The Budget Part 2: our increasing debt

We all know of the government overspend, and how it’s adding to the total debt that we owe to people who’ve lent the nation money. It’s worth looking at the data in the Budget document. There’s an easy to read online version of the budget, if you you’re not interested in downloading each chapter.

Anyway, two key tables are what the nation is budgeted to spend in the year, and what it expects to collect in taxes. Spending for 2010-11 is £697 billion, while income is £548 billion. That’s a £149 billion overspend. Absolutely ruinous. Here are the two tables from the Budget Red Book:

 

 

The Budget Part 1: Quick overview

I watched George Osborne deliver his first budget. I thought it was a confident performance from a much underrated man.

The standout item was obviously the increase in VAT by 2½%. Seems to me that this was a sensible tax rise, far better to tax consumption than earnings. I’m not certain I fully understood the fuss created by the likes of ConservativeHome and others who were arguing against a rise in VAT. It’s an easy tax to collect, and continuing not to add VAT on food, children’s clothing or books, is also sensible.

I liked Osborne’s candid approach to the listening public. Osborne is an astute politician, can it be that I don’t recall hearing the words cuts or Gordon Brown.

You might like to read what these columnists have to say about the budget:

I imagine that’s enough to digest. I watched BBC News after the budget and found Stephanie Flanders comments to be both lucid and intelligent, but switched over when Robert Peston began speaking, my is his delivery irritating. Final point, I was surprisingly impressed by the LibDem Chief Secretary to the Treasury, Danny Alexander.

Ask the Chancellors: reactions

Here are some of the opinions on Channel 4’s Ask the Chancellors TV debate.

Review of ‘Ask the Chancellors’

First reactions to the Channel 4 Ask the Chancellors TV debate:

  • Positive: Good format, clean uncluttered studio, well moderated by Krishnan Guru-Murthy, and pretty good questions, and an attentive and well-mannered audience. Reasonable bonhomie between the three. Little needle between them.
  • Negative: Tax and spending is a function of policy choices, just focusing on the Chancellors is not all that revealing. Asking for promises to not raise income tax or VAT will never earn a sensible answer. So to that extent it was, yet again, about character and trust.

Stand out moments:

  1. Alistair Darling’s occasional humour lightened the atmosphere.
  2. George Osborne scored some nice debating points over Alistair Darling.
  3. Vince Cable saying “the country will not be held to ransom by pin-striped Scargills”. A good line to think up before the debate, but its delivery was like a spear through the heart of any City worker.
  4. Vince Cable forced to accept that cuts will be ‘savage’ by Guru-Murthy.
  5. George Osborne’s best line, “At the moment we borrow money from the Chinese to pay for the things they make in China. We have to start making things again.”

Policy descriptions

  • Alistair Darling relied on his last Budget to say what he’ll do. The vapidity of that Budget made Darling’s policy positions weak. He delivered his answers and pitches at the start and end with good grace and the humanity for which he’s held in high regard.
  • Vince Cable was the most explicit in terms of cuts agenda, which the audience seemed to warm to. On deeper reflection they can be seen as a rag-bag, cutting two planks of our strategic defence [Trident and Eurofighter] before a defence review is irresponsible. But hey, this is a quick-fire TV debate, not a detailed policy analysis. The outright pitch to govern the country had a touch of hubris.
  • George Osborne kept away from the detail of cuts for which he may earn criticism, although it was sensible politics to stay out of a bidding war with Vince Cable. Don’t think the  line ‘we’re in this togther’ worked well in a debating environment. Was at his best later on in the debate talking easily and clearly about the need to start on the deficit and debt now. Pleasing recognition of the power of the voter, saying,” It’s your choice”.

Performances. Unfair to mark out of ten. There were no knock-out blows, and no slip-ups. Darling was solid, dependable, open and honest [Update, on reflection not true]. Cable was somewhat self-regarding, keen to list actions needed which may not have been as sensible as first thought. Too keen to find criticism of both Labour and Conservatives. Osborne was authoritative and more keen than Cable to say he’s part of a team. Serious, sharp and his age was an advantage over the older men. Interesting that I observed that.

Overall: Enjoyable, but not riveting. The Leaders’ Debate is the one that counts. Now I’ll toddle off to read what others have to say.

How odd, Osborne gets good press from the Guardian

Just read Michael White’s blog article In defence of George Osborne, sorry should say Sir Michael, in the Guardian, where he starts off with:

“I instinctively like him and I don’t think he will do all the stern and fearsome things he says he will when he reaches No 11”

Must be partly due to George’s excellent Mais lecture this week. I’ve read the lecture, sure it doesn’t identify the cuts in public expenditure that need to be made, but it was never going to. Heck, this is a pre-election period. It’s all about when to start cutting, and George has correctly concluded we must start this year.

I must say it’s very odd, George Osborne is the Tory that Labour love to hate.  To read a pean of praise from the Guardian is surprising.

Don’t get caught smiling

Some years ago, I remember reading of a chief executive saying that when cameras are around he made sure he was never caught smiling, even when reporting spectacularly successful annual results.

george-osborne1Why, he said he could always rely on newspapers and the media to choose a picture of him smiling, especilly so, when reporting dire financial results. Shareholders and customers would not be happy with that, he said.

Has George Osborne, Conservative shadow chancellor, adopted this attitude. I think so. Recent pictures of George give out an aura of seriousness and gravitas. Quite right too. These are serious times. George’s media handler is sure to remind George, no smiling, ever.