Dark clouds over the budget

It is less than a week to the budget and the Indy's Hamish McRae introduces us to the grim realities of the future shape of budgets.

it will contain elements that next year the new government will have to incorporate into its own policies. We are going to get a glimpse of the future.

he writes

The harsh realities of the public sector finances will be laid bare.We will get realistc economic forecasts and most importantly when it comes to tax revenues

if you look at what has been happening for the past five or six years, revenue tended to come in below the level that the Treasury expected. Now it is collapsing. The reason for the collapse is that the boom had concealed the fact our tax system had become structurally much weaker than it was a decade or so ago. It has been over-dependent on types of revenue that could not be relied on. At a company level these included the corporation tax paid by banks and oil companies, and North Sea oil revenue itself. At a personal level these included tax on capital gains, on stamp duty on housing, and income tax on bonuses.
The consequence of this can only be a claw back in public spending.

It is surely time to batton down the hatches

The dilema for an incoming Tory government

To comprehend the scale of the sickening task awaiting George Osborne if he becomes chancellor, consider the following. If he were to raise VAT to 25 per cent, double corporation tax, close the Foreign Office, cancel all international aid, disband the army and the police, release all prisoners, close every school and abolish unemployment benefit he would still be unable to close the gulf between what the UK government spends and what it raises in taxes.

Writes Fraser Nelson in the Spectator this week