Mar 21 2007
The questions Mr Brown will not answer in his budget
Amidst all the self congratulation about the UK’s economic performance there will be little interest in a sober appraisal of the weaknesses as well as the strengths of the UK economy.
We should ask these questions:
Why has Ireland grown three times as quickly as the UK over the Brown years?
Why are the Irish now enjoying higher living standards than us?
Why are companies leaving the UK to establish head offices elsewhere?
Why has UK productivity fallen over the Brown years?
Why do we now have higher inflation than our main competitors?
Why do we have such a large balance of payments deficit?
??
The answer to all of them is the same. It is because Mr Brown has taken far too much money off individuals and companies in tax, and wasted far too much of it on ill judged spending in the public sector.If he had spent some more money on extra nurses and teachers it would have been fine. Instead billions have been hurled to buy in computer systems, consultants, administrators, PR machinery, glossy brochures and?? to give large pay rises without asking for improved working practises.
Ireland has grown faster because it set much lower business taxes than us, and has a higher standard of living because the overall tax burden is lower.
Companies are leaving the UK to pay lower taxes in places like the Netherlands.
Productivity has fallen here primarily because the public sector has wasted so much of the money given to it. In some parts of the public sector productivity is falling – under this government you have to keep putting more people and money in to achieve the same output.
We have higher inflation than elsewhere partly because Mr Brown has hiked public sector taxes and charges – student fees and motoring taxes figure in our cost of living.
We have a large balance of payments deficit because so much resource has been diverted into the public sector, away from export earning businesses. Over 1 million manufacturing jobs have gone on Brown’s watch.
I will welcome moves by Mr Brown to start to put right his mistakes. If he carries on reducing the overall public sector workforce, as he did in the last quarter, that will help. If he now seeks improved output for more pay that would help. If he cuts Corporation Tax that might defer the departure of more companies to lower tax countries.
It is time for change. Is Mr Brown up to it? Can he remarry Prudence?
4 Responses to “The questions Mr Brown will not answer in his budget”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
“Companies are leaving the UK to pay lower taxes in places like the Netherlands” – If Barclays does go then all the major banks will have to follow.
When I went to Eire I was amazed at the number of projects being funded by the EU. Has that helped growth?
The main reason for Ireland’s advantage is the tax rate.Scotland gets a lot of funding from the UK government, but it does not create a fast growth rate.
Ireland cut taxes & started fast growth in 1989 so it slightly predates Gordon. Nonetheless you are right about the cause – most of Ireland’s subsidy from the EU was naturally enough, in agriculture & this traditional Irish staple has grown slower than the rest of their economy.