Gordon’s gamble

 

 

Following the Pre-Budget Report UK PLC is facing a £ 1 trillion national debt and £ 40 billion tax hike for all British families. It’s a £20 billion temporary tax giveaway with almost £40 billion of announced permanent tax rises – that’s almost £1,500 for every family. Buried in the small print is another £100 billion of unspecified tax rises to come. The Chancellor, in one move, has doubled the national debt to more than £1 trillion, and borrowed more than at any time in our history. We now know that Britain will be paying off Gordon Brown’s debt for decades to come. With this Budget, Gordon Brown has mortgaged the country’s future to try and safeguard his own.

 

The permanent tax rises that we face include £20 billion on National Insurance, £10 billion on income tax, £5 billion on alcohol and cigarettes and £2 billion on pensions. By 2012/13, anyone earning more than £20,000 will be paying more tax. So the majority of earners will be permanently worse off by April 2011, even before the alcohol and tobacco tax rises. By claiming to hit the rich he will in fact  hit most teachers, journalists, social workers, police officers, paramedics, firemen, office managers and professionals. The rich will in turn either migrate or redefine their income as capital gains and easily circumnavigate Brown’s clumsy attempts to capture revenue and headlines.

 

What wasn’t mentioned in the report was that borrowing next year will be the highest as a proportion of GDP on record and that the Government’s growth forecasts are much more optimistic than those of independent forecasters. If the recession is in line with external forecasters, and therefore worse than the Treasury forecasts, borrowing will be catastrophically high. The Government is borrowing more than the entire debt it inherited from all previous Governments put together. To put this in perspective £295 billion more borrowing than was forecast just eight months ago – more than £11,000 per family. What’s more, buried in the small-print is a £100 billion black hole in tax receipts over the next Parliament whilst the Chancellor has also cut the NHS budget by £1.4 billion in 2010/11. Finally in terms of businesses in Wolverhampton and throughout the West Midlands we face a £2.8 billion tax rise though the NIC tax increases.

 

There is an old Indian saying - that any dream is possible and any ambition easy to fulfil when you use another person’s money. Gordon Brown has taken a huge gamble to secure his tenure at number 10 and has used our money as collateral for the wager.

 

Paul

Smoke and Mirrors

Can we believe  any Government published figures ?

For ten years the published crime figures showing serious violent offences had systematically been understated. We were told not to believe the evidence of our own eyes and experience. Now we are told that Public debt is less than 40% of the Gross Domestic Product, but by clever accounting the liabilities of the private finance Initiative projects are kept off the books. Don’t worry for now. Those debts are been saved for the next generation to pay. The Government is hooked on a pay later drug.

How many are really and truly unemployed ? In addition to the published unemployment  figures over 2.7 million now claim invalidity benefit. A few years ago there were about 800,000 invalidity claimants. The Labour Government must have caused 2million of us to develop sicknesses and illnesses to the extent that we cannot work. More and more young people are encouraged to tackle university degrees, many of which have little or no commercial value, and students find they have not added to their post graduation earning capacities. But then, for three years or so, they were kept off the unemployment register..

So, here we are at the beginning of a recession and the real unemployment figure is 3 millions ! Cheer up, we have the Departments for Business, Enterprise, Regulatory reform, Innovation, Universities and Skills to dream up some more half truths.

Paul

A Remembrance Sunday Service

Yesterday I again attended the City’s annual Observance of Remembrance in St. Peter’s Square which was followed with a service in St. Peter’s Church. During the Remembrance service I laid a wreath to remember those who have fallen and those who are still serving on the front line.

Paul

It’s been a long wait!

In electing Barack Obama, America has made history and proved to the world that it is a nation eager for change.  This is a seminal moment for so many reasons and indeed one which has arrived far sooner than I thought it would. I studied Politics at Warwick University and specialised in American politics in my second year. The question of an African-American occupying the Oval office still seemed to be many decades away. Indeed at the time we were still witnessing remnants of the Jim Crow legislation in the deep south and seismic racial tensions in some of the major conurbations. 

At the time we had only had one non WASP (White Anglo-Saxon Protestant) President – John Kennedy in 1960, the first Catholic President. Until Barack Obama arrived on the scene I was firmly of the belief that we were many years away from breaking the mould. That mould has also been broken in another significant aspect. In recent years the south has been voting Republican (it had traditionally voted Democrat because of historical ties which stem from the American Civil War – the Democrats were the pro-slavery party). It increasingly looked like the Democrats could only win by selecting a Southerner. Indeed Clinton, Carter and Lyndon Johnson all carried the South in their successful elections in 64, 76, 92 and 96. Barack Obama is the first non southern Democrat to win the Presidency since JFK.

Make no mistake, the USA is still a conservatively inclined country in many areas but also dynamic in its ability to reinvent itself. Sometimes Europe appears to adopt a rather condescending and patronising tone to our cousins across the pond. What you can’t avoid is the fact that In these difficult times, people everywhere are crying out for change. I hear it all the time and feel that the desire for change had developed a huge momentum.  Perhaps Barack Obama’s victory is a portend for all incumbent Governments in Europe and even more so in the UK for our Prime Minister.  His victory will also give people a new opportunity to look at the United States and for the new President to redefine her role. He’ll have a mandate and two favourable houses of congress to work with – a rare opportunity for an American President.

Paul