Instant Budget reactions - LIVE

Lower stamp duty - why the support for the housing market. help to first time buyers would be better if house prices fell.

Growth predictions - 3% next year is very optimistic, most economists reckon about 2.2%. This difference is huge in terms of its effects on our total debt.

Debt - Good news debt is only at £167 billion, but still the worst ever by a country mile.

Cider attack- No votes for Labour in South West UK then. hit the drinkers overall, as per usual.

Huge tax rises announced overall, £19 billion pounds worth.

INCREASE IN PUBLIC SPENDING NEXT YEAR OF 2.2%!!! Labour will never cut, if they win the election its IMF time for sure now. Fantasy of pretending that after next year there will be huge spending cuts which are not being announced or even mentioned yet.

blah blah...Limit of 1% for senior civil servants after 2011, London civil servants to be reduced, 15,000 posts over 5 years. Tiny other cuts suggested. Benefits payments not to go to people living in mansions at state expense. They reckon £20 billion of cuts; the deficit is £167 billion.

The cuts, which are only optimistic, ar enot as much as the tax rises - this is Labour - robbing you for their client state votes.

Also looking to sell Tote - 2 years and counting!

So what will cut the deficit - Darling says growth - the last refuge of a soundrel chancellor.

So now huge intervention into private sector suggested to get this - ordering banks to lend, which can only mean reducing their credit criteria and so undermining their recovery. Good to see Labour interfering with its cowed banks. £94 billion of new lending from RBS and Lloyds - can't see that helping their share prices.

Apparently some small new funding for small businesses too, but still the core tax on small business goes up this year. But business rates to be reduced for one year,  and some reduce on rates for business investment. overall, these are good ideas and surprisingl progressive from a Labour chancellor. I wonder if the overall tax burden has gone up or down though with all these fiddly measures? My hunch is down, but could be wrong.

Energy strategy - still a mess, now a green investment bank to help the private sector. NO More offshore wind wibble - such a poor return on investment, if any - loss-making investments by the Government - terrible.

Digital Economy - support for Computer games industry, reduced taxes on patents. Oh dear, more state innovation funds, albeit tiny at £35 million.

Universities - 400,000 more UK citiznes is that, don't think so. Lots of uni places are for Europeans. Oooh, a modernisation fund for Universities, how mcuh of that will go back to Labour Party as a donation?

tax crack down - focus purely Ashcroft - nice and political then!

and its over.

TRADING - Closed punch at 79.5 - not much profi there after costs, no real impact of the budget. Leaving GBPT short ETF in place, pound off a bit on the fantasy forecast, 3% up so far. A hundred quid odd is ok for a quick in and nout.

Budget special . Car tax.

Already announced headline tax rises are the 1% on N.I. , which is a special double tax on employees and employers. Also the 50% tax rate for highest earners. The fuel duty rise, another double tax really with the VAT added to the rise.

Less talked about today is the car vehicle tax rise, announced like many stealth taxes, in the previous budget.
There is a reduction by 30% for those minuscule emission cars, like the 1.0 Toyota Aygo that no one actually buys, but a 5% rise on the lowest of Co2 emissions normal cars like a Ford Focus 1.6 or a Vauxhall Corsa..
The average driver in the very common band I, of a Golf or a Mazda 5 will see a 15% rise.

But the big jump in tax under the weakest ever green tax argument veil was the new car tax. This showroom tax is adding a considerable sum to a new car. Again, the band I will be £300 instead of £200. A 33% increase. A Mercedes C class tax will be £750. But of course the owner won't pay. The dealer will. Tax included will be part of the discount package. Except it won't. The vehicle tax increase surely will be added onto the price of a new car, and discounted off by a determined haggler, but increasing the price of the car, with VAT payable on the extra too. Double tax time again!

And add to this anything that the Chancellor has thought up for today. Ariel tax- car radio tax - tax for each vehicle wheel - Car door tax ...
Will he do a bicycle tax? He should, but it just doesn't fit the green initiative.

Note* If your vehicle tax is due in April you still have 1 week to buy it at the old price.

Trading the UK 2010 Budget

The budget has approached and I have freed up some cash to put into position for the Budget. Now, normally this has been a pretty easy fish in a barrell exercise; short drinks makers and tobaccco companies, take positions on small greenwash AIM companies and such like. Last year the tax break for car selling was always going to be a winner and proved to be so.

This year though there are some really complicating factors:

1) Darling has said not big announcements
2) A badly delivered budget will hammer the markets so long share positions are highly risky
3) The Pound is already quite low so a big move is a big move likely?
4) Shorting Gilts is really hard and the spreadbetting c's have very high margins so making it not a very attractive call.

All in all, has left me a bit stumped. Drink going up in price should hammer the pub operators so I am leaning towards a short on Punch Taverns and Whitbread. VAT going up wouold hit retailers but I am not sure Darling will do that this time.

On balance I am going Short on Punch and Short on the Pound - there is even a good ETF you can use in an ISA for the latter, USD2 which is short Pound and long USD. I have bought that at 3645. Punch short at 80.5. Will aim to close these calls tomorrow

Election Wibble

Click here link to Wall

Uk Budget Week kick-off

There has been some interesting positioning around the budget this weekend. Firstly, Labour claim that this is it, if they win an election there will not be another budget.

In this sense then the budget may have a greater impact on the market than we had been expecting.

