This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/8405028.stm
The article has changed 17 times. There is an RSS feed of changes available.
| Version 7 | Version 8 |
|---|---|
| NI rise 'will lead to NHS cuts' | NI rise 'will lead to NHS cuts' |
| (30 minutes later) | |
| The government's plan to raise National Insurance by an additional 0.5% "will lead to a real cut in health spending", the shadow chancellor has told the BBC. | The government's plan to raise National Insurance by an additional 0.5% "will lead to a real cut in health spending", the shadow chancellor has told the BBC. |
| George Osborne said it was "nonsense" for ministers to say they could raise NI and protect NHS budgets because the health service is such a big employer. | George Osborne said it was "nonsense" for ministers to say they could raise NI and protect NHS budgets because the health service is such a big employer. |
| He said the tax would leave the NHS with a £446m-a-year bill. | He said the tax would leave the NHS with a £446m-a-year bill. |
| The government said "difficult decisions" had to be made in order to reduce the UK's £178bn deficit. | The government said "difficult decisions" had to be made in order to reduce the UK's £178bn deficit. |
| 'Huge bill' | 'Huge bill' |
| In his pre-Budget report on Wednesday, Chancellor Alistair Darling said there would be a 0.5% rise in National Insurance and a 1% cap on public pay settlements from 2011. | In his pre-Budget report on Wednesday, Chancellor Alistair Darling said there would be a 0.5% rise in National Insurance and a 1% cap on public pay settlements from 2011. |
| The increase, limited to those earning more than £20,000 a year, will hit about 10 million workers. | The increase, limited to those earning more than £20,000 a year, will hit about 10 million workers. |
| According to Treasury estimates, someone earning £30,000 will be £90 a year worse off and someone on £40,000 will be £190 worse off, while someone earning £10,000 a year will be £110 better off. | According to Treasury estimates, someone earning £30,000 will be £90 a year worse off and someone on £40,000 will be £190 worse off, while someone earning £10,000 a year will be £110 better off. |
| KEY POINTS OF PBR National Insurance up by a further 0.5% from April 2011Economy to shrink by worse than expected 4.75% this yearNew 50% tax on banker bonuses1p rise in corporation tax for small firms scrappedTax rebates for electric cars and wind turbinesState pension to rise by 2.5% At-a-glance: The key points Pointers for election fight Nick Robinson's view Q&A: What it means to you | KEY POINTS OF PBR National Insurance up by a further 0.5% from April 2011Economy to shrink by worse than expected 4.75% this yearNew 50% tax on banker bonuses1p rise in corporation tax for small firms scrappedTax rebates for electric cars and wind turbinesState pension to rise by 2.5% At-a-glance: The key points Pointers for election fight Nick Robinson's view Q&A: What it means to you |
| But Mr Osborne said it was public services - and the NHS in particular - that would suffer because the government was the country's biggest employer. | But Mr Osborne said it was public services - and the NHS in particular - that would suffer because the government was the country's biggest employer. |
| "When they say they are protecting NHS spending what they don't tell you is that the NHS is probably going to have the largest National Insurance bill as a result of this tax change - a £446m bill," he said. | "When they say they are protecting NHS spending what they don't tell you is that the NHS is probably going to have the largest National Insurance bill as a result of this tax change - a £446m bill," he said. |
| "So the idea that Labour was presenting yesterday that they can protect the health budget and increase National Insurance is a nonsense... it will lead to a real cut in health spending." | "So the idea that Labour was presenting yesterday that they can protect the health budget and increase National Insurance is a nonsense... it will lead to a real cut in health spending." |
| Ministers said their target of halving the deficit by 2013 meant "difficult decisions" but insisted that 60% of the burden of extra taxes would fall upon the top 5% of earners. | Ministers said their target of halving the deficit by 2013 meant "difficult decisions" but insisted that 60% of the burden of extra taxes would fall upon the top 5% of earners. |
| The NI increase - which will raise about £3bn a year - has angered the business community, which says it is a tax on jobs when the focus should be on economic recovery, and unions, who say there could be "problems" if it goes ahead. | The NI increase - which will raise about £3bn a year - has angered the business community, which says it is a tax on jobs when the focus should be on economic recovery, and unions, who say there could be "problems" if it goes ahead. |
| Unison leader Dave Prentis said: "We know the extent of the problem but we believe that it's got to be tackled in a fair way, and not in a way that says: 'People who pay tax every week, people who we can get our hands on, they will pay.' | Unison leader Dave Prentis said: "We know the extent of the problem but we believe that it's got to be tackled in a fair way, and not in a way that says: 'People who pay tax every week, people who we can get our hands on, they will pay.' |
| "It's the poorer public service workers that pay the price." | "It's the poorer public service workers that pay the price." |
| Halving the deficit | Halving the deficit |
| Labour forecasts for future economic growth - which will influence the amount it has to borrow and how quickly the deficit is cut - have been questioned after the chancellor was forced to revise earlier figures. | Labour forecasts for future economic growth - which will influence the amount it has to borrow and how quickly the deficit is cut - have been questioned after the chancellor was forced to revise earlier figures. |
