Osborne: Britain on verge of bankruptcy
FURIOUS Shadow Chancellor George Osborne today declared that Britain was on the verge of bankruptcy.
He said that the country was sitting on a "huge unexploded tax bombshell" and was heading towards a £1 trillion national debt.
He said: “That is the bill for Labour’s decade of irresponsibility."
Alistair Darling announced today in his pre-Budget report that he was slashing VAT by 2.5 per cent in a £20 billion cash boost to revive the ailing economy.
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But Osborne said the UK economy was doomed and that Darling was giving away £20 billion but taking back £40 billion through tax hikes, including a National Insurance rise - which Mr Osborne described as a “tax on jobs”
And he added that Prime Minister Gordon Brown’s promise to end boom and bust had proved “one of the greatest deceits ever told to the British public".
In one of the most radical Budget announcements in living memory, Chancellor Darling announced that he was cutting VAT from 17 per cent to 15.5 per cent.
He also upped the income tax rate for high earners - with those earning more than £150,000 being taxed at 45 per cent.
But the Chancellor said the give-away would have to be paid for with increases in duty on petrol, alcohol and tobacco.
National insurance will also go up.
The Chancellor warned the Commons that borrowing would rise to £118 billion as the Government ensured that money flowed into the economy when it was needed.
He also forecast economic output of just 0.75 per cent during 2008 - compared to his March forecast of between 1.75 per cent and 2.25 per cent.
The City gave an enthusiastic welcome to the announcement, with shares rising 9.85 per cent - the biggest one-day rise ever.
Mr Darling said the cut in VAT will come into effect next Monday and continue for 13 months.
He urged retailers to pass on the cut to shoppers.
He said; “This temporary reduction is the equivalent of the Government giving back some twelve and a half billion pounds to consumers to boost the economy.
“It will make goods and services cheaper and, by encouraging spending, will help stimulate growth.”
There was also a boost for pensioners and families with children with Mr Darling announcing an increase in child benefit in January, three months early.
And every pensioner will get a one-off payment of £60, on top of the £10 Christmas bonus, also from January.
Mr Osborne said the Chancellor’s statement was “confirmation of the time-old truth - in the end all Labour chancellors run out of money and all Labour governments bring this country to the verge of bankruptcy”.
He accused Mr Brown of playing politics with the timing of his benefits and the delay in implementing the tax rises.