Also Alistair Darling has said he will outline, in what detail who knows, some of the cuts to public expenditure that the Government wishes to make.

Finally, Darling spoke abut 'no pre-election giveaways.' Now what that means I know not, but I presume it means more money for deserving causes of Labour voters and nowt else.

The real downside I can see though is that the Treasury is forecasting growth of 3.5% next year., The only way that will happen is if we have a massive inflationary boom on the back of a collapsed Pound. So either the treasury are not letting on to the disaster they are forseeing or else they are allowing Labour to play dirty election politics by pretending the deficit is just going to go away on its own.

Still, overall an interesting set-up as there will be more in the budget than I had thought previously. Tomorrow I will do a post on my 'trading the budget' positions, which have hte past few years done pretty well; this year is proving a challenge though.

In Praise of Unilateralism and High Standards

Unilateralism has something of a bad name, primarily through association with CND and its ilk. Unilateral disarmament flies in the face of all history and experience.

But in other spheres it can be a much more appropriate proposition, and insistence on multi-lateralism can be counter-productive. Two such cases are very topical.

First, environmental measures. Because some types of pollution know no borders, and because clean-up can cost money, it is tempting to say: we all act together or we do nothing. But it is amply evident that (for example) China will do absolutely nothing it does not conceive of as being in its own interest, and will scupper anything that others might seek to impose upon it. However, like any country, it will certainly take whatever measures it sees as being in its own interests which, in the case of the environment, won't at all mean China does nothing.

We should all adopt the same approach: refuse impositions, but take whatever measures we consider right, coordinating with any nation that sees things the same way as we do. If this includes raising tariffs on 'dirty' goods from China, so be it.

Second, a levy on banks. Gordon Brown, forever the coward, has never been willing to address shortcomings in City regulation for fear of 'losing out' to New York or Frankfurt. He attacks Cameron now, for proposing unilateral action to strengthen UK banking structures - and this after the systemic pre-2007 weaknesses have cost us disproportionately. Does he imagine that UK plc can somehow only make its way in the world with an under-capitalised financial sector ? Perhaps under the slogan "Ours is the biggest, so it had better be the weakest" ?

The UK was once synonymous with the highest standards. A British precious-metal hallmark is considered entirely trustworthy the world over: a French hallmark is taken with a large pinch of salt.

We know the cost of racing to the bottom on banking regulation - it is astronomical, and you don't even need a long memory to know it. Do what's right, and let the others catch up. It is its own reward. Go Cameron!

ND

Please buy my book

Political and business memoirs like to have a flavour of the character or their political ideals contained within the title. President Obama's Audacity of Hope for instance. The ever dull John Major couldn't even manage a book title. -John Major - The auto biography. thrilling!

This weeks game is to devise more realistic titles for memoirs.





The Course of my life - Edward Heath

Free at Last! Tony Benn

Ann Widdecombe: Right from the Beginning
Prezza: My Story: Pulling No Punches
John Major: The Autobiography
Time to Declare: David Owen
Tony Blair: Prime Minister
Speaking for Myself: Cherie Blair

BQ offers
- Edward Heath-Fingers in my ears
- Don't you ever get tired of being wrong? -Tony Benn
- Vidal Sassoon and me - Ann Widdecombe
- To Hull and back - John Prescott
- John Major - The Autobiography
- What have I done? - David Owen
- Taking the piss - Tony Blair
- Wide enough for both feet - Cherie Blair

Financial Discipline - How To Sort The Economy In One Easy Lesson

Here's how it's done - the North Korean way.

North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy. Pak Nam-gi was killed by firing squad last week …the Workers Party chief for planning and the economy was put to death as "a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy"

Here in the UK, the great improvement in local government finances started when Town Hall chief executives became personally responsible for balancing the books. We know this works.

We also know that someone has infiltrated our ranks and destroyed our national economy. I am fairly confident Gordon Brown qualifies as a 'son of a bourgeois', and although retrospective legislation is generally frowned upon in polite circles, an exception can surely be made.

In any event these should be the terms upon which George Osborne is engaged in May.

ND

BBC Question Time guesses..

This week, Question Time travels to Wythenshawe, Manchester where the panel includes Margaret Beckett, Andrew Lansley, Charles Kennedy, Caroline Lucas and David Starkey

From the 650 MPs the BBC seem to have a pool of about 12 that they use.
Has John Prescott or Dennis Skinner ever, ever been on?



1* BA / Unite should Charlie be allowed to fly the plane ?
2* Hostages. Should HMG pay up for the Chandler's?
3* As defence spending hasn't actually risen should GB go back for more questioning?
4* HMG borrowing may be lower than expected. Should the government continue spending up to its forecast ?
5* Pope visit. Should he be banned under the paedo laws?
6* Should all garden phosphates be banned?

Guess the questions. 6 guesses, bonus points for phrases used.

Deficit in a Spin

The Government borrowing for February is out today and the BBC et al have seen fit to say what a wonderful day it is as the numbers are not as bad as expected.

It seems that the number is about £3-4 billion better than was expected. Don;t be fooled though, Jan and Feb 2010 are the WORST EVER borrowing numbers for these months - historically they are months in surplus as tax is paid.

In fact, this is why the number has bounced, the Supertax on bankers bonus's and the late payement by private individuals struggling with the finances.

