Poison the well

Since Alistair Darling finished his speech and sat down to the cynical applause of the New Labour backbenches, I had been struggling to make sense of today's budget. I have downloaded the budget statement from the Treasury website. But it is hard work digging through the morass of political cliches that have become the hallmark of New Labour budgets.

However, as my two previous posts amply demonstrate, this budget has comprehensively destroyed public finances for a least a generation. New Labour have generated the largest series of fiscal deficits and the most rapid growth in public debt since Hitler was contemplating the relative merits of cyanide and a bullet.

As usual the press have been distracted by a cheap publicity seeking move by New Labor. Journalist have focused on the income tax hike for the wealthy. It is an non-issue. There will be no brain drain and there will be no additional revenues from this headline grabbing measure.

Broadly speaking, there are only three groups of people who have large enough salaries to be potentially affected by this tax change. First, we have the bankers. Since the summer of 2007, banks across the planet have fired battalions of bankers. There is a worldwide surplus. Any UK banker wishing to try their luck abroad has my blessing. Go forth, my son. Try your best, but I suspect the pickings abroad are bare.

The second group are found in the public sector. These are the new Labour managers and consultants who have bled the taxpayer dry. These parasites are not going anywhere either. Although, it would be great if they tried.

The last group is found amongst the professional classes; lawyers and accountants. Again, the vast majority are closely tied to the UK.

Anyone else earning in excess of a hundred grand is probably an entrepreneur and they can hide their earnings in a thousand ways. So, the bottom line is no one is leaving, and very few will be paying anything extra.

The real story behind its budget is next year's election and the one after that. This is a "poison the well" budget. Brown, Darling and the rest of the New Labour crew know that the game is up. The election was lost 18 months ago. New Labour has nothing to lose and everything to gain from a totally irresponsible and reckless budget.

When they are finally kicked out of office, they will leave a fiscal disaster for the Conservatives. It will be Cameron and Osborne who will have to clean up this grotesque mess. It will be the Conservatives who will have to hike taxes, and cut public expenditure. While they are doing it, New Labour can relax on the opposition benches and point the finger at the callous Conservatives. Then, perhaps, five years down the track, New Labour might return to wreck public finances once again.