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BrilloPad
15th February 2009, 08:01
http://business.timesonline.co.uk/tol/business/economics/article5734129.ece

BRITAIN faces years of painful adjustment as a result of the debt the government has taken on in the financial crisis, a report says.

Bankrupt Britain, written by City experts, says taxes will have to rise and the level of public spending will have to be cut by as much as £100 billion to put the government’s finances back into shape.

Its author, Malcolm Offord, a City fund manager with more than 20 years’ experience with Charterhouse, looked at the UK economy from the perspective of an investor considering putting money into a company.

Working with colleagues, he calculates that in the absence of government action, the national debt will balloon to more than 150% of gross domestic product over the next 10 years, compared with Labour’s “ceiling”, now breached, of 40%. The priority, he says, is to reverse the “profligate” spending that gave Britain an unacceptably big budget deficit at the start of the recession.

Reducing debt, the paper says, will require cutting the level of public spending by £60 billion by 2014 and £100 billion by 2020. Public spending is £623 billion this year, with a third going on social security.

Tax rises would also be needed, the paper says, focusing on an increase in the top rate of tax to 50%. But raising taxes too much would be self-defeating, hitting economic growth.

A poll for The Sunday Times today shows the Conservatives have maintained a 12-point lead over Labour as doubts about the government’s handling of the economic crisis grow. The poll details are bad for Gordon Brown. His approval rating has slumped 22 points since November, with only 31% of people thinking he has done a good job as prime minister.

Nearly half, 48%, fear that they or a member of their close family will lose their job, while slightly more think David Cameron and George Osborne would do a better job handling the crisis than Brown and Alistair Darling.

Other experts warn that the public finances are facing an immediate black hole, with the equivalent to tax rises of up to 12p in the pound on income tax needed to close the gap.

Martin Weale, director of the National Institute of Economic and Social Research, said: “We see a shortfall of £60 billion relative to [the chancellor’s] numbers.”

On Wednesday the Office for National Statistics will publish analysis of how the government’s finances performed during January.

Jonathan Loynes, chief European economist at Capital Economics, said: “We’re running out of adjectives to describe the state of the public finances, but suffice to say that things are still getting much worse.”

Cyberman
15th February 2009, 10:47
The latest poll today shows the Tories on 41% and Labour on 25%. I sense something draconian such as nationalisation of all UK banks on the horizon as a sure-fire vote-winner. :smokin

BrilloPad
15th February 2009, 11:47
The latest poll today shows the Tories on 41% and Labour on 25%. I sense something draconian such as nationalisation of all UK banks on the horizon as a sure-fire vote-winner. :smokin

All governments suffer issues mid term. It looks very severe : but its not necessarily terminal. Unfortunately.

tim123
15th February 2009, 12:54
The latest poll today shows the Tories on 41% and Labour on 25%. I sense something draconian such as nationalisation of all UK banks on the horizon as a sure-fire vote-winner. :smokin

I can't work out whether that comment is serious or ironic.

(on that basis that I agree the first half is quite likey to happen, but I can't see the slightest reason why its a vote winner).

tim

tim123
15th February 2009, 13:36
BRITAIN faces years of painful adjustment as a result of the debt the government has taken on in the financial crisis, a report says.

Bankrupt Britain, written by City experts, says taxes will have to rise and the level of public spending will have to be cut by as much as £100 billion to put the government’s finances back into shape.

Its author, Malcolm Offord, a City fund manager with more than 20 years’ experience with Charterhouse, looked at the UK economy from the perspective of an investor considering putting money into a company.

Working with colleagues, he calculates that in the absence of government action, the national debt will balloon to more than 150% of gross domestic product over the next 10 years, compared with Labour’s “ceiling”, now breached, of 40%. The priority, he says, is to reverse the “profligate” spending that gave Britain an unacceptably big budget deficit at the start of the recession.

Reducing debt, the paper says, will require cutting the level of public spending by £60 billion by 2014 and £100 billion by 2020. Public spending is £623 billion this year, with a third going on social security.

Tax rises would also be needed, the paper says, focusing on an increase in the top rate of tax to 50%. But raising taxes too much would be self-defeating, hitting economic growth.

A poll for The Sunday Times today shows the Conservatives have maintained a 12-point lead over Labour as doubts about the government’s handling of the economic crisis grow. The poll details are bad for Gordon Brown. His approval rating has slumped 22 points since November, with only 31% of people thinking he has done a good job as prime minister.

Nearly half, 48%, fear that they or a member of their close family will lose their job, while slightly more think David Cameron and George Osborne would do a better job handling the crisis than Brown and Alistair Darling.

