Wednesday, December 21, 2005

More Facts On EU Rebate Defeat

HMT has given more detail on the true cost of Tony's EU rebate concession:

'In a written parliamentary answer, the chancellor said the estimated annual costs of the rebate concession would be £500m (or 0.09 per cent of public spending) in 2007-08; zero in 2008-09; £1bn (0.16 per cent of public spending) in 2009-10; and between £1.6bn and £1.9bn a year (between 0.23 per cent and 0.26 per cent of public spending) between 2010 and 2013.'

A quarter percent of public spending is highly significant during a period when, as Gordon admitted in the Pre-Budget Statement, public spending will already be under severe restraint.

Given that much of public expenditure is non-discretionary, we can expect serious anguish in health and education after 2008. And of course, further tax rises.

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