Pre-budget report hopes to get people spending again
6:24pm Monday 24th November 2008
Comments (3)PLANS the government hopes will drag the country out of the credit crunch were unveiled today.
Chancellor Alistair Darling stood up in the House of Commons and delivered the pre-budget report, which set out a raft of measures designed to get people spending money again.
One key measure unveiled is a reduction in the rate of Value Added Tax (VAT), from 17.5per cent to 15 per cent from next Monday, December 1.
The move could lead to prices being slashed in many high street stores, although it remains to be seen whether struggling retailers will pass the savings on to customers.
People earning more than £150,000 per year will also be hit with a new rate of income tax, with 45p in every pound they earn going to the Government from April 2011, to help the government repay the extra money they are going to borrow to finance an increase in public spending.
The amount of National Insurance businesses and employers pay will also increase by 0.5 per cent, although Mr Darling promised this would not mean an increase for anyone earning less than £20,000.
Other plans outlined in the speech included an increase in pension credits by six pounds a week for single people, and nine pounds for couples, and a one-off payment of £60 in January.
Controversial changes to car tax rates will also be phased in, so people driving more polluting or older cars will not be hit with a big increase next year.
There will also be £3bn invested in schemes including increasing the amount of social housing being built, and improving capacity on the motorways.
What do you think of the measures? Will they encourage you to spend more money in the shops?
Leave your comments below.
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Richard_at_Harrow, Harrow says...
9:20pm Mon 24 Nov 08
Noolaba claims its income-tax changes will affect only the top 1 per cent of earners, but its changes to national insurance will affect many more people.
From April 2010, NI will go up by 0.5 per cent to 11.5 per cent on earnings up to around £44,000 and to 1.5 per cent above that. Put another way – your NI payments will increase overall by 4.54%.
APD will increase to £170 for long haul flights. That’s £680 in tax alone for a family of 4 to fly long distance.
This Government disaster will cripple government finances till 2015/16 - i-e this lot have buggered up the next 2 parliamentary sessions.
If there is anyone out there who still supports this pathetic government – then you really should return to your village – the one missing an idiot.
Richard_at_Harrow, Harrow says...
9:55pm Mon 24 Nov 08
"This is a double whammy," said Mike Warburton, of accountants Grant Thornton, "and the effect will be to take an extra £548 a year away from someone earning £44,000 – that's an increase of 14pc in this tax and a hidden sting in the tail.
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Richard_at_Harrow, Harrow says...
7:43pm Mon 24 Nov 08
APD stays - they call it a green tax - but the livestock industry which creates 9 times more greenhouse gases then aviation doesn't pay a penny in CGD (Cow Gas Duty). It's a stealth tax in all but name.
Darling keeps referring to low Government debt but I am not sure whether like the Banks and their toxic loans he is ignoring the £100b of off-balance sheet PFI debt. It’s government debt in all but name.