Been to a presentation of the National Assembly's future agri-environment policy tonight. It required serious concentration. But it didn't work. The shock has been too great. I'm still stunned by what Alistair Darling told us this afternoon. It seems to me to be incredible. Next year's Government borrowing is predicted to be £118,000,000,000. Not only is this way more than ever before, but its based on the recession ending in just over six months time - and West Brom are going to win the Premiership. The Chancellor also told us that this borrowing will continue until (wait for it) .....2015/16. Shadow Chancellor, George Osborne, stood up in front of the open goal, and smashed the ball into the back of the net with aplomb, past the hapless Darling.
Most irritating feature of the Chancellor's speech was his constant and rather pathetic attempts to put all the blame for the UK's problems on the dodgy sub prime loans in America. My feeling (entirely unscientific of course) is that this ruse has run its course. People know that Northern Rock was a British Bank. And anyway, its always a tactic of the coward to dump the blame for failure on your best mate. Made him look like what a friend of mine used to call a 'big girl's blouse'.
The VAT cut will have minimal impact. The only reason this cut was chosen was that its easy to reverse. The sensible and most effective cut would have been to raise income tax allowances, but that couldn't have been reversed so easily. The reason I thought Gordon Brown wouldn't have gone for the VAT cut is that it doesn't help the poorest people, where most essential expenditure is zero rated. Big mistake, and in my opinion will not deliver much financial stimulus.
Perhaps the slimiest trick that the Government tried to pull, was to leak the creation of a higher Income Tax band of 45%. The reasoning was that they wanted us all to concentrate on this, hoping that we wouldn't notice the increase in NICs, effectively a rise in basic rate Income Tax. I do think that this did work for today. There must be some reason for the increase in shares price. I wonder if they'll fall tomorrow, as dealers read the small print.
And then we have the political dimension of all this. I ask myself whether Gordon Brown will call a General Election in 2009. This has been my prediction since I became a Parliamentary candidate 18 months ago. And I still think he will - unless he genuinely believes that we will come out of recession next July. Listened to a lot of discussion today, and conclude that its been a very bad day for the Prime Minister.
UPDATE - Guido explains. There was a general surge in shares across the world after the US Government bailed out Citygroup. The German and French stoch markets rose even more than the UK's. So the surge cannot be taken as approval of yesterday's PBR.