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The 2020 Public Services Trust Blog

Tuesday, March 30, 2010

Lights, cameras, action…

By Ashish Prashar

Last night the chancellors squared up in a the first live TV debate in the UK and although it wasn’t always electrifying the programme was certainly a triumph. The three would be chancellors clashed over how quickly the deficit should be cut, tax and what to do with the banks but there was concensus – the candidates were “all agreed that the cuts would have to be tougher than those imposed by Baroness Thatcher in the 1980s.”

In a fiesty hour-long debate the chancellors started off by talking about their personal qualities but it really got going when Alistair Darling and Vincent Cable ganged up on George Osborne to heap derision on the Conservatives’ proposed tax cut. Then the Chancellor attacked Osborne saying he “did not have a single penny in the bank” to pay for his plan to reduce National Insurance contributions and that he was taking a terrible risk… and with Osborne on the ropes Cable weighed in.

Vince Cable went from strength to strength by simply telling the truth. He won the most applause by presenting himself as the man who saw the recession coming, adding “we are not beholden to either the super-rich or militant unions” and winning the biggest cheer of the night when he described people unhappy with 50p tax as “pin-striped Scargills”.

They all criticised the financial sector and the banks in particular came under heavy fire. There was also consensus on public sector pensions until Darling pointed out the Tories’ failure to support Labour on care for the elderly. Osborne then accused Darling of stealing the Tories policy on stamp-duty, Darling replied with “there’s nothing like cross-party consensus Geroge” getting his biggest laugh of the night.

Darling did boob on the death tax and Osborne’s position on child tax credits still remains confusing.

So what’s my verdict?  Well, Darling made no big mistakes. There were a couple of decent gags that got a few laughs from the audience and some flashes of passion, which may have surprised some. Osborne stood his ground and certainly looked calm. However, he made little of the National Insurance announcement and sometimes looked like he was being ganged up on. Cable threw and landed the most punches, and in my opinion secured his place as the people’s favourite by smashing MPs and bankers, and clobbering Osborne over his IHT cut.

This was always going to be a warm-up to the main event; the leaders’ debates. Although I don’t think they will have the same drama and impact as the US Presidential debates they will certainly be interesting.

One last quick note Krishnan Guru-Murthy was excellent and played it really well… Watch Ask the Chancellors!

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Thursday, December 10, 2009

Borrow more, borrow now…

By Ashish Prashar

There was very little change in the borrowing figures in yesterday’s Pre-Budget Report, which is impressive given the turmoil of the last year. The Treasury also estimated that the cost of bailing out the two state-backed banks will now only cost £10bn and £50bn as previously estimated and the Chancellor promised the markets that the deficit would be halved in four years. However, he ducked the decisions on where cuts would need to be made and spending for 2010-11 will surge ahead as planned.

Now although deficits look bad it has been relatively cheap to borrow since the start of the recession and we’re probably now entering the beginning of a period where the rate for government to borrow will normalise as the recession comes to an end, therefore becoming more expensive.

So if government going to go forward with spending as planned and borrow more in the near future, it’s probably a good idea to borrow now and lock it in while rates are low.

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Posted by Ashish Prashar at 11:10 am
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