This is terrifying...!

If Labour gets in again some analysts are predicting that Britain will lose it's AAA status - Govt Bonds will remain unsold and then it will be all down hill until the International Monetary Fund steps in to sort out the mess (again).

While the UK remains addicted to spending more than it should we are heading down a very slipery slope indeed.

I only hope that if Labour do get back in they start to take this issue seriously instead of continually burying their heads in the sand. Of course if the Tories get in they will be in the unenviable position of being blamined for the tough measures that will need to be taken.

No winners there then.

To answer the question on Premium Bonds. We are a way from actual default at the moment and I think the Govt would politically do all it could to avoid defaulting on Premium Bonds that are generally held by UK voters.

It is debt in the form of Gilts (Govt Bonds)that will be defaulted on first.

Alouiseg/Tashtodd - agreeing with you too.

This all happened in the 1970s. DW knows an old man who lives in the USA. He still fervently regards himself as British, holds a British passport but emigrated at about the same age as me now with his family when it became impossible to run his business here.

It seems like no one actually cares this is happening.

PanicMode - that is just shocking and combined with the new HMRC powers that foxisocks highlighted it is arguable whether it now verges on a human rights abuse. Tax has become nakedly politically motivated to the point of arbitrary expropriation of assets.

purits - thanks for your good wishes. Do you live in the UK? Would you still leave? Immigration into NZ is fairly easy if you have the rights sklls.

ElenorRigby - I find myself always agreeing with your posts so can see why NZ would be atractive. TBH we have ties back here with elderly relatives so can understand how torn you and your DP would feel about a child.

Had a chat with DW about this thread and the newspaper headlines today and we just feel we have weighed it up long enough and its now or never.

sorry Elenor, thought you were talking about my post

bunny, it is so hard at the moment. I feel for you and dh. I hope you manage to pull through. Just wait till next year (tax year 2011/12) when we (employers) will all be paying an extra 1% in employer's NI and the employee's will be paying an extra 1% too .

yes abetadad, I know what you mean. And 2 years is a pretty average time at the moment to get some sort of finality in a claim. Is totally ridiculous.

It is all so sad - feels very much like our country has has slipped away from us....

Would the last person to leave the country please turn out the lights.

Sorry I should have said will he last net contributors to leave the country please turn out the lights.

ABetaDad, good luck with your move.
DP and I would leave for NZ in the morning save for the fact that DP has a daughter from a previous relationship and has shared residence for her. But for that we would off like a shot.

I'll look out for you when I'm having one of my insomniac moments.

Thanks. We have had similar things said to us too so going with eyes open and without the rose tinted specs on but you are right the relative decline of the UK has tipped the balance somewhat.

TBH we wouldn't mind going back to the 1980s but with good broadband and the internet the world is a lot smaller now so we hope we will feel a lot less cut off than it might have been 30 years ago.

I'll still be on MN.

We thought of moving to NZ, many moons ago. Someone said that it was not all it was cracked up to be because it was thirty years behind the times and who wanted to live in 1950's Britain?
Nowadays, a one-generation-ago Britain looks a lot rosier than current-day.

Good luck to you, which ever you decide to do.

purits - we are leaving because of the state of the country. Pure and simple. For the last year I have been looking at setting up a business. I have now canned the idea largely because the Govt has made it impossible to earn a sensible return.

Yesterday, I spent the day working on applying for a visa to New Zealand with the objective of becoming a resident. It may not work but me and DW feel we should give it a go. We are the embodiment of what this country has done to people who just want to work hard, make a decent living and bring up their kids in a safe place with a good free education system. In other words we feel we want pretty much what everyone on MN wants but this country does not now offer it.

We are going to New Zealand because they have a sensible approach to tax and public spending, a sensible pro-business stance (without caving in to the bankers), a forward looking Govt system, a very good state education system like ours used to be in the UK and a relatively orderly and crime free society without draconian intrusive rules.

I ams sure NZ has its downside and know the grass is greener etc but we just want to gve it a go before we get too old and our DSs start in secondary school. At least give our DSs the chance and choice of not having to pay the taxes that will be required to pay back all this Govt debt.

ABD: I read the other day that you were thinking of emigrating down under. Can I ask why - is it for personal reasons or because of your assessment of this country's financial situation?

God, that is scary. Will have to re-read sans children later.

foxinsocks- very salutory posts about HMRC. I have had the same experience a few years ago and their new right to levy the tax before the Tribunal is utterly wrong.

