Rowen Slams Chancellor's Pre-Budget Report

Paul Rowen, MP for Rochdale, has criticised the Chancellor's Pre-Budget Report for being full of political posturing rather than a coherent plan for economic recovery. The Pre-Budget Report was published yesterday by Alistair Darling.

The Chancellor has used far-fetched growth forecasts to back up public spending plans. We need public spending to lift us out of recession, but it is irresponsible to announce increased spending for 2011-12, 2012-13 and 2013-14, taking us far outside of our economic means.

The Chancellor also proposed a 0.5% increase in National Insurance, on top of the 0.5% increase announced last April, which amounts to a 2% increase in tax on workers. A 1% increase in National Insurance on employees means that by 2011/12 people earning over £7,000 will pay 32% tax on their income.

The much trailed bankers bonus tax levied on bonuses over £25,000 until April 2010 is a token gesture, and is wide open for tax avoidance. It will only raise around £500million out of the £5billion worth of bonuses expected to be paid this year.

The Government have announced a 1% public sector pay cap for two years starting in 2011. With inflation predicted to be at least 2.5% next year and 3.5% in the following year, this will amount to a real terms pay cut for public sector employees.

Paul Rowen said: "Alistair Darling couldn't face up to the hard decisions needed to get this country back on the road to recovery. Instead, he used far-fetched growth figures to back up proposals that were more in line with an election manifesto. We need a Chancellor who is honest and realistic about tackling the structural deficit and balancing the books.

Rather than making things fairer for the people of this country, these proposals will hit people on low and middle incomes. The Government's plan will hit the poorest the hardest, while some one on £15,000 will only see their pay rise by £150 some one on £150,000 will see their pay increase £1,500."