An unnecessary reduction

You have noticed that this blog is becoming a little cynical about the government's attempts to mitigate the impending financial gloom.

You would be correct.That doesn't mean that we agree with the Cameron view of do nothing.Far from it it fact there may be a case for greater and more controlled intervention.

But what will not help is the tinkering around with financial tools and none more so than the 2.5 per cent decrease in VAT.

Over at Westminster Blog,Jim Pickard reports on the comments of former GOAT Digby Jones who says

“The accent in the pre-budget report was on stimulation of the consumer. However, regardless of a VAT reduction, people will not go shopping for big-ticket items when they are out of work.”

In my opinion,all this has done is create a great deal of confusion and administrative mess for companies.The fact that retailers are already discounting prices well below the 2.5 per cent shows the reality of the situation.

An unnecessary reduction which will be paid for in future years

Populus Poll suggests public aren't so sure about the governemnt's tactics over recession

This morning's Times carries a one off populus poll that suggests that the public are not quite as behing the government's reflationary package as some might think.

According to the paper

Since the last Populus poll on November 7 to 9, Mr Brown has dropped sharply as the best leader “right now, to deal with Britain’s economy in recession”, from 52 to 42 per cent, with a big fall among the middle classes. But he is still ahead of David Cameron, on 36 per cent, up four points. Mr Cameron is still ahead, by 41 to 33 per cent, as the preferred leader to take Britain forward after the next election.

and Peter Riddle suggests that

the public remain unsure about why the economy has deteriorated so quickly, as well as about whether the Government’s response will work.

The VAT Squabble

The row over VAT is going to make both PMQ's and this afternoon's debate on the PBR quite interesting.

It seems that the release of the document was a complete cock up.Sure the government was considering all options for getting public borrowing back into line after the economy starts to grow but raising VAT with all its implications was dismissed,probably at the last minute

It is reported that Alistair Darling is fuming over the Tory reaction and launching this afternoon's debate he plans to accuse the opposition of scaremongering

RIP New Labour

I see that in this morning's Sun George Pascoe Watson has written the Obituray to New Labour

THE tragic death of New Labour has been announced in No 10, Downing Street.
New Labour passed away after a 14-year battle with socialism.
The lethal disease was thought to have been eradicated in Britain.
But New Labour was unable to fight off the killer condition which has claimed the lives of previous Labour governments.
The last rites were performed by Gordon Brown and Alistair Darling in the House of Commons on Monday.
New Labour died after a fatal dose of tax rises, plans to nationalise the entire banking system and £1trillion of debt.
Its heartbroken father, Tony Blair, was too upset to comment.

Does the opposition have a point.

Update-there will now be a debate on the Pre Budget report.The speaker has announced it will take place tomorrow afternoon

Yesterday's Pre Budget statement was just that,a government statement and thus the Commons does not get to vote on any of the measures.

Usually of course the statement is just that,but yesterdays was more of a full blown budget.

John Redwood makes us aware of this debate in the House

Mr. John Redwood (Wokingham) (Con): As we have just heard a pre-Budget report that turned out to be a Budget with an urgent and big tax change, will the Minister give us guidance from the Treasury Benches on how soon we will be able to debate and vote on the huge VAT change? It is very unusual to have a Budget, yet not be able to proceed to a Division on it.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I do not see the relevance of that point to the motion before the House.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): On a point of order, Mr. Deputy Speaker. My right hon. Friend the Member for Wokingham (Mr. Redwood) none the less raises an important point on which I would like your guidance. We have effectively just had a massive Budget—bigger than many of the real Budgets through which I have sat over the past 25 years, all of which have been followed by five days’ debate. Have you received any indication, Mr. Deputy Speaker, that there is to be a change in House business to allow us to debate that Budget, or is democracy at an end in this place?

Welcome back Boris

I have just been reading Boris Johnson in this morning's Telegraph.

You know what, I have now heard more than enough about how much Gordon Brown is enjoying this recession. Every time you read about the Prime Minister, they tell you that his mood is getting better and better.
Having been known as a gloomy old nail-biting misery-guts, he is now presented to us as a man "in his element", the life and soul of the party, a smile or a witty aside never off his lip

writes Boris

and his description as he comments on yesterday's Pre Budget report?

He is like some sherry-crazed old dowager who has lost the family silver at roulette, and who now decides to double up by betting the house as well. He is like a drunk who has woken to the most appalling hangover, and who reaches for the whisky bottle to help him dull the pain.

