Alastair Darling trashed my car!

I have a low mileage, 8-year old VW Golf. I was thinking of replacing it this year, but now I'll almost certainly hang onto it for another year. Why? Because of the cretinous scrappage scheme, which has been introduced in today's budget against all sound advice, not just from me but from a lot of people in the motor trade.

The trade-in value of my car just fell dramatically, because it's not old enough to qualify for the £2000 scrappage grant. The much-lauded scrappage scheme in Germany has ruined that country's used car market, and the same thing will happen here. Fleet operators in the UK are warning that they may hold on to older cars until the scheme expires, rather than trading them in for peanuts. That will in all likelihood offset any boost to car sales that this benighted scheme might create. Add in the fact that four-fifths of the cars sold in the UK are foreign-made in the first place, and this looks like the worst policy initiative so far in the current economic crisis, which is really saying something.

Moving on from the scrappage scheme, there are few surprises in the budget. Although the tradition of budget secrecy lives on, somehow or other just about all of the key measures and numbers leak into the public domain before the big day. As a result, the Chancellor's presentation manages to be scary and dull at the same time.

One surprise in today's announcements is the decision to introduce the new higher rate of income tax a year early (in April 2010) and to boost the rate from the 45% previously announced to 50%. This is likely to get a lot of headlines (the words "soak the rich" were on the Telegraph website before Darling even sat down), but the truth is that it's largely a smokescreen. The heavy lifting of keeping the deficit under some degree of control will be borne by indirect taxes (cigarettes and booze going up at once; fuel in September) and by spending cuts. Those fall on "ordinary" people much more than on the rich. When I was a kid, the cliche was "taxing the working man's beer and baccy". Nothing has changed.

There is one change in the budget that will have a greater impact on the rich than the poor. It's bound to attract a whole heap of opprobrium in the next few days, but it's something I find it hard to oppose. Higher-rate tax relief on pension contributions is to be phased out, so that high income earners receive no more than basic rate relief. There will no doubt be an outcry that the Government should be encouraging people to save for their dotage. This may be true, but only up to a point. It's fine to provide tax relief so that everyone is encouraged to save for a decent pension, but beyond that point, you are (or should be) on your own. There's nothing to stop you from saving as much as you want, in any form that you want, for any purpose that you want, but you can't expect current taxpayers to subsidise your future indulgence.