Labour Budget 2010

What happened with today's budget? Well, in short not much.

3 months of better than expected income/expenditure have given the chancellor £11bn to play with that he didn't think he had. The shame his he still doesn't have it. All that's happened is instead of running a deficit for the financial year of £178bn (and that was revised up in December from £175bn) it's expected to be in the region of £167bn.

The fact that as late as December the borrowing figure was revised up tells you how entirely incompetent the Treasury is with forecasting.

There's something very strange in the reporting of finance in this supposed recovery. The basic premise being it doesn't matter if you lose money, so long as you're not losing as much as you did last year. The analogy for this is me going to a wholesaler, buying stock for £100 and selling it for £50 in 2008/09 then buying the same stock at the same price the following year and selling it for £90 in 2009/10.

Does that sound good? No, of course not. Yet, that is what we are expected to celebrate. Over the term of the entire next parliament, no party believes they will get us on a balanced budget in any of the financial years.

Heightened personal borrowing kept us out of recession in 1999/2000 when we were last due to enter one. That is less likely to save us in 2017/2018 when the next one is due. That means we'll get one, possibly two years to dig into our huge debt. When I say huge, the Treasury forecast will make it £1,406bn. If we're very lucky we'll get to pay back £50bn on the capital before we're in the annual red again.

If this is the best thing Labour can say about themselves and their performance that'll make us vote for them again then no wonder we're looking at a change of administration.

University Challenged

This comment in response to Minette Marrin's article on the failure of the Labour's education policies by James Young in the Times today really chimed to me so I thought it was worthy of repeating.

An economics professor at a local college made a statement that he had never failed a single student before, but had once failed an entire class. That class had insisted that Brown's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Brown's plan".
All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A...

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.

No More Tax Rises Confirms Treasury

Treasury Minister Liam Byrne confirmed on today's Daily Politics that Labour can bring down the deficit in 4 years with no more tax increases than those already announced on the Pre-Budget Report.

This means that VAT will not be going up to 20%, as widely speculated, under Labour.

Or at least that was the case up until about 18 minutes into the programme where he says that some taxes will have to go up.

Clear as mud as always.