Borrowing is a tax on the future


Simon Heffer is usually a little bit too angry at the modern world for my tastes, but every once in a while his anger is justified. Last week the government was finally forced to do the sensible thing: make up for its abolition of the 10p tax rate by raising the personal allowance. Which is great, apart from the fact that even this minor tax cut will be financed by yet more borrowing (and will apparently only last for one year). In his column in Saturday's Telegraph, Heffer hit the nail on the head:

The £2.7 billion loan, at a time when we are grotesquely over-borrowed, is the final sign not merely that this man has no idea about sound economics, but that he [Gordon Brown] is unfit to see the country through hard times. Total public spending is around £617 billion a year. It would not even have constituted what accountants call a rounding error to make a saving of £2.7 billion in a total of that magnitude, yet Mr Brown could not bring himself to sack a few thousand from his overmanned client state, or trim spending elsewhere, like the private sector is being forced to do thanks to his mistakes.

Exactly. Any sensible organistion would seek to reduce costs and make efficiency savings in the midst of a downturn, but that never seems to occur to governments. A new report from the Taxpayers' Alliance has found that there are now 1,162 QUANGOs in the UK, running at an annual cost to the taxpayer of £64 billion. Couldn't Brown start by doing a little pruning there?