Economic Storms Begin - Worcester News

Earthquakes, floods, wild storms - the British Isles have taken quite a battering in the past few months, but now the storms are turning economic.

Over the last ten years of excellent worldwide economic weather, the government could and should have prepared the country's finances for tougher times. But they didn't and as a result the UK - unlike the other countries of Western Europe -is ill-prepared to weather any economic storm that might hit.

Last week's Budget revealed the extent of the problem. Growth forecasts were slashed and borrowing was raised beyond all predictions. The budget deficit is 3% of GDP - the worst of all industrial economies, with the exception of Pakistan, Egypt, and Hungary.

Oh, and surprise, surprise, our taxes went up too. People now face paying the highest tax on alcohol for a generation - an increase of 1.6bn over the next three years. Yet these taxes are not attacking the scourge of binge drinking - a problem we all see on the streets of Worcester and our other towns at the weekends. Instead, the vast majority of law-abiding, responsible people will be worse off when they go for a quiet drink with friends, or unwind at home with a glass of wine. These taxes are also very bad news for a lot of local pubs too.

I actually stayed awake during Alistair Darling's profoundly dull budget - but there were quite a few nodding heads on his own side. He really only cheered us all up when he promised an increase in Winter Fuel Allowance. Sadly, this welcome support for pensioners has every sign of being a one-off gimmick, while the tax increases will roll on from year on year.

For me the most scandalous part of the Budget is that it stuck with a mean-spirited proposal from Gordon Brown last year - scrapping the 10p tax rate. Hard working people on low incomes will find themselves significantly worse off. Surely these are the people the tax system should be helping?

Just as the Government announces measures to get those in incapacity benefit back to work, it imposes high taxes on low-income earners. We are all paying the price for Gordon Brown's failure to fix the roof when the sun was shining.

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