The Great Debate UK
-Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
George Osborne must be thankful to Don Fabio and his boys for ensuring that Wednesday’s tabloids will have other things to think about than the Budget, because it is going to be one of the toughest ever.
There is every indication the advance billing is more than just news management. The pain is going to be frontloaded for two reasons.
First, if anyone thought the electoral cycle was dead, the run-up to the last election should have disabused them.
Our recent post on the End of Capitalism triggered much interest and comment. There were plenty of diverse views, as one would expect. But one thread that came out was that what we are now seeing is not true capitalism (nor, of course, is it old-style communism). Ok, but what is it?
Anthony Conforti suggested in a comment that we need a name for what is happening,:
from Luke Baker:
For the best part of 12 years, Labour has pursued essentially conservative (with a small 'c') economic policies, steadily underburdening itself of the 'fiscally unreliable' tag that some earlier Labour administrations were (wrongly or rightly) saddled with.
And for most of the past 12 years, as the global economy steadily expanded and Britain's along with it, with aggregate wealth rising smoothly, Labour looked strong at the helm each time the budget came around.
Mark Schofield is a tax partner at PricewaterhouseCoopers LLP. The views expressed are his own.
There were a number of initiatives unveiled to kick start the UK economy which will increase the budget deficit for 2009/2010 to £118 billion. The Chancellor assured the House of Commons that finances would be back in balance by 2013/14 at which point the country “will only be borrowing to fund investment”. By that year the net UK government debt will be over £1 trillion representing 57.4% of GDP, compared with an estimate of £602 billion, 39.4%, for 2008/9.
Roger Bootle is economic adviser to Deloitte. The views expressed are his own.
The Chancellor was right to try to give some help to the economy but, while the scale of the increase in future borrowing is huge, the economic effect of the reduction in VAT will be tiny.
The size of the PBR package, about £9 billion this year, rising to £16bn next year, was roughly equal to what had been mooted in the media. But the scale of the measures, although they sound large, is in fact small.
from UK News:
He cut VAT to 15 from 17.5 percent just in time for Christmas shopping -- a move he said would put some 12.5 billion pounds in consumers' pockets over 13 months. Other measures include well-leaked plans to help homeowners, small businesses, parents and pensioners.
from UK News:
David Cameron's decision to ditch a major Conservative pledge to match Labour spending plans pound for pound was hailed by commentators as an important step in the politics of the recession, opening up a clear gulf between the two main parties' economic policies but exposing the Tories to considerable risk.
Labour is expected to cut taxes, accelerate public spending and announce more borrowing in Monday's pre-budget report. Now their supporters can revive the spectre of "Tory cuts" to funding for schools and hospitals which helped the Conservatives lose the last two elections.