8 Reasons to Dislike the PBR

OK- I've just noticed Adam Price has beaten me to it with a PBR reaction. I haven't read his yet and hopefully I'm not just reiterating what he has already observed. (I expect his observations are acuter than mine. He was there live after all :-) )

My main take on it, as a layperson, is that despite welcome fiscal stimulations and interventions the report neglects and fails the needs of Wales and of
the vast majority of taxpayers across the UK in key areas.

This is a bit suprising. We were led to believe through the numerous leaks beforehand that radical things were afoot. But what we have is a report that offers only crumbs to working people. The mainstream media of course paints it differently. They seem to think that Brown and Darling have embarked on a gamble just short of the sort of radicalism exhibited in early revolution Cuba, even if the CBI themselves welcomed the report this morning. Don't be fooled though-

Spin aside these are the key facts:

1. Growth in public spending is actually set to slow from 1.8% to 1.2 %
2. VAT decreases have grabbed headlines. But the effects of this in the pocket are negligible, crucially there is no need for retailers to pass the decrease onto consumers. Even the lowly 2% decreases may not be reflected in prices. Re-instating the 10% tax band for lowest earners would have had a much more tangible benefit. This, however, is not on the cards.
3. The increase in income tax for highest earners, which should have happened back in 1997, is dated to after the next election. So if Labour lose the next general election the increase will be postponed or reversed by the likely Tory victors.
4. The planned increases in national insurance contributions will hit middle income earners and small businesses hard.
5. Of the £3 billion set aside for public works only £100 million is set aside for green projects. This is a massive missed opportunity. If there was any good side to this recession it was the opportunity to substantially 'green' our economy. It is likely more money will be set aside to increase motorway capacity than for green energy
projects.
6. Big business sees almost immediate benefits with a tax holiday for foreign dividends planned from 2009. Basically there is no tax reduction or exemption for the poorest, but for the rich who spend outside our economy.
7. There is no mortgage relief fund. The 3 month delay before repossession proceedings is good- but any homeowner who finds themselves long term unemployed, or under long term financial pressure, will still be at risk from repossession.

Last but by no means least-

8. There is no new money for Wales. Despite Welsh unemployment rates rising and house prices falling among the fastest in the UK there is no additional help earmarked specifically for Wales. We must instead restructure, if deemed necessary, under the unjust confines of the Barnet formula.

New Labour may have broken fiscal rules, and this was totally necessary under the circumstances. But as ever they are short of innovation. This is because Brown and Darling don't have a genuine social democratic bone to rub between them, let alone a socialist one.

When the first increase in income tax for the highest earners is postponed for at least another 3 years, and we are told that is re-distribution, it sums up the full extent of the neo-liberal crisis we are still in the midst of. New Labour seem to be stage managing the financial crisis by making overtures to the left- while making no meaningful ideological break with the past.

The Tories response to the current crisis meanwhile: Do Nothing.

Right- I'm off to read Adam Price's more immediate reactions. I suggest, if you have not already done so- to do the same....