Wednesday, March 15, 2006
Brown's Budget Going East
In all likelihood, next week's Budget will be "steady as she goes". Brown's borrowing binge has been sorted by the simple expedient of nobbling his Golden Rules, he's postponed his Comprehensive Spending Review, and he already admitted last year's growth forecasts were wildly optimistic.
In these circs, he'll be free to wibble on about big picture stuff. What better than that "Threat from the East", and how it means we've got to spend yet more squillions on those useless training programmes and R&D Tax Credits etc.
Which is precisely why the TaxPayers' Alliance has produced a useful briefing on why that will miss the point. If we want to compete with the East we need to improve our competitiveness by cutting taxes.
Yes we know the figures aren't strictly comparable, but whereas Brown has pushed up government's tax'n'spend share of GDP here to 42%, in India it's only 29%, and in China a mere 22% (eg see here).
Not that Brown will mention that in his Budget speech. As the TPA puts it:
"Brown and Balls are likely to want to continue to keep tax out of the entire competitiveness debate. But the fact is that tax remains at the very heart of international competitiveness and Brown’s tax rises have made the British economy significantly less attractive as a place to do business".
Posted by Mike D at 11:54 am