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Borrowing rise puts Brown under pressure to cut public spending

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    Borrowing rise puts Brown under pressure to cut public spending

    Borrowing rise puts Brown under pressure to cut public spending

    A massive increase in public borrowing is putting pressure on Gordon Brown

    Chancellor Gordon Brown racked up his worst budget deficit in over a decade and may be forced into a draconian spending clampdown in the second half of the year.

    The Treasury borrowed £25.4 billion in the first six months of the fiscal year, the Office for National Statistics reported.

    That was the biggest shortfall since 1994. The September budget deficit alone was the worst for that month on record, at £7 billion.

    Spending rose 7.6 per cent in the first half of the year - exceeding Brown's forecasts. As a result, he will have to slash public expenditure growth back to 2 per cent in if targets are to be met.

    Yesterday's figures provide fresh evidence of the dramatic deterioration of the public finances in recent years.

    Even though Brown is enjoying a healthy harvest of revenues thanks to higher taxes, receipts are still insufficient to cover the public sector’s growing demands.

    City experts said yesterday that unless Brown turns things around in the next few months, he may end up with a deficit of up to £47 billion for the full year, more than £10 billion worse than he predicted in his March budget.

    The highly respected International Monetary Fund warned Brown last month that there is now a 'critical' need for restraint of current spending.

    Shadow Chancellor George Osborne said: "Today's record public borrowing figures are further proof that Gordon Brown has made a mess of the public finances.

    "Fixing them is going to be a high priority of the next Conservative Government, which will put sound money and economic stability first." The Treasury brushed off the figures, arguing that public expenditure was unusually weighted towards the first half of the year, and that it will slow over the coming months.

    The government is also expecting buoyant corporation tax and North Sea revenues to come to its aid. (AtW: ****ing ***t and his CT that now comes even without first 10k tax free, ffs, they should only apply CT if money are paid out as dividends!)

    But the report is particularly damaging as Brown's tax and spending plans come under heavy scrutiny following the release of a tax report on behalf of the Conservatives.

    Lord Forsyth's Tax Commission advocated reductions of up to £21 billion.

    Tory leader David Cameron is unlikely to embrace cuts anything like that big, but he may reduce the rate of Corporation Tax and the abolition of stamp duty on shares to steal a march over Labour.

    James Knightley, an economist at ING Bank said: "This adds to the weight of evidence that Brown is going to struggle to meet his borrowing targets.

    "It will add to the pressure on him to do something to get spending under control.

    "With the Conservatives talking about tax cuts and people getting excited about is, this has not been the best week for him."

    #2
    oh go on

    let me piss it all away.

    Gordon
    Always forgive your enemies; nothing annoys them so much.

    Comment


      #3
      Nah, just change the 'economic cycle' to be 5 years. The stats would look all rosy again.

      And 5 year plan should suit el gordo nicely. 5 years in prison for theft would be more appropriate, according to some pensioners.
      Vieze Oude Man

      Comment


        #4
        Cycle? I thought there is no more boom and bust, and therefore no cycle!?!?!

        Comment


          #5
          That was the conservative cycle... new labours cycle is more of a merry-go-round, to be played to the sound of 'the Magic Roundabout' (google for it Alexie ), where time has no meaning, and can be changed at will to suit whatever your 'current reality' needs it to be...

          P.S also get a copy of William Shatner singing 'Lucy In The Sky With Diamonds' (not the original, which was by the Beatles, but his deliberate spoof version was voted one of worst records of all time), and listen to it next time you see a new labour politician talking about the economy...

          It's all about an acid trip, but some appropriate lyrics apply to blair, and brown especially...

          "
          Newspaper taxies appear on the shores
          Waiting to take you away
          Climb in the back with your head in the clouds
          and you're gone.......................
          "
          Last edited by mcquiggd; 19 October 2006, 23:28.
          Vieze Oude Man

          Comment


            #6
            Fear not, a redefinition of the target and/or another change in the way public sector borrowing is calculated will ensure Gordon Brown's economic miracle stays on course and that the blame is passed to the next government/chancellor.

            What we need are higher house prices and more immigration.

            Comment


              #7
              Meh, this can be solved with a new tax!

              Mailman

              Comment


                #8
                Alex, where did you get this from?

                Or did you make it up?

                Comment


                  #9
                  Originally posted by Atw
                  Lord Forsyth's Tax Commission advocated reductions of up to £21 billion.

                  Tory leader David Cameron is unlikely to embrace cuts anything like that big,
                  £21billion is not a big tax cut! This is the cuts over a parliament and amounts to approx 1% for each of 4 years

                  Comment


                    #10
                    Originally posted by wendigo100
                    Alex, where did you get this from?
                    Daily Mail.

                    Comment

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