Budget 2010: Darling's new tax rises

The nice little earners Darling is planning for today's Budget.

As Alistair Darling prepares to battle his way across a picket line to deliver the Budget, what new information can we expect on tax rises and spending cuts?

The huge cuts to public spending (£38bn) needed to halve the deficit by 2013-2014 won't be unveiled until after the election, and ministers insist that previously announced tax rises will raise £19bn in new revenue.

But last week Peter Mandelson broke ranks to admit that further tax rises may in fact be necessary, and we're likely to learn of some of them today.

It looks like Darling has resisted pressure from cabinet colleagues, including Ed Balls, to reduce the threshold for the new 50p tax rate from £150,000 to £100,000, but new tax rises on the rich can't be ruled out.

It also looks like our old friend "fiscal drag" -- not adjusting tax thresholds for inflation -- will be making an appearance.

If adjusted for inflation, the personal allowance should rise to £6,669, but freezing it at £6,475 will bring in an extra £1bn for the Treasury and mean an extra £40 in tax for every taxpayer.

Darling is also expected to freeze the threshold for the 40p rate at £43,875, rather than raise it in line with inflation to £44,995, netting the Treasury an extra £450m.

Elsewhere, the FT reports that the banks will face "new taxes" and that Darling will confirm the government's support for a global bank levy.

Labour's deficit reduction plan, based on a ratio of 67 per cent spending cuts to 33 per cent tax rises, is currently the most progressive (the Tories favour an 80:20 split and the Lib Dems -- remarkably -- support a 100:0 ratio) and it'll be worth watching to see if the tax element of that rises today.

Meanwhile, I wonder how full the Labour benches will be this afternoon. A number of MPs from the left of the party are planning to miss the Budget rather than cross the PCS picket lines.

Follow the New Statesman team on Twitter.

George Eaton is political editor of the New Statesman.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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