The rumour mill is pulling 24/7 shifts. In recent days, newspapers and newswires have turned into gossip columns devoted exclusively to Alistair Darling’s Pre-Budget Report. If the rumours are true, which is a huge assumption, Darling will not offer the taxpayer a pre-election lolly-pop besides deferring the Age of Austerity until 2011, by which time he will probably be out of office.
If Labour’s 1992 manifesto was a tax bombshell, then by all accounts this PBR will be like Dresden. Everyone, both rich and poor, is in the firing line, and there is no space here to analyse every alleged proposal.
Darling looks likely to prolong the VAT cut until at least February, but Smith and Williamson expect VAT to rise to 20 percent in 2011. Each percentage point rise will generate £4.5bn in extra revenue, so a VAT hike is desirable and the Tories will almost certainly make a similar
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