

Gordon's been after us since he came into power, first through IR35. This failed to work but made many contractors shift to Managed Service Companies (MSCs). Now they've introduced legislation to close these down from 1 April everyone has shifted back to PSCs, and companies house is swamped with applications for new companies.

The increase in the small comapnies tax rate is designed to raise our tax burden to closer to that of self employment, but it's a pretty blunt measure that I'll imagine will hit a lot of non-PSC small companies pretty hard.

Some of the budget I can understand but with the change in income tax those of incomes under £40,000 are once again hit harder than those over £40,000. Under £40,000 I am worse off by £60 - a collegue on over £40,000 is £250 better off - how can that be fair taxation !?!? Really people who can afford to pay more - should.

A Reply from an every day citizen of Blairtopia.

1.Easy to identify losers, go into the street and point randomly.All will be losers eventually
2.Since when have parties ever REALLY disagreed?
3.Obviously learned from Tony how to leave your mark (or stink)
4.No shock there then.A bit of DejaMoo: I've heard this bull before.
5.Typical Labour.Spend-Spend-Spend--Tax-Tax-Tax
6.Hmmm on this one.Typical of Labour spin and abusing statistics. I'm surprised that labour didn't measure the length of Britains roads pr-Labour in Miles, measure them again this year in kilometers and then state that Labour has Increased the length of Britains roads while in power. They apply this theory to pretty much every other statistic spouted.

Happy new budget, Happy new labour, Happy getting Poorer

I'm very surprised at the abolition of the 10p tax band, is there any good reason for this? This must certainly be making it harder to earn a living wage.

Seconding the comments about the 91Èȱ¬ basically ignoring the 10p tax abolition.

Evan, as other people say, it's pretty easy to identify the losers. The headline reporting this budget should be "Brown shafts poor".

Ridiculous.

I worry about the future in this country. More and more money is dished out to parents of young children to encourage them to work, instead of doing what parents need to do. At the same time we have increases in behavioural problems, binge drinking etc amongst the young. They are not learning values and respect. When did you last see a youngster give up a seat on a train or bus to a pensioner? I see poor babies being dropped off at nurseries at 7:30 am in the morning; presumably they're picked up very late in the day. What sort of a society are we building? All we hear about in relation to child development is achievement and academic competitiveness. Part of the reason house prices have risen to a level where 2 salaries are needed to pay a mortgage, is that both parents are always determined to work. They can therefore afford a big mortgage. It's simple supply and demand. We should be giving transferable tax allowances between married couples and encouraging one parent to stay at home for a few years.

If you can't identify the losers, the I will, as fron an income of 10K, I will be £140 worse off in 2008 and I can't afford it!

You make a great point

3. It's a substantial budget. Many of the tax measures have been announced over a three-year period. There will be no need for the next chancellor to have a budget for a while!

he shows that even from no 10 he will want to be pulling the strings in the treasury, it's almost as if he doesn't trust his soon to be appointed replacement to run the show

Shame on Gordan Brown! I thought the labour party supported the low paid. Taking the abolition of the 10% tax band and reducing the 22% to 20% benefits anyone earning over about £15000 and makes anyone earning less worse off. An appalling measure.

Can somebody clarify when the 10p rate is to be abolished? Same time as 20p introduced? There seems to be some confusion in media reports, this is of critical importance to Browns' scheming..

As always, unemployed Disabled people are not benefitting - why is there no financial penalty on businesses who refuse to employ us despite our skills? And why hasn't the winter fuel allowance been extended to us?

Losers in this budget are easier to identify if, like me, you have a long-term illness. I will lose money when the 10p income-tax band goes because I am too ill to work anything close to full time.
On the other hand, my husband, like Evan Davis, works full-time for a professional salary. Both of them seem likely to be better off.

Fortunately, I'm not struggling to survive on my own, in which case this budget would hurt. Other sick people may not be so lucky.

Punishing the poor and sick and rewarding the rich with the cash saved seems an odd priority for a Labour government, except that scrapping the 10p rate should have the happy side-effect of gaining Labour votes. If more people gain than lose from the change, and already disadvantaged poor people are not natural Tory voters, who needs to worry about social justice?

I actually find it quite odd that we are seeing the headline, Tax Cut ,because,as my income is less than £17,500 a year I will in fact be paying more income tax.It would seem to be another case of rob the poor and give to the rich.

Gift Aid was mentioned in the speech and Gordon said he would see how else to help charities and churches. Cutting basic rate income tax will also cut the Gift Aid tax recoverable by these struggling organisations. Is this helping them??

