And thankfully the damage is minimal due to the Governments determination to tackle the ever increasing amount of debt. The important thing is what interest rate the government is having to pay back on its debt, around 2% currently, which is a record low.
Labour want to borrow more, to borrow less. If Labour had won the last election, and had continued with their spending plans, the country with have gone bust, and we would be in a worse situation than Spain, and we would have to join the Euro to get any bailout money from the EU.
I think the image below shows the challenge facing the government, and the thought of an extra interest they are going to have to pay servicing that debt is not great. The important thing, is that because the banks, which lend to the government, have faith the country is dealing with its debt problem, they continue to lend at a record low interest rates, and as long as this is the case, less cuts to public services are required.
Its a scary sight that, and clearly shows the Labours last year in power, they were just trying to buy votes by spending money they did not have.
When I see the Labour party on TV, they don't have any plans on how to tackle the deficit, how to keep the countries credit rating low, and avoid wasting money on higher interest rates.
Economic Policy is a challenge, and funding public service is a challenge, but I think its time to get rid of the deficit, reduce our debt burden, so during the next financial crisis, we have something in reserve that we can use.
I don't think the Labour party can manage the economy, I think the Conservative party can make the tough choices, and I see David Cameron as someone who can sell Britian better to the rest of the world than Ed Miliband.
The previous Labour government scrapped the 10p tax rate, this government will have increased the limit before you start paying tax to £10,000 by the end of the government. I think we have the Lib Dems to thank for this, and its a shame people tend to overlook this.
The previous Labour government sold Gold when it was at a record low, and got one of the biggest windfalls from the sale of the 3G network. The 4G sales were modest compared to the 3G.
The 50p tax rate failed to bring in the increased revenue it was expected. Labour estimated it would generate £3 billion, and it was less than£1 billion, but those figures do not take in to account business been relocated, and it has been speculated that when looking at the wider picture, it could of lost revenue due to business moving offices to lower tax locations. This government has made Britain Open for Business.
HRMC said:
The conclusion that can be drawn from the Self Assessment data is therefore that the underlying yield from the additional rate is much lower than originally forecast (yielding around £1 billion or less), and that it is quite possible that it could be negative.
Source
http://www.hmrc.gov.uk/budget2012/excheq-income-tax-2042.pdf
Unemployment was higher when Labour left power, then when they took over, and strangely, this has always been the case when Labour come and leave power. Unemployment is down for this government, and employment is at a record high.
When you borrow money on a credit card, or get a loan out, you have a few months of the good time, while you spend all that money, once that money is gone, you then have 3-4 tough years of paying that debt back, where you can not do everything that you want, as you have to pay the debt off. The conservative party is trying to pay it off, from what I understand, the Labour party wants to borrow more, to have another 3-4 months of good times, but 6-7 years of tough times paying it off.
Sorry for this turning in to a bit of a political propaganda but I have spent fare to long writing this to try and make it balanced. The problem with politics is that doing something unpopular, will mean you do not win the next election. Reducing the deficit, and reducing debt is never going to be popular, and never going to be a vote winner, but if we do not do it, everyone is going to lose out later on, whether it be higher taxes or reduced spending on public sector.
For what its worth, I think a Lib Dem/ Conservative coalition in the next election would be a good thing, as you get the best of two parties, and I will probably vote Lib Dem, as they seem to have more policies that I currently agree with.
Ian