OT : Cheery news

Discussion in 'Computer Support' started by Centre Parting, Apr 26, 2009.

  1. http://news.bbc.co.uk/1/hi/business/8015063.stm

    ----------

    UK economy 'faces decade of pain'
    By Steve Schifferes
    Economics reporter, BBC News



    The Tories have accused the chancellor of hiding a "tax bombshell".
    The UK is facing "two parliaments of pain" following the "breathtaking"
    damage to the economy, the Institute for Fiscal Studies (IFS) has warned.

    The government must close a £90bn hole to bring the budget into balance, the
    independent think-tank said.

    That would cost every UK family £2,840 per year by 2017-18 in higher taxes
    or public spending cuts, it added.

    The Treasury said this week's Budget had set out a plan to reduce borrowing
    while supporting the economy now.

    'Benefit'

    The IFS analysis came after the chancellor delivered his Budget which
    forecast the biggest deficit in UK post-war history.

    Alistair Darling told the House of Commons on Wednesday the government would
    be forced to borrow £175bn this year as the recession battered the UK
    economy.

    Shadow chancellor George Osborne said the IFS calculations showed the
    country was facing a "secret tax bombshell".

    But Downing Street insisted it was "not entirely clear" how the £2,840
    figure had been calculated.

    The Treasury said that reducing our borrowing overnight would lead to
    greater losses in the long term.


    The Treasury's assessment of the fiscal damage wrought by the current
    economic and financial crisis is breathtaking

    Robert Chote, IFS
    Stephanie Flanders: Rose-tinted realism


    "By investing in the economy and protecting our front-line services through
    greater efficiency, we will be much better positioned to benefit from the
    recovery when it comes."

    'Mounting austerity'

    The squeeze on spending would duplicate that seen during the Thatcher years
    in the mid-1980s, the IFS said.

    The independent think-tank forecast overall public spending would fall by
    0.1% annually in real terms from 2011 to 2014.

    It said if the budget squeeze continued to fall on spending up to 2017-18,
    total public spending would fall back to the level of 2002.

    This would wipe out all the spending increases made by the Labour party in
    its last two terms in office.





    "The Treasury's assessment of the fiscal damage wrought by the current
    economic and financial crisis is breathtaking," said IFS director Robert
    Chote.

    "It will require two full parliaments of mounting austerity to repair."

    The IFS said the taxes on the rich will raise relatively little money in
    comparison with the size of the budget gap.

    Only 10% of the gap will be raised by new taxes, while 40% will be accounted
    for by spending cuts up to 2014, it added. The remainder (50%) is scheduled
    for the parliament after next.





    The IFS pointed out the government is planning a huge cut in public
    investment, reducing it by more than half, and reversing its previous
    approach that aimed at preserving capital investment.

    This would mean much less money available was to build new schools, roads,
    and hospitals after 2011.

    In addition, it pointed out that all of the very modest increase planned in
    current spending (on wages and running costs) would be taken up with the
    higher cost of debt interest and paying out more social security benefits.


    Health and education could face spending curbs
    This meant departmental spending (including areas such as health, education,
    and policing) would need to fall by 2.3% annually.

    If these departments, which make up more than half of all departmental
    spending, were protected, then there would be even bigger cuts in other
    departments, of up to 5%.

    It was not clear that these can be achieved by "efficiency savings" alone,
    the IFS said.

    And it added that in the following four years, to 2017-8, public spending
    would also have to grow at just 0.5% annually to meet the budget cut targets
    without further tax increase.

    Output gap


    Its not just the recession that is troubling the chancellor
    The need for big cuts in spending or the raising of taxes does not only
    arise from the depth and the severity of the recession.

    The IFS said that it was also due to a permanent loss of output by the UK
    economy as a result of the credit crunch, and added the Treasury had doubled
    its estimate for the size of that loss.

    The loss of output, and thus of tax revenues, for example from financial
    sector, had put a permanent hole in the public finances, its report said,
    meaning the government could not simply rely on the end of the recession to
    plug the structural gap in the public finances.

    And it said that it would be 2032 before government debt returned to the
    level of 40% of GDP that had been Mr Brown's target.

    Hitting the rich

    The IFS also cast doubt on the Treasury's belief that it would raise an
    extra £7bn per year by taxing the rich, especially those earning over
    £150,000 per year.

    TAXING THE RICH
    50% tax rate: £2.6bn
    lower pension tax relief: £3.1bn
    Personal allowances: £1.6bn
    Source: Treasury estimates
    It said there was tremendous uncertainty about how much the new 50% tax rate
    would generate, adding that it could raise no money at all if the rich
    changed their behaviour.

    And it warned if some rich people chose to leave the country and spend less
    in the UK, that would also lower tax receipts in other areas, such as VAT
    receipts, perhaps by as much as £1.5bn.

    It was also sceptical about the plan to reduce tax relief on pension
    contributions, which the Treasury said would raise £3.1bn. This scheme is
    flawed in its principles, it said, and will be difficult to implement in
    practice.
     