We are told that pensioners will gain from this budget. I supplement my state pension of £50 per week with interest earned on savings. Since interest on savings is taxed at 20% I gain nothing from the reduction in the basic rate of income tax. By losing the 10% rate of tax on the first £2090 I will pay an extra £209 in tax. I am sure there must be many other pensioners in my position who do not qualify for pension credits and rely on interest from their savings, who are being penalised by the abolition of the 10% rate.

Economics Editor Evan Davis states:

‘There will be losers - even if we can't identify them easily, as it's a complicated package’

The biggest losers are - Ex – nurses, soldiers, police officers and fire fighters with no children or children over eighteen years of age who have had the audacity to become sick or be injured and claim a pension before they are of ‘pensionable’ age.

They cannot work and may even be dieing of diseases such as cancer.

They will have a pension commensurate with their length of service; they might even get £9,000 each year. They are not eligible for any tax credits; if they manage to get Incapacity Benefit, which is not ‘means tested’, they will not get any of the perks that healthy Job Seekers can claim. They will have to pay higher Council Taxes and now their Income Tax Rates have doubled from ten to twenty pence in the pound.

Just shows Gordon and his party's true colours.......communist red

Why must 91Èȱ¬ pundits and copy writers bracket comments about '4x4s' with comments like "4x4 drivers who leer down at you in the Supermarket car park"? For the record I neither feel especially 'safe' or 'superior' in my 4x4.
Perhaps small car drivers have an inferiority complex.
If the impartial 91Èȱ¬ are intent on doing the eco-lobbyists job for them, please have the presence of mind to include those nasty, conceited drivers of certain German car marques, who always seem to consider it their born right to drop their children right outside school gate or cut me off at a junction. Being simplistic is not clever you know. As an aside my other car is a Korean shoebox, shipped all the way from KOREA in a polluting ship.

The taxation system has not been simplified Mr Evans, where did you get that idea? prey tell..

I'm not fooled for one second by this pathetic headline grabbing income tax cut. The figures speak for themselves.

I want to know why Gordon has failed to reform Inheritance Tax? Fiscal drag is one thing, day light robbery is quite another.

This is a terrible budget small business owners. Affecting over 90% of UK businesses, employing in excess of 80% of the UK workforce - we have been hit with a 3p tax increase, which means we'll be paying out an extra 16% of our profits.

This will in turn put direct pressure on jobs and salaries. The many business owners that receive mainly dividend income will see their earnings reduced by 16%.

I know that Evan Davis is a Brown super fan, but to call the budget ingenious and the tax changes logical is more akin to blind devotion!

The Chancellor is more of a charlatan than a genius. He promises much, attempts to trick us that he is handing back to us our money but manages to take more than he did previously.

As for the tax cuts, what tax cuts. Cutting the basic rate to by 2p by abolishing the 10% band is nothing more than a confidence trick. Those on low incomes will suffer most.

Corporation tax down by 2% but allowances are cut and worst of all, small businesses are made to pick up the tab.

Please Evan open your eyes and report things for what they are

Evan, I cannot believe that you are really THAT stupid as to have difficulty finding losers in this utter cynical farce of a budget. Are you hoping for a fatcat job as an advisor under a Brown premiership? I cannot think of any other reason that the 91Èȱ¬ is not announcing the Brown Budget as a Robin Hood in reverse budget. Stealing from the poor, to give to the rich. The corporation tax changes are stealing from the middle classes to give to the boardroom fatcats. The scrapping of the 10p band is kicking the poor where they can least afford it! This is more obscene and in-your-face selfish 'old fashioned tory' greed than even Thatcher demonstrated, and I liked her. Please Evan. let's have some HONEST reporting from the 91Èȱ¬ for a change and not this craven pro-Brown propaganda.

Have the figures factored in the cut in pensions that people pay net of basic rate tax. Either people will have to pay more or their effective contributions go down. Good job Gordon.
In other news, oil revenues falling fast due to the collapse in oil prices, and the economy only being propped up by the UK services being sold off to private companies and overseas. As long as the economy hangs on until the analogue TV spectrum can be sold off, the finances will survive for a few more years.
Its no way to run an economy by selling it off piece by piece.

Given that the so called tax cuts do not take effect until 2008/09, whta is the point in working out who is better or worse off NOW. There is another Budget to happen when the tax landscape will change again, with more stealth taxes.

What is certain my tax bill will rise in tax year 2007/08, this coming April.
Beer/Wine/Petrol/Green taxes oh yes NI and don't forget Council Tax.

The partime workers will be much worse off, you are better off with this chancellor being single and unemployed....

Finally, for the ordinary person saving for retirement his/her pension contributions will be worse off (lower rtax relief), higher rate not effected (as much). Just as Gordon Brown takes up his new post of PM in a 1/45th Final Salary Pension Scheme, which due to his new job entitles him to MAXIMUM BENEFITS after 1 DAY SERVICE in his role, hows that for equality!!