Osborne comes up smelling of roses

All the talk of the Pre Budget report seems to be og George Osborne who by all accounts made the speech of his life.

Regardless of the content he spoke not like a man close to the edge but one quite literally brimming with confidence.

Over at Conservative Home,they say that

George Osborne's response to the boomerang budget was outstanding. He showed genuine anger at the failure of Brown to prepare us for these difficult times.

Iain Dale meanwhile tells us

George Osborne gave a very strong performance today with some great attack lines. He received good support from Tory MPs and Labour MPs seemed surprised that his attacks were hitting home so well. If his position was in danger (which it wasn't!) it certainly isn't now. I just had a phone call from an MP friend of mine (not a Conservative) who said: "This wasn't George Osborne. It was Ozzy Osborne - drawing blood!"

And Iain Martin says

Whatever it was that David Cameron put in George Osborne's tea today, it certainly worked.
The Shadow Chancellor's attack on Gordon Brown and Alistair Darling was absolutely blistering and his best Commons performance to date.

Live Blog-The Pre Budget report

16.23 Above inflation increases in the pensioners credit and an increase in pensions based on the highest inflation rates.Every pensioner to get a on off payment of £60 in January

16.22 Governemnt is still committed to eradicating child poverty

16.20 for can owners from 2010 the differential rates for cars will come in but a maximum of £30 for the most polluting cars

16.17 There are still 500,000 unfilled vacancies according to the Chancellor

16.14 welcomes commitment to lenders to help homeowners who get into difficulties with a 3 month grace

16.13 Now we move to mortgages and repossessions-new panel to be set up to monitor lending by the banks

16.11 the recession shouldn't get in the way of green policies

16.10 Threatens the eneergy companies with statutory forces if they do not bring down prices in line with falling costs

16.09 £100m in new money and bringing forward £50m for home insulation

16.07 Camera pans to a very nervous looking Douglas Alexander-Wonder why

16.06 losses of up to £50,000 can now be offset over profits for 5 years

16.05 £4b deal with European banks to support small business's-also a temporary small business scheme is being brought in and from Jan a temporary facility throiugh the export guarantee scheme.

16.03 All business being allowed to spread payments of all taxes through next year

16.02 Temporary relief on empty property rates

16.00 More laughter as he says he will balance the budget bu 2015-6 Shouts of you wont be here then

15.54 Typical my wireless connection has just gone down-back up to here him saying by 2011 with growth beginning to increase all rates of NI by 0.5% but a bottom ceiling of £20,000.New rate of tax 45% on earnings over £150k and will withdraw personal allowence anomolies on incomes between £100-149K

15.48 all the reasons why government income is falling and why borrowing will be higher (£78b this year,£118b next year 7% of GDP)-Footsie is up over 300 points

15.46 Now bamboozling us with figures which show how the country has kept within the fiscal rules up to now.But now he is setting a temporary operating rule( more laughter from the opposition benches)

15.44 Darling will do whatever it takes to help families

15.42 Now for the forecasts..........output will recover after 2nd quarter of 2009,inflation at 0.5%,UK economy will grow 0.5% in 2010 and in future years 2-3%!!!!!

15.40 But beacause of our position in the global financial market we are going to be effected

15.38 The phrase that the UK economy faces the recession from a position of strength leads to an eruption as does him telling the House that they did fix the roof

15.35 The speaker has had enough and tells Tory Michael Fabricant to keep quiet

15.34 More laughter as he mentions banking stiffer banking regulation

15.33 More oppostion groans as Darling mentions the phrase "Global problems"

15.31 Much laughter from the opposition benches as he talks of the country living within its means

15.30 Chancellor on his feet,spot on time

15.28 Eyes down then for the most previewed Pre Budget report ever

Hunt on for the Tory? mole at the Treasury

Sam Coates reckons the hunt is on for the treasury mole over at Red Box

proper Budget leaks are usually no laughing matter, and there's mystification at the Treasury at seeing their details out a day early.
This may have been a government operation. But surely - surely - it can't have been in their interest to have had the two main planks of Alistair Darling's PBR - the VAT cut and new top rate of tax - splashed over the Sunday and Monday papers. After all, it spoils the surprise and gives the opposition more chance to work out their response.

And rumour has it that it may have been a Tory