Budget week

I am not sure what we were expecting, and oddly, what used to be a key event in life has become, (for the moment), irrelevant. I went in to Manchester to have lunch with a friend, who subsequently became a client, and worried not. You just have to look at where the bond and currency markets are going to get the answer. For the moment, they seem patient enough to await the outcome of the forthcoming General Election. This seems generous.

Government cuts……..

For the record, UK plc is spending £500 million more, per day, than it generates.

The incumbents have forecast, or promised, that they will cut this in half over the next four years, but what they actually mean is that we will only have to borrow £250 million pounds a day, if these, unidentified plans, work out.

On Monday, the Telegraph ran a story that 51% of GDP was now accounted for by the Government, which my Chairman tells me is the definition of a Socialist state. Anybody remember voting for this? And, as the fog clears, in post Budget interviews, the Chancellor admits that there will have to be huge cuts. Why not? What is wrong with saying minus 10% right across the board? They have done this in Eire; we have done it much closer to home.

Much will change over the next few weeks, and it is entirely possible that the present Chancellor will join the ranks of the unemployed, so thin is his majority. No matter; consultancy thrives for ex Cabinet ministers. Apparently.

Domestic bills…….

Meanwhile, closer to base, my last ever school fees bill has arrived. All three children have been to the same establishment since they were four, so we pretty much started this process 18 years ago. The fees, then, were £400 per term, and we took out a school fees plan, with Save and Prosper (remember them?), which yielded 14%! Now, the bill is £2910, before extras, a rise of 727%. Would that my income had risen by the same amount over that time. However, the best education you can give your offspring is a great investment; no Government, of any colour, can take that away from them.

Of course, bills never turn up on their own; one of my colleagues thinks it “seasonal”, but I suspect “continual” might be more apt. Queue the Council Tax Bill. This year, it is a bargain, at a mere £2454.78, up 2.5%. So, that is alright. But when we moved here, in 1987, it was £132. Per year. We still have one “streetlight”, but the bins get emptied once a fortnight, rather than once a week. Otherwise, what has changed? Probably, the kind of stuff you don’t see. Something near 20% of the budget for the Cheshire Police Authority is spent on pensions; I don’t begrudge them this, but I have already paid tax on this money…

A difficult phase for the market……

Equity markets grind upwards, against our predictions. I suspect we are entering a difficult phase, over the next few weeks, but some certainty of outcome would be welcome after the last two years.