No doubt there will be crowing in the lefty media about the so called 'improvement'; which is nothing of the sort.

Also Gordon Brown will at this minute be threatening Alistair Darling with a Nokia insertion if he does not write all this saving into some tax giveaways at next weeks budget.

What do you think the pre-election giveaway will be?

New Government Pensions to rip off low earners

Really you could not make this up. The Government, concerend that medium and low earners are not saving enough, decided that what was needed was a mega project to make people save. The idea of perhaps tax cuts to provide people with more income was not even considered.

Now however, the system is all set to go; and guess what? It is really expensive, becuase the payments in are small there is little scalable savings. As such the administrator is putting a 2% fee on all joiners to help cover costs. So if you are joining say 5 years before retirement this will be quite a chunk of your money.

The Times has a good article with an excellent quote from pensions expert Ros Altman:

“The idea of taking away 2 per cent of people’s money before they even start saving strikes me as high, but of course the costs of administering tiny pots of money for decades is also high. Call me cynical, but this scheme has disaster written all over it.”

My bet is that this whole thing is wound up within 5 years and a huge write-down is taken by the Government to refund everyones money.

Labour Minister Angela Eagle's view is funny too:

“Market failure for low and moderate earners means they have not had access to a suitable low-cost pension scheme and have not been able to save for their retirement. Nest will put this right.”

For market failure  read lack of saving by the people, plus no economic way of creating a return plus Government State pension being the direct, free competition. But now the Government are wading in to turn this around for the better....

Petrol price home truths: the sickly Pound

You may have seen the Daily Telegraph this morning going big on Petrol prices about to reach a new all-time high. The likes of them and the AA and other commentators have pushed this as the result of speculation and oil company profiteering.

Its cause is neither of these two factors. In fact, oil refining has been losing money for the majors for over a year now, with negative prices for cracking oil; this is due to large overcapacity in Europe and when people try and shut down plants, like Total in France, they get strikes and Government intervention.

So the real cause lies in Oil having appreciated in price by from a low of $30 to today's $78 price, but more importantly, as the graph shows, the collapse of the Pound since the Economic crisis began.

As you can see the Pound is now lower in real terms than at any time in the past 30 years. Lower than the 1985 when it was at parity with the US Dollar crisis and much lower than on the ERM exit in 1982.

This is what our Government have delivered, a humbled currency with no prospect of improvement in the near future. So expect the prices at the pump to keep on rising.

Brown sacked in surprise move.

With just weeks to go until the end of the season Gordon Brown has been sacked as manager of the Labour Party after failing to lift them away from the relegation places..
In a surprise move the Yorkshire pudding faced chairman John Prescott said that .."Without mutual agreement the Party decided that it was time for some of that change that Gordon's been banging on about. We thank him for... erm.. for all the ..erm.. well we thank him."

John Prescott, the self styled ordinary punchy bloke from Hull said the party needed a change of direction having suffered their 35th set of useless poll results of the season.

"If we can't beat Southern softies like Cameron and Osborne then we must make changes. Another hopeless performance at home on the Politics Show on Sunday only widened the gap between the parties leaving the Labour party three points adrift of safety. I have delayed this decision for too long and finally I had to accept what the fans were telling me. He had to go."

It is understood the voter thumping chairman of Hull City has harbored doubts over Brown's suitability for the role ever since Brown was appointed two seasons ago and there was widespread speculation that he would be an immediate casualty.

However, the Labour Party opted for prudence and gave the 57-year-old an opportunity to prove himself. A record of only three wins since taking over, one of them a sympathy win by a backfiring letter in the Sun, and one by his wife at conference, has not been deemed good enough and Brown has now been placed on gardening leave while the termination of his contract is negotiated.
After all the bullying talk, 10p tax fiasco, lost data disks, underfunded military, MPs expenses scandals and being at the foot of the relegation table for months and months it was thought Brown would have been gone much sooner but attempts to replace him were always aborted by the deputy chairman, Lord Mandelson and the main sponsor the Unite Union.

Gordon Brown expressed his disappointment at the news by hurling a laptop from a window. It contained this message.

“Although I am extremely sad to be leaving, I am very proud of my achievements as manager, especially having led the team from the top flight of electoral achievements to their lowest point since 1983" he said. "It has been a wearying,humiliating experience."

Reports that Brown had lost full control of the cabinet room were sparked just a few weeks ago when Alistair 'Bullyard' Darling and Ed ' Bambi' Balls were involved in an embarrassing altercation. The two senior players came to blows in front of members of the CBI, when the cabinet were on a marginal seat away-day at taxpayer's expense. The row was thought to be over who was actually chancellor But the news was still something of a shock to the political world. Only a few hours ago Brown had been saying how he would 'go on and on and on as manager even if the team was relegated.'

Assistant manager Shaun Woodward will occupy the manager's post until a replacement can be found. So far there have been up to zero applications for the job.

Repo 105 - Really Simple, Really Dumb

When the Lehmans ‘Repo 105’ story broke last week, CU noted the similarities with Enron. There are indeed some similarities – the bullying of external accountants to get dodgy treatments waived through; the reliance on convenient legal opinions - but there’s an even more compelling parallel. It’s WorldCom and the halfwit Bernie Ebbers, now languishing in gaol.

WorldCom, you may recall, resorted to the laughable expedient of capitalising $ 6 billion of expense - the simplest profit-doctoring scam imaginable. And the Lehmans Repo trick isn't at all complicated either.

