Monday, April 27, 2009

The Economist lays into Gordon Brown

In the leader this week, the Economist talks about the latest UK budget and describes it as "a dishonest piece of pre-election politicking", concluding that "the public is losing patience with him, and so is this newspaper".

It describes his strength as "dour pragmatism", but that he resorts to scheming and incompetent tribal politics.

Gordon Brown brought "two all-too-political sleights of hand: a string of over-optimistic economic assumptions and the misleading message that soaking the rich could absolve the other 98% of the population from personal sacrifice"

It assumes the UK economy will be growing by the end of 2009, and will grow by 3.5% in 2011, meaning public sector spending need only grow at 0.7% that year, which the Economist says is "a far more optimistic view than either the IMF or most private-sector economists take. No prudent prime minister would have allowed it." The prediction that state spending would go up so little was due to strong economic growth.

The implication being that assuming Labour loses the next election, the Tories face cutting spending significantly to meet this target if the economy does not recover so rapidly.

The higher tax on incomes over £150,000 is just as problematic, as it fails to address the need to drastically cut spending (or increase other taxes if that isn't done).

The Economist concludes:

"This must seem like clever politics to Mr Brown and his crew: folk have been inflamed by the greed and grubbiness of bailed-out bankers. In the short run, a bit of class war may work. But, like Nixon, Mr Brown is already struggling to escape the suspicion that he has a grudge against the world. And for every voter who likes the idea of soaking the rich, there may be several who remember that Labour pledged at the last election not to raise tax rates during the life of this parliament. "

It is worse than that, as the tax free allowance starts withering above £100,000 - a psychological threshold that now says "don't bother".

The Labour government has pretended for far too long that the top rate taxpayers will tolerate being milked for the inefficient and inept NHS, and the enormous welfare sector that includes huge state spending on housing, cheap education and a multitude of programmes for business and the general populace. The truth is UK taxpayers can't afford it - the Tories also know that if they win in 2010, they will have to tell taxpayers this, and cut spending, harshly. Then Labour will say how "cruel" the Tories are, without proposing to hike taxes up by a similar proportion.

It shows how utterly bereft of moral authority Gordon Brown's government is, systematically wrecking the public finances for the next government, delaying the inevitable, so it can blame the Tories for doing what could have been done years ago - balance the budget.

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