This is terrifying...!

[PanicMode]

www.telegraph.co.uk/comment/7523175/Budget-2010-Labour-is-stealing-from-our-childrens-future-to-buy- votes.html

PM you are right this is truly terrifying. I read this article on the train this morning on my way to work. I agree entirely with Randall's sentiments.

The figures are so mind boggling they are beyond the comprehension of many. If there was any justice in this world Nero Brown and his cohorts would be facing criminal charges for the mess that has been created, the full horror of which is being kept from the electorate until all the votes are safely counted.

What a great future my 12 year old has to look forward to with this level of debt round our collective necks. It must be difficult for Cameron 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.

Tashtodd wrote:
"It must be difficult for Cameron 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."
I was amused to find someone commenting on MN that they thought Cameron's response to Darling's budget speech was too aggressive.

I was pleased to see him get angry and slam his hand down. Bloody hell anyone with a modicum of care for this country should bloody angry. FFS I'm a duel national and Im more ffing angry than a lot of natural patriots. Sadly I have noted over the last few years the places where the union jacks are hung out are council estates "great country this, I dont have to work and I have a car, LCD TV, spend my day down the pub...."

I am so angry at what this country has been reduced too. Now thanks to Browns incompetence and profligacy we are staring into an economic abyss

I hope Cameron continues being angry, the country needs someone who actually cares who has the fire and determination to pull us back from that abyss. Whether we like it or not he's our only hope.

Elenor: Don't understand your comment on my post. My comments do not at all express that I thought Cameron's budget response too agressive. Otherwise totally agree with the rest of your post!

Tashtodd I read another post and made that comment about theirs, not yours Re: Cameron being too aggressive. Cant remember where, I think maybe on the budget thread. Hope that makes sense

Heaven forfend that a politician speaks with passion, that would suggest that they actually care

What is really frightening is that there is a point at which a country cannot ever repay its debt and we are fast approaching it.

It is well known in economics that when the interst rate on the Govt debt exceeds the rate of economc growth plus inflation default is ineitable. At that point, the interest rate accumulates faster than the nominal growth rate of the country's economy.

Japan is getting close to this as its population is shrinking, it has defltion in prices and its firmsw cannot export because of a strong Yen. Greece is in a similar postion.

It may seem a complicated and arcane point but these grim matematics ar now what is effectively facing the UK. This Labour Govt has taken us to the point that it cannot now raise enough tax from the economy to pay the interest on Govt debt. Public spending has to be cut and to pretend otherwise is a purely cynical, politcal and deeply misguided approach that will damage our country for decades.

If you have a job be prepared to pay a huge amount of tax. If you have a job in the public sector don't count on keeping it. If yu have aprivate sector job be preparedto take a pay cut to keep it. Cuts will have to be severe and deep. If we don't do that the bond markets will force us to by refusing to lend the Govt any more money. Watch Greece go up in flames this summer to see where we are heading. The 1970s Winter of Discontent will look like a picnic in comparison.

Elenor:

Okay - all you clever people - please tell me what this will mean for the average person in the street. I am crap at financial type stuff so although I understand that Britain is in a mess financially and we are likely to face cuts that's about it.

Will we be looking at civil unrest for example? Or is that too extreme?

I have glanced at the link but distrust anything coming for most newspapers - not for nothing is The Telegraph known as The Torygraph for example.

So - some independent comment from you folks who know abpout this stuff would be more believable IYSWIM.

Abetadad: sober reading but true I think.

Do you or does anyone know what would happen to things like Premium Bonds if the UK govt started defaulting on debt? i.e if you wanted to cash them in would they still be repaid on demand where the govt has defaulted elsewhere?

JollyPirate - Jeff Randal is a really good financial journalist (one of the few there are) and he is quoting Govt figures for the budget report.

What it means for us we will soon be forced into the same austerity meausures (i.e public spending cuts) as Greece is now facing. We wil have no choice. It means mass unemployment or huge pay cuts for public sector workers. It means massive cuts in pubic services.

Goverments never want to impose the cuts necessary because it is unpopular (see the Greek situation) but eventualy the world capital markets refuse to lend any more money. At that point the Govt simply runs out of money and cannot pay public sector wages, pensions, or buy things like drugs for hospitals, etc. That is when riots start. Again look at what is happening in Greece now.

As we saw in 1976 in the UK when the last Labour Govt did this, the Internatinal Monetary Fund (IMF) is usually called in and the austerity measures necessary are then imposed in return for emergency loans funded by other Governments. In effect the UK Govt would no longer be able to govern as it would be under the control of the IMF and the global capital market until the debt was brought under control.

you might be referring to my post tashtodd/Elenor (you know, you can always raise it on the thread itself rather than commenting somewhere else!)

I thought Cameron's response was rubbish and too aggressive. I want to hear what he's going to do. I don't want to hear shouting and name calling and him going red in the face (largely because I think he had been riled by the Belize taunting). I want answers and his plans and exactly how he thinks he will do a better job.

We've had none of that yet. Why anyone thinks Cameron will be our saviour when they have Osbourne as chancellor is beyond me. The man can barely string an economic sentence together.

We have sold out to the public sector. If you look at employment growth and salary growth, it has all happened in the public sector. I have been in the private sector for many years and this government is killing us.

I don't know if any articles have been written about this but HMRC now has the right to demand payment when they assess you. They have never had this right before so let's just say they slap an assessment on a business for £1m. To be able to defend your case, you now have to pay that amount IN ADVANCE of a tribunal. In this country we are now guilty until proven innocent. I can't go into details but we had one HMRC visit last year which resulted in an assessment being slapped on us. We'd done nothing wrong. The inspector had picked up something he thought might have happened but which hadn't. Luckily that new rule hadn't come into play yet otherwise we would have had to pay the assessment and then wait a year to get a tribunal date. It's worse than Africa.

In addition, HMRC have started applying rules retrospectively. So let's say one rule applied 5 years ago. They have decided, today, that another rule should have been in place and they will apply it as if it was in place 5 years ago. HMRC have announced these measures with great pride saying they will raise billions! Great! At the expense of driving every legitimate business out of the country. We cannot operate in the UK with such uncertainty over tax law.

This government has killed off the private sector and now wants a pop at banking sector which is one of the most important sectors of our economy (some would say too important but with the aggressive tax regime here at the moment, god knows why anyone would come here).

In our sector, we have seen 3 major companies relocate out of the UK this year, meaning hundreds of jobs were lost. It is a serious consideration for us and if we do so, it will mean everyone will be out of a job.

They are literally killing us. And all to pay for public sector final salary pensions, middle management bureaucracy in hospitals and support to win an election. I can see that the schools around me have improved but everyone I speak to in the NHS say v little filtered down to the bottom line.

I'd like to vote for an alternative but I'm not sure anyone has come up with anything solid yet.

One thing I know is that someone needs to do something to save the private sector and persuade companies to come back here and invest in the UK. With such an aggressive HMRC with untapped powers, uncertainty over tax law and huge public debt, at the moment, I wouldn't advise anyone to come here.

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

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.

(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!)

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

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.

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.

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.

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

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

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.

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

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?

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.

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.