Enron’s schemes, by contrast, were mind-boggling. Starting with ultra-complex (but legitimate) securitisations, Ken Lay’s boys moved on by degrees to transactions the structure of which even some investment banks found it hard to fathom. (“Actually unfathomable”, according to one academic.)

Everything about Lehman’s, from Dick “the worst US chief executive of all time” Fuld down, reeks of rank amateurism! Move up Bernie, you may have a new cell-mate.

ND

Is the Government creating a double-dip to scare voters?

This is a serious question. Over the last 2 weeks the economic news coming out of the UK has been dreadful. prior to this I saw very little chance of a double dip in the real economy. After all, we have not had a bounce yet and the economy was bumping along at 6% lower than it used to be, so another potential dip is terrible news.

However, the Bank of England today thinks the labour market is still very tricky, house prices are falling and the weak pound is yet to feed through to improving exports. All in all a bad set of results which suggests the Country is an a terribly weka economic state.

On top of this, The Labour Government now has no stimulus plans for the economy, is refusing to lower taxes to spur growth and is doing very little to stop an oncoming wave of strikes. None of this is supportive of the UK economy; quite the opposite, it seems that to suit their political ends labour are quite happy for the economy to deteriorate for a couple of months. Why?

- Their election campaign of pure negative attacks on the the Tories can benefit from saying they Tories would cut more and s make things worse; even when they are doing nothing themselves.
- If this still does not work to win them the election; they are leaving a wose position for the Tories to take-over in any event.

So what can Labour to to make sure this happens?
Well much of the work is already done, in not actually doing anything and the Chancellor has been out at the weekend saying his budget will be a do nothing budget. At a time when urgent actvity and strategic change is needed, we get nothing from a Government more concerned with electronic tagging of dogs.

So it's lose-lose for Britain and win-win for Labour.

Really Mad Men

Weekend fun.

‘Change That Works For You.
Building A Fairer Britain’.

New slogan from the Lib Dems. Any slogan that looks like a spoof of Labour and Tory slogans shouldn't have been considered.
Should have gone to Sterling Cooper instead of Duck Phillips
Would be hard to find a more vacuous one.
But we expect you are up to the challenge..

I offer..

"Changing the way we change the thinking about the changes we will change in the future"

"Creating a future for hardworkingfamilies and not so hardworkingfamilies "

Over to you

The Charges of the Light Fingered Brigade

MPs on trial..
Another being charged..
The Keens and Uddin getting away with it..
Tory Peer into the dock...

The expenses scandal that has already claimed so many looks set to rumble on into the election adding new powder to the relatively unscathed Lib Dems cannons.

More than 130 MPs are standing down at the next election, expected to take place in May.

Lest we forget

The last of the grave 600...

Half the mortgage, half the work,
Half a job to do,
All in the Parliament of Wealth
Stode the six hundred. {and fifty}.

‘Forward, the Light Fingered Brigade!
Charge for all expenses!’ they said:
Into the Parliament of Wealth
Strode the six hundred. {and fifty}

‘Forward, the Light Fingered Brigade!’
Was there a man dismay’d?
Tho’ the fees office knew
Someone had blunder’d:
Their’s not to make reply,
Their’s not to reason why,
Their’s but to approve and sign:
Into the Parliament of Wealth
Strode the six hundred. {and fifty}

Journalists to the right of them,
Bloggers to left of them,
Taxpayers in front of them
The Voters thunder’d;

Storm’d at with writ and yell,
Coldly they strode and well,
Into the jaws of Death,
Unleash the forces of Hell
Strode the six hundred. {and fifty}

Redact’d all their expenses bare,
Denied as they turn’d in despair
Spinning the claims as fair,
Charging like barmy, while
All the world wonder’d:

Plunged into the furies-stoked
Right thro’ Party lines it broke;
Tory Cossack and Labour Russian
Reel’d from Martin's removed cloak
Shatter’d and sunder’d.
Then they limped back,
but not
Not the six hundred. {and fifty}

E&Y could the Big 4 reduce to the Big 3?

E&Y, the global accountancy firm have not come out well of the investigation into the Lehmans debacle. Their Audit for 2007 is under severe questioning as to how the company was allowed to remain a going concern.

Lehman itself will see one or two of its exectuvies in Court I would think, the issue of this Repo 105 looks like a tool for accounting fraud of similar nature to what Enron was doing in 2002. In fact, the cases do look similar, no doubt Nick Drew will comment on this later.

If E&Y goes the wya of Andersen then we will be left with very few large global accounting firms indeed, just PWC, Deloitte and KPMG.

Also it is interesting in reading the various reports how Citi and JP Morgan helped to bring Lehmans down by removing collateral at key times; and people say Wall Street is one big gang....

What though it most noticeable it the lack of criticism for the Fed and the the US Government for allowing the regulatory frameowkr and market environment to become so distorted.

I really want to see some people in jail for Fraud over this. I don't accept that we can have this huge financial crisis based on such mismanagement and grred and yet no one end up in jail. Same in the UK, it is sad to see hwo due to the complexity of the problem, no prosecutions are being brought.

Question Time mumsnet edition

Dewsbury will help make television history when Question Time puts leading politicians before its first ever all-female audience.

I couldn't be less impressed with this ill thought, half baked, tokenist edition.

The panel is not yet decided as I guess the producers rush to try and arrange an all women panel. Something that should have done at conception.



My choices such as ...

1} Should the school secretary be available on twitter.
2} Which is the best bingo site ?
3} Terry nappies will they save the planet?
4} Why do magazines have a full page advert for a Victoria sponge next to an article about dieting?
5} What will the panel do during the World cup?

....Have been severely and rightly condemned by my secretary and assistant Miss CD as both sexist and stupid and that when Mrs Q sees it I shall regret it. I reminded her that Mrs Quango has no interest in QT, and that tonight she will be talking to her sister, then Facebook, then talking her to sister while they are both on Facebook, then internet window shopping...

Miss CD will therefore be picking the topics likely to
be discussed tonight.

1} Social services - The British Fritzel scandal
2} Venebles and mistaken identity
3} Gordon Brown- Chilcot and Landrovers
4} Dangerous dogs and licensing
5} Asylum seeker death jump
6} Ashcroft and Labour Lords Non Dom

Next week's Question Time is from The Judy Garland conference centre in Brighton and features Iain Dale, Stephen Fry,Lord Mandeslson, Alan Duncan and Weylan Smithers.
The audience will be made up exclusively of people in white t/shirts.

What is Unite getting out of the BA strikes?

How patriotic are Labour really?

As this Telegraph article points out, Lord mandelson was more than happy to speak out about the Kraft take-over - subject of a Unite union campaign. Yet there is silence on the BA strikes which threaten that UK owned and based company. Ian Martin as the WSJ blog has been trying to get a comment from Unite's Charlie Wheelan, but the usually locacious spin merchant is oddly silent. He is also now advising Gordon Brown on the election.

At a time of recession the contradictions for Labour could not be worse. In hock to Unite for money and funding and so staying quiet, and therefore encouraging by default, a ludicrous strike that will affect millions of voters.

The Union are way out on a limb with BA ready to break the strike and the expected numbers of particpants at 50%. Perhaps the staff are realising with nearly 3 million on the dole queue in the UK, thiss perhaps not the way forward?

I will not let you down

Gordon Brown's first speech as Labour Leader to the Labour party conference in 2007 ended on a big climax of a promise.

So this is my pledge to the British people:

I will not let you down.

I will stand up for our schools and our hospitals.

I will stand up for British values.

I will stand up for a strong Britain.

And I will always stand up for you.

Today during his speech on the economy even that old soundbite is being re announced.

'I will not let you down.'

Bit late to promise that now..?

Monthly (March 2010) Cityunslicker Trading update

With the FTSE pushing on 18 months highs, below is a table of my current investments and updated price targets with expected time to hold. For interest only of course. Some of these are proving highly volatile, GKP for one! Overall for 2010 so far I am about 12% ahead, not matching last year at all. great things expected this month of PPA, AST, MNR. CHAR has been on a flyer this year, up nearly 80%.

History Corner(2) - The 1991 FA Cup Final

In 1991, Nottingham Forest under the mercurial Brian Clough finally reached an FA Cup Final, where they met Terry Venables’ Tottenham Hotspur. Spurs had enjoyed a very rocky season, on and off the pitch, and had been written off by many. When May came around they were mightily relieved still to be in with a shout.

Clough had made several odd decisions in his starting line-up, and going into the match his supporters weren’t at all convinced.

The opening minutes were notable for a crazy, vicious tackle made by Paul Gascoigne, after which he was forced to leave the pitch, having damaged his own knee in the incident. Forest scored from the subsequent free kick.

With the match having gone the full distance, the scores were level at 1-1. Both teams were exhausted, and stayed on the pitch awaiting extra time.

Venables gathered his team around him and went into overdrive, inspiring them for one last great effort. But Clough was strangely ineffective and just sat on the bench, leaving his side to their own devices.

In extra time, Tottenham prevailed – with an own goal from their opponents.

ND

A final chance to spring a trap

With a budget of new news, no tax rises and no cuts. That seems to be the plan; but Mr Brown always puts a few taxes over the horizon:

Next months road tax will be around £5-£10 higher for all cars except the tiniest {announced 2009}.
For new cars bought after 1/4/10 the tax is between £70 and £500 more.
The showroom tax

33% road tax increase for new cars in the common band 'I' bracket. At the same time as the end of the scrappage scheme and end to the VAT cut.
Darling's very own double dip seeing as how motors were pretty much keeping the economic figures going.

Gordon Brown used to like to push up the cold weather allowance. It was a great way of claiming a rise to pensioners and those on low income benefits while giving them nothing as it only came into effect when the temperature dropped below for 0 degrees for seven consecutive days.. It was fixed at £8.50 1995. Estimated by the Treasury to cost £100 millionish it was increased by Brown in 2007 to £25 as mild winters made it a soundbite but not a payment. But two cold winters and increased unemployment have seen payments rise to around £200 million in 2009 and around £260 million in 2010. Expensive for a PR stunt. Especially as these same groups automatically receive between £250 and £400 each December in a single "Winter" allowance.
The car scrappage scheme only had £300 million earmarked.

Chancellor Brown, erm , I mean Darling, likes to try and have a few unsubtle traps for his opponents.
This final budgets he could really go for it. Something he couldn't deliver, but sounds plausible, even necessary to relieve hardship. Something that a coalition parliament wouldn't approve or an incoming Tory government would have to axe.

