Like the balmy Bank Holiday weather, the Government’s package of assistance for those caught in the worst economic slowdown for a generation was bound to end some time. One would have hoped it might taper off once we were out of recession, but it’s slowly unravelling before our very eyes. To be fair, it’s being slowly but surely unravelled by Gordon Brown’s administration, probably in the hope that we won’t notice. Once again, measures which looked vaguely useful – the car scrappage scheme, reduction in the rate of VAT, the suspension of Stamp Duty on houses between £125k and £175k, Business Rate relief and an increase in first-year capital allowances – all these headline-grabbing ideas will bite the dust in a return to revenue generation for Brown and his cohorts.
Despite protestations from economists, bankers and business organisations, once again Number 10 (or more precisely Number 11) knows best, and the changes look set to stretch out the recession in the UK for some time to come.
So get ready; tomorrow the rate of fuel excise goes up by two pence, meaning for every pound you squirt into your car, the Government takes no less than 65 pence in duty, raising over a million pounds extra a day in tax. From New Year’s Day next year VAT will rise from the much-vaunted 15% back up to 17.5% (what’s that I hear you cry – “…And the rest”?) and on the same day Stamp Duty between £125,000 and £175,000 will be reintroduced. And from March 2010 the Car Scrappage Scheme which was meant to inject much-needed demand into the UK car industry will also cease.
So thanks Gordon – it was nice while it lasted. It seems somehow perverse to raise taxes and scrap measures which encourage spending in the teeth of a recession, but we can all relax, because the Government tells us they need our cash to ‘consolidate public finances’.
Maybe if you hadn’t wasted so much of our money bailing out those grasping, avaricious ‘Masters of the Universe’ in the City of London we could have hung on to a little more of our hard-earned cash…