Payback time
That's a big jump in public debt, which has to be paid-off eventually. The worry is that while these emergency measures may lessen the recession, the requisite subsequent increase in taxation may also mute the recovery when it comes time for us to pay off all this extra debt.
Darling has thought of this:
"Mr Speaker, by 2011 we expect the economy to be recovering strongly, profits rising and incomes growing at close to 4 per cent, as they have over the last decade."
"I propose, therefore, from April 2011 to increase by half a percent all rates of National Insurance Contributions, for both employees and employers."
"But to ensure this increase does not fall on those on modest incomes, I have also decided, at the same time, to raise the starting point for national insurance to align it with that of income tax."
"No one under £20,000 will pay any more national insurance contributions as a result."
"Second, those with the highest incomes have seen their earnings almost double since 1996."
"So again from April 2011, I intend, only on income over £150,000, to introduce a new rate of income tax of 45 per cent."