    Centre Parting, Apr 26, 2009
    #1
    1. Advertising

  2. Centre Parting

    Guest Guest

    Re: Cheery news

    "Centre Parting" <> wrote in message
    news:...
    > http://news.bbc.co.uk/1/hi/business/8015063.stm
    >
    > ----------
    >
    > UK economy 'faces decade of pain'
    > By Steve Schifferes
    > Economics reporter, BBC News
    >
    >
    >
    > The Tories have accused the chancellor of hiding a "tax bombshell".
    > The UK is facing "two parliaments of pain" following the "breathtaking"
    > damage to the economy, the Institute for Fiscal Studies (IFS) has warned.
    >
    > The government must close a £90bn hole to bring the budget into balance,
    > the independent think-tank said.
    >
    > That would cost every UK family £2,840 per year by 2017-18 in higher taxes
    > or public spending cuts, it added.
    >
    > The Treasury said this week's Budget had set out a plan to reduce
    > borrowing while supporting the economy now.
    >
    > 'Benefit'
    >
    > The IFS analysis came after the chancellor delivered his Budget which
    > forecast the biggest deficit in UK post-war history.
    >
    > Alistair Darling told the House of Commons on Wednesday the government
    > would be forced to borrow £175bn this year as the recession battered the
    > UK economy.
    >
    > Shadow chancellor George Osborne said the IFS calculations showed the
    > country was facing a "secret tax bombshell".
    >
    > But Downing Street insisted it was "not entirely clear" how the £2,840
    > figure had been calculated.
    >
    > The Treasury said that reducing our borrowing overnight would lead to
    > greater losses in the long term.
    >
    >
    > The Treasury's assessment of the fiscal damage wrought by the current
    > economic and financial crisis is breathtaking
    >
    > Robert Chote, IFS
    > Stephanie Flanders: Rose-tinted realism
    >
    >
    > "By investing in the economy and protecting our front-line services
    > through greater efficiency, we will be much better positioned to benefit
    > from the recovery when it comes."
    >
    > 'Mounting austerity'
    >
    > The squeeze on spending would duplicate that seen during the Thatcher
    > years in the mid-1980s, the IFS said.
    >
    > The independent think-tank forecast overall public spending would fall by
    > 0.1% annually in real terms from 2011 to 2014.
    >
    > It said if the budget squeeze continued to fall on spending up to 2017-18,
    > total public spending would fall back to the level of 2002.
    >
    > This would wipe out all the spending increases made by the Labour party in
    > its last two terms in office.
    >
    >
    >
    >
    >
    > "The Treasury's assessment of the fiscal damage wrought by the current
    > economic and financial crisis is breathtaking," said IFS director Robert
    > Chote.
    >
    > "It will require two full parliaments of mounting austerity to repair."
    >
    > The IFS said the taxes on the rich will raise relatively little money in
    > comparison with the size of the budget gap.
    >
    > Only 10% of the gap will be raised by new taxes, while 40% will be
    > accounted for by spending cuts up to 2014, it added. The remainder (50%)
    > is scheduled for the parliament after next.
    >
    >
    >
    >
    >
    > The IFS pointed out the government is planning a huge cut in public
    > investment, reducing it by more than half, and reversing its previous
    > approach that aimed at preserving capital investment.
    >
    > This would mean much less money available was to build new schools, roads,
    > and hospitals after 2011.
    >
    > In addition, it pointed out that all of the very modest increase planned
    > in current spending (on wages and running costs) would be taken up with
    > the higher cost of debt interest and paying out more social security
    > benefits.
    >
    >
    > Health and education could face spending curbs
    > This meant departmental spending (including areas such as health,
    > education, and policing) would need to fall by 2.3% annually.
    >
    > If these departments, which make up more than half of all departmental
    > spending, were protected, then there would be even bigger cuts in other
    > departments, of up to 5%.
    >
    > It was not clear that these can be achieved by "efficiency savings" alone,
    > the IFS said.
    >
    > And it added that in the following four years, to 2017-8, public spending
    > would also have to grow at just 0.5% annually to meet the budget cut
    > targets without further tax increase.
    >
    > Output gap
    >
    >
    > Its not just the recession that is troubling the chancellor
    > The need for big cuts in spending or the raising of taxes does not only
    > arise from the depth and the severity of the recession.
    >
    > The IFS said that it was also due to a permanent loss of output by the UK
    > economy as a result of the credit crunch, and added the Treasury had
    > doubled its estimate for the size of that loss.
    >
    > The loss of output, and thus of tax revenues, for example from financial
    > sector, had put a permanent hole in the public finances, its report said,
    > meaning the government could not simply rely on the end of the recession
    > to plug the structural gap in the public finances.
    >
    > And it said that it would be 2032 before government debt returned to the
    > level of 40% of GDP that had been Mr Brown's target.
    >
    > Hitting the rich
    >
    > The IFS also cast doubt on the Treasury's belief that it would raise an
    > extra £7bn per year by taxing the rich, especially those earning over
    > £150,000 per year.
    >
    > TAXING THE RICH
    > 50% tax rate: £2.6bn
    > lower pension tax relief: £3.1bn
    > Personal allowances: £1.6bn
    > Source: Treasury estimates
    > It said there was tremendous uncertainty about how much the new 50% tax
    > rate would generate, adding that it could raise no money at all if the
    > rich changed their behaviour.
    >
    > And it warned if some rich people chose to leave the country and spend
    > less in the UK, that would also lower tax receipts in other areas, such as
    > VAT receipts, perhaps by as much as £1.5bn.
    >
    > It was also sceptical about the plan to reduce tax relief on pension
    > contributions, which the Treasury said would raise £3.1bn. This scheme is
    > flawed in its principles, it said, and will be difficult to implement in
    > practice.
    >
    >
    >


    Not sure how you see this would be helpful on a 24hour helpdesk?
     
    Guest, Apr 26, 2009
    #2
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  3. Centre Parting

    olfart Guest

    Re: Cheery news


    >>
    >>
    >>< big snip>

    >
    > Not sure how you see this would be helpful on a 24hour helpdesk?

    did you have to repost the whole damn thing for just a one line comment?
    Damn Brits would screw up a wet dream
     
    olfart, Apr 26, 2009
    #3
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