Post on the economy - 6/12/2010
Posted by Jacob Rees-Mogg, MP for North East Somerset, at 17:06, Mon 6 December 2010:
One swallow does not make a summer, even less does one good economic forecast mark a recovery. However, although there may yet be setbacks, not least because the global situation remains so uncertain, the Chancellor’s forecast on growth this week is encouraging.
Previously, forecasts have been produced by the Treasury and have had a large dose of political saccharine added. This tended to make them unreliable and if they were ever right it seems to be more luck than judgment. The virtue of the new figures provided by the Office of Budget Responsibility is that they are independent and the chairman, Robert Chote, has been critical of the Conservatives in the past. This gives the latest picture greater credibility.
It suggests that the economy can grow at over two per cent for each of the next five years with rising employment and inflation under control. The engines of growth will be business investment and exports. The former is helped by the more certain political climate while the latter is aided by our flexible currency. It is to the Conservatives’ credit that they never wanted to join the Euro and that public spending is coming under control.
It is always worth remembering that government borrowing is merely taxation postponed. It is money that might otherwise be available to business or spent by individuals. It also has to be raised in international markets and the shocks in Euroland prove that this is not always easy. Thus, George Osborne may deserve some credit for taking early action to get the ship of state back on an even keel.
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Posted by Melvyn Gill ARCA, 01:30, Tue 7 December 2010: (Is this post abusive?) #
Do you mean by flexible currency the continuing decline of the pound against stonger currencies? Taken the Aus Dollar for example. We have seen a big decline in the £GB against the AusDollar from 2.20 Aud to 1.58 Aud in 2 years and this decline in the £. fuels GB inflation, as most of the imports come from China. They consistently refuse to revalue their own currency. Whilst it helps our manufacturing and exports, the idea of putting up interest rates to curb such inflation only reduces sales as has been seen recently, and as we have seen recently, The EU are desperate for us to join the Euro which would spell the end of British Democracy, we would then be totally under the control of the unelected bureaucrats in Brussels as seen by Irelands predicament. Our Parliament would become a toothless talking shop with no powers, thanks to Edward Heath and later UKI leaders who have gradually handed over all authority in GB to Brussels, the Euro Parliament is a body without any powers, who just exist to give a veneer of respectability to a discredited body of unelected bureaucrats.
We join the Euro at our peril. May this government NEVER give in to any attempt to pressurize Britain to join the Euro which would be the final nail in the coffin of British Democracy.
M GILL
Posted by John Doran, 11:07, Tue 7 December 2010: (Is this post abusive?) #
The Aus $ will take a huge hit as a result of events in Adelaide today ....
Posted by peter wenban, 13:10, Tue 7 December 2010: (Is this post abusive?) #
It is so frustrating to see our hard earned taxes being paid over to the EU against the majority in the UK. Although G Osborne has done a fair job he seems intent on following the precedent of what has been agreed hitherto requires to be honoured.
I do not agree. Our govnmnt needs to insist that any money we pay over has to go into a fund to assist EU euro coutries to escape the euro and embrace their own currency. I believe this is inevitable within a few years at the earliest so let us all get on with this NOW. Any other coperation should be conditional on this.
Let us create an interdependant europe cordinated only by Brussels. Let us set reducing real term budgets for the commission. Let us in short start being free in our sovereign states.
Peter Wenban
Posted by John Hudson, 21:52, Tue 7 December 2010: (Is this post abusive?) #
The concentration on growth does not actually help much as much activity is counterproductive. The true measure should be balance of payments. To help with this we should be increasing vat on consumable electronics to say 33%, as most of these are imported. This happened in the 80s when the rate went to 25%. This would liberate the utilities to reduce vat to 0%, thereby helping everyone in society, and reducing the measured inflation.
There should also be negative vat for all registered taxable builders, to encourage house repairs and insulation use, but not available to non taxpayers.
Most small companies are created to reduce tax on their owners/directors. While there are reasons to reduce company taxation, eg reinvestment, there are few good reasons for making the share dividends so beneficial to the owners when non shareholders have to pay tax in full.
John Hudson, Keynsham