New 5p tax rate?
Huge increase to tax credits?
Supertax
A guarantee for a government job for all 16-50 year olds unemployed for 9 months?

Any ideas on what will be the big non give-away in this mortuary budget?
The headline happy to motivate the troops, shore up the core, and try and disguise the secret department cuts, spending freezes and stealth taxes?

The end of free speech and flaming on the internet

Check out this article in The Lawyer, on the arrest and prosecution of Paul Chambers. he made a twitter bomb hoax and is going down for it; but as the article explains, the Police and CPS have really gone to town over this and there are huge issues around the loss of free speech here.

He was a silly man to make a bomb hoax on twitter, but a potential 6 month plus sentence on a different charge is a worrying development.

We really need a new Government to restore both common sense and reduce the over-arching reach of the State.

Keep your comments polite, I don't want to be arrested!

The Russians, and Even Gordon Brown, Know Better Than This

Prof Peter Odell is a “respected oil academic” and “adviser to the Opec oil cartel”. Say no more, you might respond, and indeed he’s been on the wrong side of an awful lot of debates. Now – well, judge for yourself.

"Ministers must wrench back control of oil and gas production from the private sector if Britain is to maximise the value of the remaining reserves in the North Sea. 'UK oil and gas production has been steadily declining since 1999. The reason is that the UK government, unlike those of most other countries, has abandoned oil and gas production to the private sector … The government should [set] up a hydrocarbons authority, which would initiate new private-public partnerships to engage in offshore oil and gas production' – modeled on Norway’s Petoro."

We know that Opec likes arguments for state control Prof, but don't expect this one to float in our waters. The evolution of the North Sea oil & gas industry has not been without a few false steps, but by and large (once WedgeBenn was sidelined by Harold Wilson) it has been a triumph of the private sector. Its major early developments were undertaken by the mega-companies – primarily BP, Shell, Conoco, Phillips and Amoco, with big roles by another dozen or so – but as the patch fell into inevitable decline, these firms sold on to specialist scavengers that you’ve never heard of, whose only motivation is to exert ingenuity, effort, technology, innovation and enormous attention to detail, to squeeze out the last remaining economic barrel and cubic foot. And that is what they are doing, with signal success.

To suggest that detailed governmental interference at the level of individual fields, will maximise recovery from these fields, flies in the face of all experience. References to Dutch and Norwegian policies are laughable: the Dutch situation is very extreme and very different (an entire economy dependent on a single gigantic gas field): and I am not aware of any suggestion, let alone demonstration, that the clumsy Norwegian model has achieved anything remotely optimal.

The biggest counter-argument comes from the very recent phenomenon of shale gas. Known about, but neglected, by the big companies for decades, it was only when maverick niche players got stuck in to the challenges, that this untapped resource turned around America’s declining gas output and (coupled with the recession) caused the very significant gas surplus that we’ve lauded many times before on this blog for its beneficial consequences across Europe as well as North America.

Finally, the Russian government is toying with ways of introducing the North Sea model - i.e transferring operatorship away from large traditional enterprises (Gazprom this means you) to smaller, specialist scavenger companies - for its large and declining mature oil and gas fields ! The lesson has not been lost on them, even if it has eluded the Professor.

Not even Gordon Brown is interested in Odell's statist views.

ND

Badger loses in Brown fight

Poor Alistair Darling, the man who has had to endure the forces of hell unleashed upon him. Not only was he totally unready to be made Chancellor 3 years ago, but also had the bad luck to follow the megalomaniac Gordon Brown.

Now, having survived in job through the most unprecedented economic crisis in history, the Labour spinners have had it that he has been trying to stand up to Gordon Brown and Ed Balls over the forthoming budget (I say that wistfully, it will be the latest budget ever if we get it and not an election). Appartenly he has been saying let's make some cuts in our gargantuan spending in the vain hope of preventing a Greek style Sovereign Crisis.

But today in the Sunday Times, it seems the battle is lost. He is sticking to last years policies with no new cuts in spending. Oh dear, last year he predicited the recession would be 50% less harmful than it was (just over 4%  loss of GDP rather than the actual 6%) . So this means following last year's budget is a pure fantast dreamland right from the start.

HM Treasury (where is the budget, spineless wonders?) have to revise a lot of numbers becuase they either keep getting them wrong or political pressure is proving too much and they keep massaging the right numbers. The fact is we need the truth desperately. How do I know this to be true? Well the Tories will not be nailed on any concrete economic policy, becuase they say they have no idea what is in the books. Given the massive electoral harm this is causing them, they would not be saying it if it were not true.

So there we have it, a nice political budget coming up. I suggested the other days ways of trading round it, seems this is likely to come to pass now on 24th March.

Iceland

Bit late I know, but the vote in Iceland not to pay back the UK and The Netherlands I find interesting. There seem to be many arguments to say why should they pay us back? When it was as much our  (EU) rules as their's.

However, I seem to remember there was this country once, which bankrupted itself fighting a war to save Western Civilization. At the end of the war it had to take out huge loans from its former allies to try and survive and as a result there was rationing for a long time; Longer even that the defeated and occupired countries it had defeated. Eventually, over 60 yeas later every penny was paid back with interest.

The people of Iceland feel wronged and robber by their own, which is also true, but it is disengneous to blame johnny foreigner for this.

