Thursday, December 07, 2006

Pre Budget Report, early comments

It's going to take some time to come up with a considered opinion on this one. The news papers have done a lot of work on this and financial journalists will have done lots of work on this before hand. You can read the report yourself here.

Two things strike me. Firstly the language is so obviously partisan like Gordon howling his rubbish from the very pages you read, rather than the dry report report that I was expecting. The other is the ever increasing Public Sector borrowing requirement, which has risen above forecast and is rising as a percentage of GDP. According to the report it will continue to rise until 2010 when it seems that they claim it will level off at 38.4% of GDP.

Gordon Brown has made much of his so called prudence. I can't see it here. If you still need to increase borrowing after 57 continuous quarters of growth you are either not collecting enough tax or you are spending too much.

The amusing this is why the hole in the public finances is getting bigger though. It is because of lower than expected tax revenues. Gordon always seems to get his growth forecasts right (though he sets the estimate and as Vince Cable said yesterday, marks the paper) he always seems to over estimate the tax take. Perhaps the growth figures are just wrong?

Also oil companies investment in the North Sea seems to be down since they had a massive windfall tax slapped on them. Never mind the years of risk taking to get the oil or the times when oil has been only just profitable to produce in the North Sea, make a healthy profit for the risk then you get slapped with a tax. Shame Gordon can't do that to the PFI firm who owns the treasury buildings, they are in a tax haven!

Of course green taxes as a percentage of the tax take are still way less under the Conservatives, but then what did you expect.


DDC said...

Brown is a illusionist.

He makes everything so complicated that very few people can see what is really happening. The core vote fall for it as they just see the headlines and the spin. By making it all so complicated it becomes so much more expensive to administer. We pay for that.

In reality he is doing great damage to this Country. By the time the penny drops, it will be a Conservative C of the E having to sort it all out.

Nothing new really.

Benedict White said...

Yes I agree with that but what is a Conservative C of E?

Mark Senior said...

As you know Benedict I am no Labour supporter but he has managed the economy of the country pretty well as a whole for nearly 10 years and the blinkered Conservatives who cannot admit that and parrot that he has ruined the country etc etc do themselves no favours

Benedict White said...

Mark, I know you are not Labour, and it is true that Gordon could have been worse, but have you seen both the private and public borrowing figures which have funded this growth? It is simply not sustainable.