This budget supports my long held belief that this Govt and Brown will continue to seek rents ie allow one group in society to exploit another.
- an activity that has no net benefit to the economy or society - I call upon Mr Davies to look into this more.

1. Middle to high income earners are no worse off but at the expense of lower income earners - income inequality will continue to widen

2. Small busines pays for big business

3. PFI liabilty and its consequences overlooked

4. Public services vicious spiral will continue ie "efficiency" drives will create more demands on less resources, and with no more money coming in will reqie furher cuts in resources placing more demand on shrinking resources until we head into a 91Èȱ¬ Office type meltdown situation across Govt Depts, NHS, Education etc.

5. Brown's successor at no.11 is also in a bind because of the problems Brown has created and will continue materialise after he leaves - the succesor is in a no win situation and this also means a no win for the people.

5. Tories/Lib Dems are no better we now need a real alternative that has backbone and moral integrity.

All of which highlights the psychological game Brown has played ie provided headlines (note of changes that will happen later rather than now) because the real impact of the Budget (which in my view is negative) is too intricate to calculate so the press will latch onto the easy stuff as it always does.

Brown's last budget is true to form ie form over substance that makes things worse rather than better.

Everyone is missing a huge "poverty trap" which remains unaided by these measures.
Gordon Brown contends the tax credit system aids low earners - that is only true up to a point, ie. around £14,000 p.a. Above that, and one is clobbered. I employ somebody on £14K, who is a single Mum, getting tax credits. I cannot give her a salary increase as she will lose her credits. I would have to raise her salary by £10K before she can regain parity on where she is now.

It is completely dishonest of the Chancellor to suggest his budgetary measure sover the years have delivered improvements for all. He has done nothing to redress this appalling imbabalance for hard-working single parents, which he created.

I must admit I find the unrelenting hostility to this budget and Brown personally utterly mystifying.

Here are the figures from PriceWaterhouseCoopers (who I think we can trust):

Anyone earning between about £17,000 and £40,000 a year will be better off
Those earning less than about £17,000 will lose from the abolition of the 10p tax rate but they should more than claw it back from working tax credit

What is the problem with that? Really. How is that hammering Middle England or the poor?

Obviously, if you wanted big tax cuts, or big increases on the better off, you're going to be disappointed and I totally agree with the comments of carers, who clearly need more help. There is also the issue of the complexity of tax credits, which I think is a fair criticism, but overall it's pretty good, isn't it?

Put together with Brown's real achievement (and what has the biggest impact on working people's finances), 10 years of economic growth, low inflation and low interest rates, and it adds up to something very impressive indeed.

I believe the tax cut of the basic rate from 22% to 20% (or 2p as quoted?) doesn't really have a huge impact due to the lower rate being aboloished. However by removing the lower tax amount a low income could suffer slightly. It also may provide a sneaky way of raising it back to 22% over time, so then we all lose. Although these tax changes shouldn't take affect until 2009. I also think it's barmy to say the rich are getting all the benefits as you must remember they still pay 40% tax on part of their earnings which funds tax credits etc etc.). Also i'm not quite sure how pensioners claiming the state pension can complain as i won't even receive a state pension when i get to retirement age as the funding won't be there.

The whole of our tax system is of course a pile of ordure - even the Speaker says it in the House of Commons - "Ordure, ordure!". We had 2 income tax bands, then 3, now 2 again. We take away with income tax and give back with tax credits. Um, why not simply tax less, by upping the tax-free band? I could go on but my language might deteriorate...

"...green taxes rise by £1.4bn, which is used to pay for other personal tax cuts. All three parties now have policies to take us in that direction."

Surely additional revenue raised by green taxes should be used for green-friendly tax incentives or for government-funded green initiatives. Just introducing green taxation doesn't make a party "green". Grrrr!

No, Evan, its not just the better off
who are paying for the abolition of the tax rate; its the people without kids on less than £17000 a year. If you look at the graph on this site which looks at the effect on income of the tax changes (not including effects of tax credits), clearly there is a dip in fortunes coming up for those between £35K and £40K. But even this group will be slightly better off (even if childless)

Its the poor who are the losers and that is the straight fact! You mentioned this last night on the news. Why can't you say that here?

I wonder if the new tax regime that blatantly benefits higher earners as opposed to low income families is to compensate the would-be lords who can no longer buy their honours from the labour party - just a thought!

Also, why do they continually faff about with VED??? - why not simplify taxes even further - scrap another government computer system and tax the fuel directly!

"There will be losers - even if we can't identify them easily".

It's pretty easy to identify one obvious category of losers: small businesses. I guess we small businesses don't contribute the same sums to labour party funds as big businesses do, or maybe we'd have had our corporation tax cut too.