What will happen to all those shiny new buildings?

All those new hospitals and schools buildings coming on line between now and -20??. All the PFI builds that have to be paid for out of a dwindling budget.

Will they be staffed? Will they be opened at all? If the budgets are cut isn't it easier and cheaper to just not open a building than to lay off existing staff elsewhere. Just a thought as I walked past my new local hospital, scheduled to open in 2011.

Or maybe, as in the Yes Minister episode The compassionate society, the hospital will open and is fully staffed. It meets all of the governments targets. Lowest infection rates, fewest complaints, shortest waiting lists, cleanest wards, lowest absenteeism. Its just that there are no patients. The place is left with scaffolding up and cement mixers on the lawn to disguise that it is open.

I met a traveller from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert.

Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:

`My name is Gordymandias, King of Kings:
Look on my works, ye mighty, and despair!’

Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away”.

Keep on troughing; MP's and their client state friends

So today the MP's of our country have announced they are to get a 1.5% pay rise. In the new Labour way, this has been decided by one of those 'independent' Quango's. To go with MP's, Doctors and Dentists are also getting 1.5%.

Hands up in the private sector anyone who got 1.5% last year or expects to get anything this year? Hmm, thought not.

Personally, not inclduing when I change jobs, I have had 3 payrises in 14 years ( OK, I have learned of the need to change job alot to compensate!).

But really with the country needing to slash at least 10% off it spending over the next two years, this is a disgrace.

It's a typical charade for the Labour Ministers, shortly to be slung out of power in all likelihood, saying they won't take a payrise they will never see; but also to award Doctors and Dentists, two professions who pay has skyrocketed over the Labour years is just insane. See this article on Doctors pay in Scotland increasing 38% over the past 3 years alone. Look at the very enlightening market oracle graph!

Chalk up another scorched earth policy designed to bring the IMF in to run the country ever more quickly.

Keeping The Lights On: Where Will The Investment Come From ?

Over the last two years or so we've commented several times on just how much £££ (and €€€) will need to be spent on new power plants and other energy infrastructure over the next couple of decades, assuming we don't want the lights to go out. It'll need to be even more - infeasible sums, in fact - if "full de-carbonisation" is to take place by 2050 (© Little Ed Miliband 2009).

Where will it come from ?

In recent days I've been spending time with groups of eager would-be investors. They are dead keen to find ways of investing their large amounts of money that aren't dollar denominated: and they are enthusiastic about the idea of European steel'n'concrete assets in essential sectors like electricity. They are Chinese, Taiwanese, Korean and Indian. Some of them are already quietly setting up shop here and staking us out.

There's one problem. They all say they don't like political risk ... and they don't like unions ! Can't be doing with them.

Unions or electricity ? Electricity or unions ? I wonder what we will decide. How very different the 21st C is going to be.

ND

Question Time quiz

David Dimbleby will be joined in London by the Lord Adonis, Boris Johnson, Shirley Williams, Carol Vorderman and Will Self.

Shirley Williams is on so often she must have a reserved sticker on her chair. Usual rules - 6 guesses. Bonus points for correctly predicting the spurious links that politicians make between the questions.

This week we may even have a player in the audience..

BQ
1} Bulger killer : We have a right to know, for some ill defined reason. Bravest will point the absurdity of this stance.Populists will go with the Mail. Gordon wades in unnecessarily today.

2} Michael Foot was the last honest politician. Didn't stop him being the most out of touch for his age, but he was a socialists socialist. Shirley 'gang of four' will be generous.Can Will Self resist languidly asking her Ladyship and His Lordship to comment on Mr Foot's decision to decline all bourgeois honours.

3} Ashcroft non-dom - non-interest story.

4} BBC cuts - Boo-Hoo round . Will anyone dare mention reducing,rather than maintaining the inflation proofed increases to the licence fee?

5} Londoners will not get preferential treatment for the Olympics, despite paying for it.

6} Footie - England in the top 8. Bound to win the world cup now.

Protection from the Brown Devaluation

Cityunslicker has been a bit busy moving house the past few days. Nonetheless even the lack of internet and television has not hidden the rather sudden collapse in the Pound from me.

For some reason the newspapers are saying that this is all due to the chance of a hung Parliamnet; what they really mean is if Labour get back in the markets will turn a big thumbs down to the UK. Ken Clarke Speaks the Truth.

Also they are very wary about the lack of a real budget date being announced (see more on a later post). This makes the market sorry that the Government is going to try and avoid any painful public discussions.

So what can you do to protect yourself from the fall in the Pound and to judge the coming few months?

Well, here are some suggestions.

Firstly, the key dates are the election and the budget. if labour are doing well then the Pound is toast for both of these, it is probably toast for a budget anyway as Labour will not announce any real spending cuts a few weeks before an election. On the plus side, the end of April will see what analysts think are positive growth numbers for Q1 and so that should  bounce the Pound.

So where are we in currency terrms? Here are a few graphs:

As you can see, the Pound is down 13 cents on the year against the US dollar and very slightly agains the Euro. As it costs 2% or 3% to change your currency, these don't look like much of a hedge against a further fall in although the Dollar is the better choice. This is why FTSE stocks that earn their money in dollars are zooming off the charts today (see VOD.L for example). The real standout here is Aussie Dollars, with no recession in Australia, the Pound's trend is well established and 12 cents on the year looks like just the start. if you want o open a foreign bank account for your money, Aussie Dollars are the way forward (Canadian Dollars look similar too).       

