Well that'll teach me for trying to be clever.

Today the Chancellor of the UK Exchequer announced his pre-budget report in which he explained how his government intends to deal with the current recession. I'd prepared a long and comprehensive post complete with diagrams to explain what he done and why he's done with the idea that I would post up my analysis pretty much as soon as he'd finished his speech. Unfortunately I'd forgotten to install the correct image manipulation software on to my new PC and I can't really be bothered to do that tonight.

In the mean time though I will say that he has done pretty much exactly what everyone expected him to do. Use a lot of money the UK doesn't have to provide a stimulus package in the hope of providing the economy with enough of a bump in 2010 so the Labour party have a chance of winning the general election. He's done this in two main ways;

1. Cutting VAT by 2.5%. The hope is that this will boost high street sales enough to protect retail sector jobs and allow voters to buy enough consumer crap to bring back the feelgood factor by 2010.


2. £3bn in public spending to protect jobs in the construction and engineering industries.

In order to ally fears that government borrowing has gone horrifically out of control he's also announced that there will be a increase in National Insurance and a new 45% income tax band for people earning over £150,000. Both of these taxes have been deferred until 2011, after the next general election, which plays the Conservatives opposition into quite a difficult political position because at the next election because with money already spent they can either campaign on the platform of cutting taxes and bankrupting the nation or they can try and find a political advantage by agreeing exactly with Labour's economic policies.

So in summary politically it's been a very clever budget from the government but economically it's incredibly optimistic to say the least.