| In his statement, he said the economy was likely to contract 4.75% this year - far worse than the 3.5% decline predicted in April - while borrowing would be £3bn higher than earlier estimated. | In his statement, he said the economy was likely to contract 4.75% this year - far worse than the 3.5% decline predicted in April - while borrowing would be £3bn higher than earlier estimated. |
| But Treasury minister Stephen Timms denied the tax rises and spending cuts outlined were a "drop in the ocean" compared to what was needed. | But Treasury minister Stephen Timms denied the tax rises and spending cuts outlined were a "drop in the ocean" compared to what was needed. |
| HAVE YOUR SAYIt makes me angry that bankers will get bonuses when the public sector, who work with the most vulnerable members of society, will receive pay-cuts Rachel Gilroy, Crawley Send us your comments | |
| Mr Timms said he was confident the economy would return to growth by the turn of the year. | Mr Timms said he was confident the economy would return to growth by the turn of the year. |
| Mr Darling also unveiled a one-off tax on bank bonuses over £25,000, to be paid by the firms rather than individuals, which he said would raise £550m. | Mr Darling also unveiled a one-off tax on bank bonuses over £25,000, to be paid by the firms rather than individuals, which he said would raise £550m. |
| Writing in the Wall Street Journal on Thursday, Prime Minister Gordon Brown and French President Nicolas Sarkozy propose a global one-off tax on the bonuses. | Writing in the Wall Street Journal on Thursday, Prime Minister Gordon Brown and French President Nicolas Sarkozy propose a global one-off tax on the bonuses. |
| The article, calling for a global change in financial markets' operation, argues that bonuses this year are partly the result of governments' support for the banking system. | The article, calling for a global change in financial markets' operation, argues that bonuses this year are partly the result of governments' support for the banking system. |
| The Conservatives, who will launch a new advertising campaign on Thursday warning of Labour's "debt crisis", said projected borrowing of £789bn over the next six years was unsustainable. | The Conservatives, who will launch a new advertising campaign on Thursday warning of Labour's "debt crisis", said projected borrowing of £789bn over the next six years was unsustainable. |
| Ministers had failed to lay out a credible plan for how they would pay this back, they added, "cynically" ducking tough choices until after the election - which must be held by June 2010. | Ministers had failed to lay out a credible plan for how they would pay this back, they added, "cynically" ducking tough choices until after the election - which must be held by June 2010. |
| "They have not included anything of significance they are going to do," said shadow Treasury minister Philip Hammond. "They had an opportunity to do it and they have blown it." | "They have not included anything of significance they are going to do," said shadow Treasury minister Philip Hammond. "They had an opportunity to do it and they have blown it." |
| 'Gesture politics' | 'Gesture politics' |
| Labour insist that schools, hospitals and the police will be protected from future cuts unlike under Tory proposals which would see the deficit cut faster and further. | Labour insist that schools, hospitals and the police will be protected from future cuts unlike under Tory proposals which would see the deficit cut faster and further. |
| The Tories have also accused the government of cynicism over apparent benefit rises. | The Tories have also accused the government of cynicism over apparent benefit rises. |
| Mr Darling said that planned 1.5% rises in child and disability benefits would be brought forward to 2010 because the low inflation rate would otherwise have led to the benefits being frozen this year. | Mr Darling said that planned 1.5% rises in child and disability benefits would be brought forward to 2010 because the low inflation rate would otherwise have led to the benefits being frozen this year. |
| But think tank the Institute for Fiscal Studies said pre-Budget documents suggested this would need to be funded by cuts a year later. | But think tank the Institute for Fiscal Studies said pre-Budget documents suggested this would need to be funded by cuts a year later. |
| Vince Cable: ''We all have to be much more honest with the electorate'' | |
| The government says extra help is being offered when it is most needed, but the Tories said the public would not be fooled. | The government says extra help is being offered when it is most needed, but the Tories said the public would not be fooled. |
| Families and disabled people would be disappointed to learn the benefits increases would lead to real-term cuts later, they said. | Families and disabled people would be disappointed to learn the benefits increases would lead to real-term cuts later, they said. |
| The Lib Dems said the money raised by tax rises and spending cuts would be used to support spending next year not to reduce the deficit, arguing the plans were "built on sand". | The Lib Dems said the money raised by tax rises and spending cuts would be used to support spending next year not to reduce the deficit, arguing the plans were "built on sand". |
| Treasury spokesman Vince Cable branded the tax on bank bonuses "pure gesture politics", saying the measure had "more holes in it that a cheese grater". | Treasury spokesman Vince Cable branded the tax on bank bonuses "pure gesture politics", saying the measure had "more holes in it that a cheese grater". |
| "We were able to identify several obvious ways in which bankers could not pay it - if they convert their bonus into salary, if they defer the bonus, if the payments are made in kind," he said. | "We were able to identify several obvious ways in which bankers could not pay it - if they convert their bonus into salary, if they defer the bonus, if the payments are made in kind," he said. |
| "Any half-competent tax accountant can find a way round this." | "Any half-competent tax accountant can find a way round this." |