I’d love to rattleoff a great long piece dissecting the Pre-Budget Report for you this morning, but I’m afraid there’s not much to say.
Absolutely nothing of consequence will be tackled until after the election. At that point, assuming things stay the same, we’ll all pay more tax. We’ll probably end up with worse public services (unions are unlikely to take the proposed pay cuts sitting down, for one thing). And our pensions will be primary targets for yet more government pillaging.
That’s the short version – I’ll leave it to my colleague David Stevenson to go into more detail on our blogs page: Darling ignores Britain’s biggest problem – debt. But for now, let’s look at what else was going on in the world while Alistair Darling was making his party political broadcast from the Pre-Budget pulpit…
Fear returns to global markets
While Britain was gamely ignoring its own nasty-looking budget deficit, global jitters continued over more obviously troubled countries.
Stock markets across Europe ended the day lower, after Spain had its credit rating outlook downgraded from ‘stable’ to ‘negative’ by ratings agency Standard & Poor’s. In other words, the agency didn’t actually slash Spain’s credit rating, but it’s getting closer to doing so. S&P reckons that Spain’s government hasn’t yet done enough to tackle the state of its finances or the economy, and so both will deteriorate further than expected.
Meanwhile, Greece – which is in a far worse state – is under heavy pressure to deal with its deficits (you can read more on Greece’s problems here: The biggest threat for 2010 – countries going bust). And while Darling was trying to distract the electorate with taxes on bankers’ bonuses, his counterpart over in Ireland was outlining one of the most brutal budgets his beleaguered country has ever seen.
In his second emergency budget in eight months, Irish finance minister Brian Lenihan cut public sector pay by up to 6%. Benefits were also cut. And there was even a 20% pay cut for the Taoiseach. (Although the fact that the head of the Irish government is among the best paid leaders in the free world, does give you some idea of why Ireland needs to cut public sector pay so sharply now). Ireland’s economy is set to shrink by 7.5% this year, but Lenihan hopes that the cuts should prevent the budget deficit from rising above 12% of GDP – the EU has given Ireland until 2014 to get its deficit back below 3%.
Dubai’s problems aren’t going away
….read more HERE.