Saturday, March 27, 2010

It’s All Greek to Me

I see that the Guido Fawkes weblog has picked-up on Gordon Brown's claims that "because UK debt levels are lower than other European countries he can run Greek-style deficits." This ignores all the debts that the taxpayer is on the hook for even if they are off the books. Local government pensions are just one example: Bloomberg is reporting that English local councils' pension plans are underfunded by £65 billion – all off the books making it look as if the UK has lower debts than it really has.

It adds: "The national debt figures have been fiddled to also ignore the billions in PFI deals that are off the books but for which the taxpayer is on the hook."

There's also the pressing matter of 'Brown's Bottom', as shown in the graph. Whenever the Prime Minister is asked, he retorts that he should be asked: 'Was it the right judgement to sell gold at the bottom?" In the past he has replied that he bought euros that have had very little return over above what the Bank of England could have got from leasing gold out to short sellers and nothing like the 300% return from holding gold over the same period. As a consequence, it's easy to understand that selling gold was Brown's £7 billion misjudgement. I guess we can all make mistakes!

Beyond all this, it's very hard to find any publication that has anything positive to say about last week's budget and Channel 4 News were absolutely scathing once their team had an opportunity to look through the finer details. The best analogy I can think of is 'Smoke and Mirrors', appearing to give something away with one hand and promptly taking it away and more with the other. However, the most dramatic changes are timed to go off after the General Election, such as the increases in National Insurance, petrol prices and of course the real impact of the end of transitional relief for business rates.

"The Chancellor giveth and the Chancellor taketh away. God bless the Chancellor!"


Tony Beachcomber said...

Leasing Gold, is that another retrospective Conservative policy on Gold.

The Rock said...

Is it not funny how some people can twist every disastrous decision of our appalling Labour government round so that somehow it is down to the Conservatives. Face reality, selling off our gold reserves at the time Brown did it was a bad mistake but then, isn't the man himself a bad mistake that his party must sorely regret.