The Great Debate UK

from Luke Baker:

In for a penny, in for £175 billion

It may not be tax and spend exactly, but it's definitely tax and borrow.

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.

But since the global economic crisis hit in late 2007,  it has become much harder for the government to keep a tight rein on the fiscal strings as growth has taken a hit, unemployment has risen sharply, and tax receipts have declined. 

Last April's budget was a tough one for Labour, but Wednesday's budget may well go down as the one that really showed the government reeling as it tries to keep a grip on the purse strings in some of the most challenging economic circumstances imaginable.

Ireland’s euro pain

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REUTERS– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –

LONDON, April 9 (Reuters) – Ireland’s budget is painful, but insufficient.
Brian Lenihan, the finance minister, is taking an additional 3.25 billion euros out of the economy each year, largely in higher taxes. But that will simply trim the budget deficit to 10.75 percent of national income. The 3 percent eurozone target is a distant dream.

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