Friday, 21 November 2008

Biggest deficit since records began reveal state of public finances

The Telegraph report:
"Borrowing has already hit £37billion since the start of the financial year in April, is £16.9billion higher than at the same time last year and just £6billion below the £43billion full-year projection given by the Chancellor Alistair Darling at the Budget in March.

The deficit reached £1.4billion last month - the first in October for 14 years. October is an important month for corporation tax and usually yields a surplus, but this year proved an exception as a looming recession hits tax receipts and forced the Government to pay out more in unemployment benefits.

Andrew Goodwin, economic advisor to the Ernst & Young ITEM Club, said that the figures highlighted the "shocking state of the public finances, with borrowing rising alarmingly."

He said that although the Chancellor is likely to announce a package of tax cuts at the Pre-Budget Report, the Government is certain to raise taxes and cut spending once the economy is on the road to recovery, because it can only afford cuts now through increased borrowing.

"Had the government been more disciplined when times were good it would have more room for manoeuvre now that we are entering recession. Higher taxes and/or lower spending are certain once the economy has been restored to health," he said.

The Government's £43billion projected borrowing is now far out of reach for the Treasury, and Mr Darling is expected to rip up those projections at the Pre-Budget Report.

Economists at Capital Economics believe that borrowing could be as high as £70billion this year, rising to £150billion over the next few years."

Meanwhile that most intelligent blogger Dizzy Thinks has produced three fine posts showing Gordon Brown's record on predicting borrowing compared to the reality and why we shouldn't believe a word this most despicable man ever says. From Dizzy's first article comes this information:
" "borrowing for this year and future years is therefore £27 billion (2003), £24 billion (2004), £23 billion (2005), £22 billion (2006) and £22 billion (2007)." Budget 2003

"borrowing for this year will fall to £34 billions (2004) and in future years fall further to £33 billions (2005), falling again to £29 billions (2006), then falling to £28 billions (2007), £24 billions (2008) and £22 billions (2009). Budget 2004

"[it] will be £34bn (2005) this year falling to £32bn (2006) next year, then falling again to £29bn (2007), falling to £27bn (2008), then to £24bn (2009) and then £22bn (2010)." Budget 2005

"[borrowing] will be £37bn this year, £36bn next year, then £30bn, falling to £25bn, £24bn and £23bn in 2010-11" Budget 2006

"the figure for [borrowing] this and future years will be £35 billion (2007) - over 1 billion less than forecast at the Pre Budget Report - then 34 (2008), 30 (2009), 28 (2010), 26 (2011) and 24 billion (2012)" Budget 2007

See that? £10bn leap in the first to second of the predictions, and then he is out by x billion each year except for one where his incorrect prediction for the previous year doesn't even manage to cancel out his earlier mistakes."

As Dizzy says in his second piece -
"Debt is not down, it has risen year on year whilst he stood up in Parliament and said it was always coming down. The man is a complete and total liar."
True, but so long as Gordon Brown is protected by the spinning of Mandelson allied to the willing propagandists at the BBC he may not be uncovered for the knave that he is.

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