David Cameron has announced his big new plan to tackle the recession. He's going to increase the personal allowance for pensioners by £2,000 a year and make abolish basic rate tax on savings income
There's only one good thing to say about this plan: the man has clearly shown his true colours.
The fact is that there is no way we can save our way out of a recession: we can only spend and work our way out of one. But Cameron clearly sees it otherwise. He wants to help savers and cut government spending, both moves guaranteed at this time to reduce economic activity and so deepen the recession and encourage deflation. as an economic policy it's incompetent in the extreme.
It's also inept social policy. It helps those who already have wealth, and not the jobless. It helps the tax avoidance industry. It helps bankers. And whilst it will help pensioners (to which I do not object) it does not help those in society suffering paying their mortgages, who candidly may be in much greater need. As a result it appeals to every Tory agenda: wealth, tax abuse, undermining the economy and increasing the gap between rich and poor. Fabulous.
And let's just think for a moment about how this complicates the tax system. Can't you just imagine the acres of legislation this will require? That's also blown the tax simplification agenda apart, forever.
Not a good move David, not a good move at all.