Somewhat easier perhaps is the final graph, showing the performance of the FTSE and the Physical Gold ETF, PHAU. Both are well up ont eh year, especially the Physical Gold ETF. Of course the Physical Gold ETF can also be held in a tax free ISA or SIPP.

As we approach the budget and the election and you feel worried, the above may be of some help. If on the other hand the Tories appear to take a strong lead again, then the opposite positions will work out. Tin hats for all and good luck!

The Battle of Dunbar

History Corner

In 1650 a Scottish army under Leven and Leslie was in a commanding position over an English force under the brooding Cromwell that was weakened and demoralised by a string of setbacks. Victory seemed certain for the Scots.

However, the ultra-purist Covenanters held sway over the conduct of Scottish strategy. On the very eve of battle they called for an ideological purge, which resulted in the dismissal of some 80 of the most experienced Scottish officers, and many of the rank and file.

Cromwell, outnumbered and holed up in Dunbar, spotted an opportunity presented by the disarray and uncertain positioning of the superior Scottish forces and struck a master-blow. A night attack by his cavalry broke the Scottish line and rout ensued, with minimal English casualties. Cromwell had plucked an unlikely victory from the jaws of defeat, exploiting to the full his opponents' ineptitude.

ND

Ed Miliband is Bananas Too

George Monbiot is not everyone's cup of tea, but he's an honest man. This, from the Grauniad, on the occasion of Little Ed Miliband's completely barmy feed-in tariffs for home-generated electricity, to be introduced (you guessed) on April 1st.

"Are we really going to let ourselves be duped into this solar panel rip-off? Plans for the grid feed-in tariff suggest we live in southern California. And at £8.6bn, this is a pricey conceit with little benefit The government is about to shift £8.6bn from the poor to the middle classes. It expects a loss on this scheme of £8.2bn, or 95%"

Normally it's David Miliband who's brandishing the banana, but Little Ed is keen to prove he's bonkers too. The essence of current government energy policy-making is: the dafter the idea, the bigger the subsidy. It's specifically designed that way: Monbiot again -

"The government wants everyone to get the same rate of return. So while the electricity you might generate from large wind turbines and hydro plants will earn you 4.5p per kilowatt hour, mini wind turbines get 34p, and solar panels 41p. In other words, the government acknowledges that micro wind and solar PV in the UK are between seven and nine times less cost-effective than the alternatives"

As we've noted before the Tories are quite taken with feed-in tariffs as well. Apparently there will be a Tory energy policy along shortly. I'm trembling, and it's not with eager anticipation.

ND

Prospect of Labour Government sinks Football

This is an unlikley title, but nonetheless has some truth to it. Yesterday saw a huge fall in the pound for a single days trading, on the back of that we can expect further medium term weakness; partly cause by the Pru's need for dollars to make the huge AIG acuiqsition and partly by the markets wilting at the thought of 5 more year of Gordon Brown.

However, somewhat aligned to this is the Deloitte Annual Football money survey which was released today. Real Madrid come top and Barclenon second, the days of Man U. being top have been over for 5 years now.(how long ago was the last election?)  Although the big English clubs dominate the top ten of the table, they are no longer top of the tree and it shows on the pitch in that the really world class players like Ronaldo leave the Premier League for Spain. None of the top 3 players in the world plays in the Premier League.

In sterling terms though, the clubs have been powering ahead generating more income. In fact if the Pound was more like .80 to the Euro than .90 then the UK clubs would still be top.

 A weak Government has given us a weak currency and bequeathed a weakened premier leauge. Labour, they can even ruin your football!

Is it early too early to think about Christmas?

Cassandra was cursed with gift of prophecy. No one believed her predictions even though they were always true. Cassandra was fated to know the future but to be powerless to alter it.
A bit like Alistair Darling.

Meanwhile outside of mythology you may have noticed USA sizes on your box of trainers or top recently. Shoes are a size down and clothes several sizes different. There is loads on Ebay too.
UK fashion retailers and online shops have been buying stock in the USA for a good few months now. This is more unusual than it seems as the clothes are usually bought in $ in China or the far east and made for Europe and UK specifically.
The USA stock was cheap bargain priced canceled orders, bankrupt stock and liquidators specials as US outlets went bust and others cut back inventory.
Expect all that to end if the £ keeps tanking. Xmas orders need to be bought about now for everyone who put off doing it in Oct/November hoping to pick up bargains. The shipping time is usually 'FROM' 6 months. Leaving it late means a premium to pay for shipping.
Either way, unless the £ picks up quickly, prices will rise. Not just fashion of course. Almost everything comes from overseas and is traded in dollars. Casandra might just conceivably be seeing the inflation genie heading this way for the festive season.

Sterling - Again

We haven't needed this graphic for a bit, but it needs dusting off again.

Sterling appears to be strongly correlated to Cameron's lead in the polls ...


ND

UPDATE: posted the above @ 13:34, and at 14:20 the fragrant Stephanie Flanders, without a by-your-leave, weighs in with ...

"As the Conservative lead tumbles, so falls the pound"

but I forgive anyone whose father wrote songs like he did. At the drop of a hat-tip ? Have some Madeira, M'Dear.