Figures that caught my eye
Amid the welter of statistics that Budgets always spew out, one seemed to me to encapsulate our current economic predicament: this year and next HMG will borrow more than it will take in income tax revenues. That's right, we will have borrow more than the income tax take (and income tax is the government's single biggest source of revenue).
Even after the , HMG still plans to borrow £167bn in the financial year about to end and £163bn in the one about to begin (2010/11).
As a share of GDP both figures are at around 12%. But income tax receipts for 2010/11, though up a bit on this year, are projected to be only £146bn. So for two years in a row government income will depend considerably more on the bond markets (where HMG does its borrowing) than on income tax, hitherto the main staple of government revenue.
Here's another figure that caught my eye: amid all the confusing talk about what departmental budgets are going to be cut and when, it is clear that, whatever cuts are made, public investment (as opposed to current spending) is to be the main victim.
In the , public investment (in things like roads, hospitals, schools, bridges, infrastructure) is to be cut from 5% of GDP in 2009/10 to only 2.6% by 2014/15. There is talk in Whitehall of departmental current spending having to be cut by up to 20% in the years ahead, though nobody is quite sure.
But the Budget Red book has already told us that investment in public services is about to be cut by 50%, though curiously nobody yesterday sought to highlight that ....
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