Political Editor UK General Election 2010 - Government's new tax and spending proposals

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Government's new tax and spending proposals

Brown’s ‘tax bombshell’ of higher National insurance, council tax & VAT – Rob Wilson and Alok Sharma express concern at effect of Labour’s tax plans on Reading

1st December 2008

Reading East MP, Rob Wilson, and Parliamentary Candidate for Reading West, Alok Sharma, responded this week to the Government’s new tax and spending proposals – the so-called Pre-Budget Report – by warning of Labour plans for higher taxes and record levels of public debt included in the small print.

Above-inflation hikes in council tax are to be forced on local authorities, with the Government planning for a 4.5 per cent increase, which would push up the typical bill up by £62 a year on family homes from this April.

National Insurance will be increased for workers and for local firms. This jobs tax will discourage businesses from hiring staff, and means that anyone earning £20,000 a year or more will be worse off under the Pre-Budget Report.

National debt will hit £1,000,000,000,000 (one trillion pounds), forcing even higher taxes in due course to pay back the nation’s overdraft and plans are being drawn up by the Government to increase VAT to 18.5% after the next general election, with Gordon Brown even considering a hike to 20%. This would add £500 a year to families’ shopping bills.

By contrast, Conservatives are advocating a series of alternative measures to help beat Labour’s recession, including freezing council tax for two years by cutting wasteful Government spending, reducing employment costs for small businesses by cutting National Insurance and through a tax break for new jobs, and getting credit flowing by guaranteeing lending to businesses.

Rob said, “Labour’s Pre-Budget Report is stuffed full of tax cons rather than tax cuts. Gordon Brown’s tax plans aren’t about helping our economy, they’re just intended to help him cling on to power. I am very concerned about the effect of record levels of debt, higher council tax and higher National Insurance on families and firms in my constituency with the prospect of large hikes in VAT around the corner.”

Alok Sharma added, "Labour inherited a very healthy economy and sound public finances from the Conservatives in 1997 but every Labour Government in recent memory has ended its days having bankrupted the country and sadly this time will be no different and as usual, the Conservatives will have to clear up Labour's mess. The choice for the British public at the next election will be clear: higher debt and tax rises from the Labour Party, or restraint and permanently lower taxes from the Conservative Party."

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