It could put a business under and I doubt t would be easy to get compensation in the event of an HMRC error. I fought for 2 years to get proper compensation for an HMRC error - even though they had admitted they were wrong.

foxinsocks and bunny3 just saw a guy from the Institute of Directors who have surveyed their members about the Budget

Darling's proposals get thumbs down from business leaders

Thehills: too late to make a change even if it was warranted (which I am not convinced it is) . It would convey a sense of panic and the press and opposition would savage them. Osborne not acting in isolation, he has Hammond and Clarke as part of the economic team both of whom are highly rated. Surely people need to look at the team as a whole

I havent read all of the posts but I know an awful lot of people will not be voting Conservative because of who will become C of Ex, DC needs to make a change NOW otherwise his chances will be scuppered as PM (IMHO)

This country is on its knees and it is largely because when Gordon Brown was Chancellor he let the banks have carte blanche.

now, I am bowing out of this thread as it is Saturday and I need to go and find the Times and see Rivens interview.

Lots of people (including journalists) get confused at the difference between government debt and deficit. To put things in simple terms:

Think of deficit as an annual overdraft - the difference between what the government gets as income and what it spends. (Like a person on £20k spending £25k every year. Obviously unsustainable in the long run.)

Government debt is the total amount owed by the government. (Like adding together a number of annual overdrafts of £5k).

When Darling talks about halving the deficit in 4 years, that still means that government debt will increase. (Like saying the fictitious person on £20k will cut their spending down from £25k to £22.5k - they will still be adding to their total debt).

As government debt gets higher, then it will cost more to service that debt. 1.The total amnount outstanding will grow. 2. Interest rates will be higher because less people will want to lend. 3. Effect of compound interest.

Debt repayments in 2009 were around £35 billion. (For purposes of comparison, Defence budget was £35.3 billlion). Future ebt repayments will be progressively higher.

Foxinsocks, dh runs his own business too. He employs 3 full-time staff and around 7 part-time ones. He is just about keeping his head above water and the constant demands (higher NI, corporation taxes etc) from the Government are killing the business. If he goes under his staff will too.

I agree Cameron not ideal but someone has to make cuts in public spending. We cannot delay the inevitable forever. We are virtually bankrupt as a nation. We simply owe too much. If Labour get in I predict more reckless spending and a pound that is so worthless we will all be poor. As the pound devalues, petrol, food, heating and everything else that relies on imports will rise in price out of our reach.

Foxinsocks wrote:
"(you know, you can always raise it on the thread itself rather than commenting somewhere else!wink)"
Sorry I am always never have much time to post, too busy planning for global economic Armageddon

Have to disagree with you about the aggression as someone else said "to face Brown and his morons gurning and joking across the green benches every week without wanting to physically beat the crap out of him for what he's done to us all."
Brown has sold the country down the river. Its time we all got angry.

As for Osbourne I just hope Ken Clarke is able to operate him remotely.
The choice is between sticking with the shower that have taken us to the brink or take a chance with a Cameron government. Not much of a choice but I would give Cameron a chance.

FoxinSocks very interesting business perspective and quite scary too.

They really could not have made a bigger mess if they had tried...hmmmm

(oh and when I said they have never had this right before to collect on assessment, they have had this right but businesses had a bit more leeway in wriggling out of it . Now that leeway has been taken away for all but the most serious cases. It would be fine if the business sector felt that HMRC was reasonable, which is has been up until a few years ago, but they are now extremely aggressive, driven by the fact that they have to collect more money! We are aware of 3 companies with basically speculative assessments taken out against them. An HMRC worker confided in one of their lawyers - they said, very hush hush, that it's now worth their while taking everyone to court because of the amount of PAYE/NI they make off the fact that lawyers have to fight the cases. I mean ffs!)

What it means for the average person on the street. Well I've been looking at this picture a lot lately

As a BetaDad said if we default on our debt the consequences will at best be dire. A Labour government lacks credibility with the markets and would be make default more likely. I am no Tory but they imo are the best hope of stopping the default from happening.

I have sold one of my car's and am thinking of selling the other. We are downsizing from a 3 bed house to a 2 bed if an effort to survive this. That's how seriously DP and I are taking this.

and btw, that's not a political viewpoint of mine. It's first hand experience of trying to run a business in this economy.