Booming Britain....

8 January 2014

Lets see......

.. Car sales up 11%

.. House Prices up 8%

.. British Chamber of Commerce survey shows manufacturing confidence and orders are the highest since 1988

.. Citi forecast over 3% growth this year, much better than Osborne's expectation

.. Employment at a record high

This year it is also predicted that, for the first time since Labour drove the economy so deeply into this crisis, living standards are set to rise.

Yet we still have some serious challenges ahead that threaten the long term recovery.

The government has not yet closed the deficit and is still spending far too much. Borrowing cannot be reduced until the deficit is closed. Yes improved economic growth will help close the deficit but there remains a need to cut back spending and we must welcome Osborne's renewed attack on spending with a further round of £25billion cuts. It is a pity he did not cut more, earlier, if he had we would now be in an even better position than we are now.

We remain far too highly taxed and our tax system is in desperate need of reform. Simple, low and flat taxes are needed to boost economic growth and establish a fairer more sustainable economy.

Also we need a constitutional mechanism to stop future irresponsible governments from buying votes, spending, taxing and borrowing excessively. Government spending needs to be capped to a maximum percentage of GDP.

Remember, all government spending is derived from the private sector and represents a burden that holds back business. The most dynamic competitor economies have public spending at under 35% of GDP sitting alongside flexible labour markets. It is just unacceptable for British governments to hamstring the economy by spending, as Brown did, 53% of our GDP. No wonder we got in such a mess with 47% of the economy paying for 53% of it.

British public spending remains appallingly high at a little under 50% of GDP and needs to be brought down by the end of the next Parliament to less than the 35% of GDP level.

If governments want to spend more then it should only be possible to be taken from an increase in GDP not by sucking in more of our GDP which also ends up creating a spiral of decline forcing down our GDP, in other words depleting the wealth of the country. Such a rule limiting the amount a government can spend would have an electrifying effect on the way we are governed that would massively benefit the whole nation encouraging the right priorities and better government.

Brian Dixon wrote:
and poverty has gone up 30% in the last 3 years,more people are using food banks than before osbournes cutbacks.evan those that are employed.

gidions sucsess can only measurd if no one person is using a food banks and have a 10% surpless at the end of the month.
Guest 745 wrote:
Barry why is it good that house prices going up 8% a good thing?

And why is it ok for Osborn to be moving privet sector railway debt on to the taxpayers?

3 % growth it good if true.
Guest 655 wrote:
Brian - I wont go into the absurd poverty measurements used but regardless of that people being worse off is a direct result of the poor economic management over 13 years that created the biggest economic bust we have experienced since the great depression.

To correct that you have to get the economy right and that is like turning around a supertanker.

Nevertheless things would be better now for everyone, including the low paid, if Osborne had cut government spending more deeply and quicker, cut taxes, specially the higher rates, and went about more radical supply-side reform. He did at least take us in the right direction, unlike that idiot in France much loved by Milliminor, whose foolish socialist remedies have deepened their crisis.
Guest 655 wrote:
Keith - House prices are an indication of more confidence and that the housing market is moving again. This stimulates whole sections of the economy in building and furnishings. That 8% up is from a low level and care needs to be taken not to create another bubble. This is why interest rates are likely to go up before Carney originally said they would.

As for the pension. You need to remember the pension deficit was created to a large extent by government action. The scheme is based on a public sector pension arrangement remember. The private sector cannot afford such pensions any more and his move was to protect the interests of pensioners and the scheme members. Long-term what ho did was actually the cheaper option for the taxpayers. The whole issue of public sector pensions has still not been properly addressed, even despite the reforms they are still far too featherbedded and more reform is needed.
Brian Dixon wrote:
barry,talking of tax,it might help if vat was cut to 15%,fuel,tobacco and beer duty was cut by 2/3rds,so people would be able to drive to work,smoke and drink [but not in the same place anymore].food prices would come down along with other goods for wvery day living.

tax and ni at a sencable level allowing the lower paid to have more spending power,the upper level should remain the same until the inland revenue gets its act together and gets all the money owed by those who are dodging paying the correct amount of tax.
Guest 655 wrote:
Simplification is what is needed and the cutting of the most economically damaging rates. Taxes on income, particularly the high marginal rates are a problem for economic growth as they disincentive extra work, effort and risk taking. I have many examples of small business people just keeping their income at the 40% level who do not see it worth the extra work only to lose 42% to the taxman, imagine how much worse it is at the additional rate.
Guest 698 wrote:
Not forgetting shopkeepers and cafe owners who open limited hours to avoid busting the VAT threshold. VAT is the scourge of micro-businesses.
howard mcsweeney1 wrote:
the recovery still needs to show people that there will be more jobs, more hours and no drop in pay rates. having said that polls show that the public are feeling more confident in there future finances.