UK Conservatives unveil budget

The problem:
– $1.3 trillion debt.
– Budget deficit is 11% of GDP

The planned solution:
– Increase VAT from 17.5% to 20% by January
– Axe treasury department looking into adopting the Euro as the common currency
– Public sector pay freeze
– Child tax benefit freeze for 3 years
– SMB tax rate from 21 to 20%
– plan to reduce corporate tax rate to 24%
– bank levy to be introduced by January
– 28% on capital gains

The UK is facing hard times. Its budget deficit to GDP is second only to Ireland in Europe. Its domestic demand was -1% during 2009 while that of Canada was +2.6%. The Harper government also plans to cut the corporate tax rate to 15% by 2012 while Michael Ignatieff has said that he would freeze corporate taxes at 18%. In October 2009, the IMF had predicted the UK’s net debt to increase to over 90% of GDP while Canada’s net debt position stands under 30% of GDP (and debt-to-GDP ratio about 35%). Canada’s absolute debt stands at $529 Billion and this country’s deficit stands at $56 Billion.

Here is the UK budget released today:

Running away from the brand

In Canada, the Conservatives unapologetically spend, while in the UK, they are about to cut — but not without apology.

An email I just received from the UK Conservatives addressed to party faithful:

The legacy of Britain’s debt is Labour’s to be sure, but in an email to those that elected you, claim credit for taking action. These cuts are your cuts and you should proud to implement the plan to address the crisis.

And gosh, no money to address climate change?