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Ahead of the publishing of ADVFN’s Alternative Budget 2013 we ask Zak Mir, ADVFN Newspaper writerm Senior Analyst at the Institute of Trading and Portfolio Management and author of Lessons from the Financial Markets for 2013, for his thoughts on what Chancellor George Osborne should be announcing next Wednesday.
George, if you’re reading, you may not like what you are about to read:
The Budget 2013: Osborne’s Last Stand
I have been asked to deliver my view on what should be in George Osborne’s Budget – this I will get to in a few moment. But the first and most important thing to say is, for the love of god , George make this your last Budget.
It is apparent that you may be a nice guy, good background, have the home furnishing business quietly losing money, but really have not aptitude whatsoever to be at Number 11 Downing Street. Now, to be fair, this would normally not matter for a public school / Oxbridge type who should be able to flit from one great Department of State to another for a number of years and then retire with a peerage to gain a fistful of directorships in the City.
However, it is unfortunate that we live in exceptional times and therefore the Sixth Former Prefect skills that would normally serve Mr Osborne and yes, Mr Cameron, do not work so well. The problem is that the Coalition is so bereft of suitable people Osborne is forced to stay lest someone of the doddering skills of Vince Cable replaces him. In fact, it should really be the case that our new Canadian Bank of England Governor should have been brought in as the UK’ s first technocrat Chancellor…
Moving onto the Budget, I am also focusing on something, which like the Chancellor resigning, is not going to happen: massive tax cuts. If the Fiscal Cliff taught us / reminded us of something, it is that the main difference between the U.S. and the rest of the world is the attitude towards taxation there. Going over the Fiscal Cliff there in 2013 would have meant going from a 2.2% GDP growth rate to say 0% to -1%. And of course around 0% is what the UK and the EU are boasting at the moment as we apparently enjoy taxing ourselves up to the eyeballs, after bailing out money wasting banks and engaging in unsustainable welfare. So basically, if the U.S. followed the same “socialist” model we have on this side of the Atlantic it would be just another PIIGS nation.
My Budget message is that introduce massive corporate tax, income tax and national insurance cuts. Would that bump up the national debt and destroy Austerity? Yes. But when you are over £1tn in debt another couple of hundred billion makes no difference and I would rather be £1.4tn in debt with 2% GDP growth than £1.2tn and heading into a triple dip recession.