Other experts warn that the public finances are facing an immediate black hole, with the equivalent to tax rises of up to 12p in the pound on income tax needed to close the gap.

Martin Weale, director of the National Institute of Economic and Social Research, said: “We see a shortfall of £60 billion relative to [the chancellor’s] numbers.”

On Wednesday the Office for National Statistics will publish analysis of how the government’s finances performed during January.

Jonathan Loynes, chief European economist at Capital Economics, said: “We’re running out of adjectives to describe the state of the public finances, but suffice to say that things are still getting much worse.”


Well that's a statement of the bleeding obvious.

So what's the solution then?

(no Brillo, that comment isn't aimed at you)

tim

Doggy Styles
15th February 2009, 15:52
Gordon Brown's approval rating has slumped 22 points since November, with only 31% of people thinking he has done a good job as prime minister. How is the UK economy expected to recover if 31% of the adult population are imbeciles?

BrilloPad
15th February 2009, 16:56
Well that's a statement of the bleeding obvious.

So what's the solution then?

(no Brillo, that comment isn't aimed at you)

tim

Thats a pity as I have the perfect solution! But as I am not allowed to comment then I will keep it to myself and you lot can carry on being totally seriously f**ked!

BP
PS Actually I am like blockbuster : I haven't got a clue what to do....

dinker
15th February 2009, 16:57
31% of the population are muslims/asylum seekers/council house residents/on benefits.

tim123
15th February 2009, 17:47
Thats a pity as I have the perfect solution! But as I am not allowed to comment then I will keep it to myself and you lot can carry on being totally seriously f**ked!

BP
PS Actually I am like blockbuster : I haven't got a clue what to do....

Sorry, I meant wasn't aimed exclusively at you :-(

tim

HairyArsedBloke
15th February 2009, 18:02
31% of the population are muslims/asylum seekers/council house residents/on benefits.

The only way to be - get with the game while you still can :rollin:

BrilloPad
15th February 2009, 18:06
Sorry, I meant wasn't aimed exclusively at you :-(

tim

Personally I would :-
1. slash government spending
2. disallow mortgages over more than 60% of value of property.
3. disallow mortgages of more than 3 times single income : nothing self certified
4. disallow mortgage allowance against BTL
5. Tax BTL income at 50%
6. encourage people to live within their means : discourage loans/credit cards
7. bring back cane in secondary schools.
8. ASBO type offences of under 21 to be punishable by birch
9. unemployed to made to earn their benefit : clearing up litter etcetc

Actually I probably wouldn't do the last 3......

BP

pmeswani
15th February 2009, 18:19
31% of the population are muslims/asylum seekers/council house residents/on benefits.

That explains the 25%, where does the other 6% come into it?

Doggy Styles
15th February 2009, 19:10
That explains the 25%, where does the other 6% come into it?I'll repeat what I said earlier:
Gordon Brown's approval rating has slumped 22 points since November, with only 31% of people thinking he has done a good job as prime minister. How can anyone, with half a brain, possibly think that Gordon Brown has been anything other than a disaster as Prime Minister?

d000hg
15th February 2009, 19:32
How is the UK economy expected to recover if 31% of the adult population are imbeciles?31% is a pretty good imbecile ratio; perhaps Labour's education policies have actually worked too well and the latest generation of voters are too well educated to fall for their rhetoric. :eek:

PM-Junkie
15th February 2009, 19:40
31% is a pretty good imbecile ratio; perhaps Labour's education policies have actually worked too well and the latest generation of voters are too well educated to fall for their rhetoric. :eek:
I am more of the opinion that their education policy is to dumb down Britain so that people fall for the propaganda and spin?

Cyberman
15th February 2009, 20:22
I can't work out whether that comment is serious or ironic.

(on that basis that I agree the first half is quite likey to happen, but I can't see the slightest reason why its a vote winner).

tim


Do you remember 1997 and the windfall taxes on the fat-cats. Fast-wind to 2009 and we have fat-cat bankers who are ridiculed every day in the media and were also ridiculed last week during their questioning by the parliamentary commission. I firmly believe that HMG with the collusion of the BBC/Peston are orchestrating a campaign to nationalise the banks and win votes.
Bankers are now the most hated workers in the country and that is what HMG have been aiming to achieve. It will be a vote-winner IMO. :smokin

Cyberman
15th February 2009, 20:24
31% of the population are muslims/asylum seekers/council house residents/on benefits.


You forgot the public sector workers who now have 2 out of every 5 jobs. :rolleyes: