My Budget Response

There is one truism in Financial Politics: 

You cannot tax your way to prosperity.

It seems Rachel Reeves has forgotten that, or maybe she's never heard it, or maybe she's just ignoring it.

Not only have the OBR refused to back up the claim of the £20Bn black hole, what we got in the budget was more tax and spend. Piggy banks were raided in order for the Government to fund pet projects.

An Office for Value for Money is being created, more civil service jobs. Another Chairperson on a fat six figure salary no doubt, a few board members on lesser salaries and a team under that.

So much for saving money.

All I can see from this budget is the chancellor has minimised the affect on your pay packet and avoided raising fuel duty (which I'm sure would have caused a riot), but has done some creative raiding of savings to then redistribute to various funds and pet projects.

Unfortunately the chancellor has ignored the truism at the start of this blog. Taking money from interest on savings, or wherever and then using that money elsewhere will not grow the economy. And we need to be growing the economy, because without that pressure, it will continue to shrink. We need investment from outside the government to come in and increase cash flow. 

Right now we are at rock bottom in manufacturing capacity. Sure, we have a few specialist industries that can sell goods outside the UK, but they are not enough. The city of London is an unreliable source of revenue. Dividends can go down as well as up.

We need something inside the UK that people outside the UK will invest in and/or buy for themselves. Spinning the same money round the economy by creating an ever-increasing number of retail outlets cannot grow the economy.

The Small Nuclear Reactors in development at Rolls-Royce are the sort of thing that we need to nurture. We need to be adopting those reactors within the UK in order to develop the technology.

We need to be looking at alternative nuclear energy solutions. Thorium Reactors could be a viable solution using fission. The dream of fusion is just that: a dream, always 10 years away, as it has been for the last 4 decades.

Yet I don't see investment in anything as substantive as this in the budget. It's all pie-in-the sky stuff, nothing tangible. Of course the tax take isn't tangible. That's very real.