Foreign Perspectives

Well, not us directly but the government’s £175 billion borrowing equates to for each family in the UK thanks to the incredibly optimistic UK budget announced today. Actually, it’s worse than that as the borrowing is planned to continue for around a decade and amounts to something like £30k per family over that period.

Naturally, there were the usual increases in taxes on luxury cum non-essential items and, breaking a Labour campaign promise, on higher earners too. Well, tax increases for the higher earners were announced but, as usual, they’re unlikely to be as effective as the government hope for them to be as every tax increase on higher earners results in increased thinking by accountants on ways to avoid paying it thus the claimed £7 billion to be raised won’t be.

One notable piece of generosity is the £2,000 to be paid for those scrapping a car over 10 years old and buying a new one. Unfortunately, it’s going generosity towards other countries as the UK has virtually no British owned car manufacturers. Unless, of course, the likes of Morgan have behind the scenes plans to radically raise the number of cars that they produce.

As always the growth predictions coming out of HM Treasury are something of a finger in the air job but that’s particularly the case this year with a 3.5% decline for 2009 being replaced by 1.25% growth the next year and 3.5% the year after that. Thus there’ll be a swing of 6.75% in the fortunes of the country in under two years. Somehow, I don’t think so.

Still, it could be worse. We could be in Ireland.