Friday 19 December 2003

Come back Jim Callaghan, all is forgiven

Well maybe not, but it is looking rather like the 1970s again:
The International Monetary Fund says the Chancellor’s gamble that tax revenues will rise enough to pay for an extra £34 billion in borrowing over five years could backfire.

It accuses him of being over confident that the growth will produce enough extra cash to put Britain’s finances back in the black.

It's just as well that the Conservative "opposition" sees what's wrong with the economy, isn't it? But what's this:
The attack came as the Tories claimed that thousands more key public sector workers will find themselves sucked into paying the top 40 per cent rate of tax in the next ten years and find themselves forced to pay for Mr Brown’s "wasted" spending.
There are two things to note here. First, as I have written before, public sector employees don't actually pay any tax at all - their income tax is merely a bookkeeping entry in the government's accounts. The net pay of state workers is extracted by taxes (forcibly) levied on those who work in the private sector. Second, just how many government employees are going to vote Conservative anyway? It is in the class interest of public sector workers to increase the state's exploitation of the productive private sector. Surely the hapless Mr Letwin should be speaking on behalf of overtaxed non-state workers if the Tories are going to get anywhere.