What PBR? It was only politics...

Yes, yesterday we had the Pre-Budget report, today it is forgotten already. Why?

Well the Tories say they will reverse the main NI tax rise, the markets have shrugged off any thoughts about it and carry on, guided by other news. Even the bankers have little to worry about as all they have to do it sit on payments until mid-April instead if January.

None of the really long-term proposals will ever get enacted as the Government won't win the next election (outright) anyway.

So this will all be forgotten very quickly.

However the point about bankers bonus's could be a very clever political calculation. Labour know they have managed to blame bankers and not Brown's recklessness for the recession - when of course it was both. Now they have set-up a situation where there are big easy loopholes for the Banks to get out of the 'supertax' bind. I think the Government hopes the banks jump through the loopholes, just in time for an election where the Government can then attack the bankers and initiate a class-war type struggle, accusing the Tories of all being bankers' and such like. It reeks of Alistair Campbell plotting....

Irish Budget vs. UK PBR

Our two counties (CU holds both passports) are very linked in the crisis. Ireland is in a slightly worse position than the UK only because it is in the Euro and so does not have a free currency to devalue.

Here is how the Irish are making amends. Swinging cuts to defeat the deficit threat, led by the politicians. Compare to Alistair Darling's tiny efforts of today.

Yet let the truth be known, what the Irish do this year the UK may well be doing next year, post and election.

What should be in the PBR Speech

- An apology for the absolute lies told last year and in the budget that the economy would recover in the 2nd half of 2009. Instead some more accurate predictions for next year, allowing for a shallow double dip and growth of about 1% at best for GDP.

- An admittance that Government spending is going to overshoot to just shy of £200 billion this year. An analysis showing that 50% of this is now a structural deficit, meaning spending cuts are needed to reduce the deficit.

- Some much needed tax reductions for business and the low-paid. 5% of business taxes and thresholds raised to £8,000 for all people. Paid for with VAT hike to 7.5%, re-imposition of stamp duty on all house sales and raising capital gains tax to 25%.

- A plan to sell-off stakes in RBS and Lloyds within 3 years, as well as the sell-off of the channel tunnel and other large infrastructure assets.

- The beginning of a shift to taxes on energy consumption and away from income taxes, to be revenue neutral in aim.

- A promise of an immediate 6 month review of all Government spending with the outcome to be a 15-20% cut in the amount of spend by Government within 2 years. No sacred cows in defence, NHS or foreign aid.

- A commitment to end Quantitative Easing to ensure that the UK can maintain the low interest rate environment for as long as possible to see us through the next phase of the recession.
I'll be amazed if a single point is raised - yet it is all common sense...