BritishBudgetBlues

British Chancellor of the Exchequer, Alistair Darling, the highest financial minister in the UK, today delivered his second Budget report to Parliament amid a dismal economic outlook, fast increasing unemployment and a deflated housing market. Public sector net borrowing is set at 175 billion pounds, 12% of Gross Domestic Product, the highest figure and percentage of this country’s wealth ever. These are truly shocking figures.

The Government borrowing levels are the highest since the Second World War, this at the same time as the economy shrinks, which means that the books will not balance for another decade!

Addressing the Parliament’s packed and rowdy House of Commons, the Chancellor started his report with a prediction that the economy will start growing again before the end of 2009. He claimed the Budget would help get people back into work and support business and homeowners amid the most serious turmoil for over 60 years.

The measures the Labour Government are going to take rekindle memories of old style left wing socialism, red in tooth and claw. They are heavy in yet more borrowing, now at stratospheric levels; approaching three quarters of a trillion pounds, or more than one trillion dollars.

Most depressing in the announced measures was the second major increase of tax to 50% on the highest 1% of earners. This doesn’t actually achieve much additional revenue since these people have good accountants and the ability to vote with their feet. What such petty and ill-considered moves will achieve is the very opposite of their aim. Such high earners are the rainmakers of any economy, people that create jobs and opportunities for everyone by their endeavor. Make UK Limited an unattractive and expensive place to live and they will re-locate.

Before the world woke up to the major failings of laissez faire capitalism it already knew that old style central command style socialism was a busted flush. It now appears as if we might be moving to a new system that encompasses many of the worst elements of both those systems and virtually none of the good bits.

The enormous amount of British debt underpins this governments attempt to spend its way out of the current economic disaster. It is continuing to ramp up public expenditure until it is beginning to become obvious that it is an insupportably large percentage of Britain’s Gross Domestic Product.

The reason that the immediate and necessary tax increases and general move toward a reduction in debt levels is not taking place in the UK is almost totally political. The government has to call an election within the next 14 months and is aware that their popularity is at an all time low. Of course there is the possibility that the all time stupidity of these buffoons is such that they don’t understand this. Put another way, they were almost certain to lose the next election before this budget, now they are totally certain to lose the next general election by a landslide.

"This Budget will speed the recovery," he said. "We have good grounds for confidence."

MAIN PERSONAL FINANCE HIGHLIGHTS
* New £2,000 car scrappage scheme
* Stamp Duty holiday extended by three months
* Statutory redundancy pay will increase from £350 to £380
* Fuel duty to increase by 2p
* New 50% rate of tax for people earning over £150,000.
* Personal allowances scrapped for people earning over £100,000
* Tax relief on pension contributions scrapped for people earning £150,000

OTHER HIGHLIGHTS
Economy:
* Expectation that the economy will start growing again before the end of 2009.
"There can be no quick fix or overnight solution," said Darling.

* Darling forecast that the economy would shrink by 3.5% during 2009 - in line with predictions. 2010 will see 1.25% growth, he added, with 3.5% growth from 2011. In the pre-Budget report, Darling forecast a 0.75% to 1.25% slowdown in economic growth in 2009, with 1% growth in 2010.

The cost of the measures being enacted will haunt our grand children. Remember this is the political party that promised it was never going to put up the top rate of tax and it was the government, which had promised an end to economic boom and bust. Just two more broken pledges from a broken government.