United kingdom Daily news: Osborne's lengthy list of U-turns adds up to Â£725million

Minggu, 01 Juli 2012

Osborne's lengthy list of U-turns adds up to Â£725million

Osborne's lengthy list of U-turns adds up to Â£725million

By Dan Atkinson

PUBLISHED: 10:42 EST, 1 July 2012 | UPDATED: 10:43 EST, 1 July 2012

The bill for George Osborne's lengthy list of Budget U-turns has hit Â£725million in a single year.

That is more than a 1p rise in the higher, 40 per cent, rate of income tax would raise.

Alternatively, it would pay for a one per cent increase in all income tax allowances.

Adding up: The bill for George Osborne's length list of budget u-turn's has hit Â£725million

Last week saw the biggest single U-turn, with the sixmonth postponement of the August 3p rise in fuel duty, at a cost of about Â£550million.

This followed a change of heart on capping tax relief on charitable donations, at a cost of about Â£75million.

Three other U-turns by the Chancellor involved smaller sums.

The notorious 'pasty tax' - actually a proposal to levy VAT on still-warm shopbought food - was scaled back, at a cost of Â£40million, while the shelving of proposals to charge VAT on improvements to listed buildings cost about Â£30 million.

A further Â£30million was involved in the dropping of a plan to charge VAT on static as well as mobile caravans.

Currently, the U-turn bill stands at about Â£725million, but this figure assumes that there are no more reversals to come.

The Treasury has said that the cost of the biggest item, the fuel-duty U-turn, will be met from higher than expected savings in public expenditure. But it is unlikely that the details of these savings will be available until the Chancellor delivers his Autumn Statement.

By then, the return to recession could have imperilled his ambitious deficit reduction targets, raising the possibility of extra spending cuts on a scale that would dwarf the bill for the U-turns.