Brown's tax rises have hit economy, says BOE governor
Discussion
The truth is being revealed
Brown has increased taxes substantially on the productive parts of the economy to fuel his spending binge and now we are paying the price.
Brown's tax rises have hit economy, says Bank chief
By Malcolm Moore, Economics Correspondent and George Jones
(Filed: 17/11/2005)
Higher taxes introduced by Gordon Brown have contributed to a slowdown in the economy, Mervyn King, the governor of the Bank of England, said yesterday.
Shoppers had stayed away from the high street because higher taxes had left less money in their pockets.
Mervyn King: bills rising ‘much faster than inflation’
"There was a sharp rise in the ratio of taxes to household income. There has been a two percentage point rise in the last couple of years," he said.
Mr King said that consumers had also been hit by the cost of paying off debts, and that council tax, rent, insurance and utility bills had risen much faster than inflation.
The collapse in high-street spending, where shops such as Allders, John Lewis and most recently Bhs, have suffered, is the main reason for the weakness of the economy.
Mr King's comments will be highly embarrassing for the Chancellor.
Mr Brown has sought to blame higher oil prices and a slowdown in demand from Britain's trade partners for having to downgrade his growth forecasts. This year, the economy is expected to grow by about 1.6 per cent.
George Osborne, the Conservative Treasury spokesman, said Mr Brown's stealth taxes were now having an impact and the Chancellor was likely to have to downgrade his growth forecast.
The Bank indicated that it was relaxed about the level of household debt, which was now more than £1,000 billion, but was still rising faster than wages.
Mr King said that 80 per cent of this debt was secured against houses.
Brown has increased taxes substantially on the productive parts of the economy to fuel his spending binge and now we are paying the price.
Brown's tax rises have hit economy, says Bank chief
By Malcolm Moore, Economics Correspondent and George Jones
(Filed: 17/11/2005)
Higher taxes introduced by Gordon Brown have contributed to a slowdown in the economy, Mervyn King, the governor of the Bank of England, said yesterday.
Shoppers had stayed away from the high street because higher taxes had left less money in their pockets.
Mervyn King: bills rising ‘much faster than inflation’
"There was a sharp rise in the ratio of taxes to household income. There has been a two percentage point rise in the last couple of years," he said.
Mr King said that consumers had also been hit by the cost of paying off debts, and that council tax, rent, insurance and utility bills had risen much faster than inflation.
The collapse in high-street spending, where shops such as Allders, John Lewis and most recently Bhs, have suffered, is the main reason for the weakness of the economy.
Mr King's comments will be highly embarrassing for the Chancellor.
Mr Brown has sought to blame higher oil prices and a slowdown in demand from Britain's trade partners for having to downgrade his growth forecasts. This year, the economy is expected to grow by about 1.6 per cent.
George Osborne, the Conservative Treasury spokesman, said Mr Brown's stealth taxes were now having an impact and the Chancellor was likely to have to downgrade his growth forecast.
The Bank indicated that it was relaxed about the level of household debt, which was now more than £1,000 billion, but was still rising faster than wages.
Mr King said that 80 per cent of this debt was secured against houses.
As I understand it there is also a problem that over large parts of the UK private sector employers are unable to compete with the wages and benefits being offered by the state and so skilled employees are being sucked out of the more productive private sector into the less productive public sector.
It used to be the case that public sector workers accpeted slightly lower wages in return for a better pension and longer holidays. That's no longer the case public sector workers now not only get better pensions, longer holidays and better job security....they also get paid more than private sector workers. It's a no brainer for any skilled worker.
It used to be the case that public sector workers accpeted slightly lower wages in return for a better pension and longer holidays. That's no longer the case public sector workers now not only get better pensions, longer holidays and better job security....they also get paid more than private sector workers. It's a no brainer for any skilled worker.
timmy30 said:
It used to be the case that public sector workers accpeted slightly lower wages in return for a better pension and longer holidays. That's no longer the case public sector workers now not only get better pensions, longer holidays and better job security....they also get paid more than private sector workers. It's a no brainer for any skilled worker.
Yes, figures released recently show that average wages are now higher in the public sector, add in the extra 800,000 public sector employees since 1997 and it is easy to see where most of the money has gone.
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