Wednesday, 9 December 2009

PBR: Labour borrowing enough for 3,125 Jumbo Jets

Well, Darling has delivered the PBR and to quote a great thinker of our times: "We're Boned".

Let's have a look at his headline, one-off tax on bankers' bonuses. This is estimated to raise £500m. That is estimated by Darling of course, the man who suggested in April that the economy would shrink 3.5%. Today he's decided that in fact he was wrong and the economy has shrunk by 4.75%, over a third more. In 2008 he said that borrowing in 2009 would rise to a massive £43Bn, so looks like he missed that estimate as well (In case you've been dead for the last year, we're now borrowing £178Bn this year, over four times as much as estimated).

Anyway, let's assume that he's right this time. £500m is some pretty serious money. Even Lewis Page would have to admit that it buys at least one Typhoon.

However, to be honest, it's small change. This year we're borrowing £178Bn, next year £176Bn and then £140Bn the year after. I wish I was joking. That's basically £500Bn in borrowings over three years.

Darling would have to run this new tax for 1,000 years to match 3 years of borrowing.

The Tax is ultimately pointless, as "discovering" "efficiency" savings of £3Bn. I'm increasingly starting to believe that Labour are engaging in a Scorched Earth strategy, deliberately destroying the economy just to spite the Tories.

Anyway, just for entertainment, let's take out £500Bn and see what we could be doing with the money, rather than our current attempts at propping up banks and throwing ever larger amounts of benefits.

The Apollo programme, which put 10 men on the Moon and was about the most gloriously expensive thing Mankind has attempted cost about $25Bn in 1969. That was a long time ago. The spectre of inflation has kicked in. We're now looking at that being worth $150Bn in 2009 money. That's less than £100Bn. We could buy five Apollo programmes for three years deficit!

The country could buy every share traded of the following companies:
British American Tobacco, Rio Tinto Group, BHP Billiton, BG Group, Tesco, Xstrata, Anglo American, Diageo, SABMiller, Unilever, Reckitt Benckiser, Imperial Tobacco Group, National Grid, Centrica, BAE Systems, Cadbury Plc, Scottish and Southern Energy, ENRC, BT Group, British Sky Broadcasting, Tullow Oil, Rolls-Royce Plc, Morrisons, Antofagasta, Compass Group, Associated British Foods, WPP Group, Pearson. I've avoided anything Financial, as we own enough of those anyway. At 3rd October prices, we could have all of those and still have about £10Bn left over. We could buy these 30 massive companies and also buy a crate of Champagne for every tax payer to celebrate!

We could buy 3,125 747 Jumbo Jets. Assuming they're fitted out in an all-economy configuration that's pushing 3,000,000 seats. We could buy enough planes to enable the whole country to emigrate in 20 trips!

If we could convert that to pennies, we'd have 178,000,000 Tonnes of the little bastards! Let's see the banks try bagging those up! If we melted them down, we've have a steel and copper cube over 5,000m along each axis.

We are not in "A position of strength". Labour are borrowing suicidal amounts of money. At least with the options presented above we'd have something to show for our investment, be that 50 people on the Moon (each group of 10 would start a new project up, using no data and knowledge from the previous one), the world's largest fleet of aircraft or a fun new modern art installation. After three years, Labour will have nothing to show for their staggering economic incompetence.

1 comment:

  1. Anyway, let's assume that he's right this time. £500m is some pretty serious money. Even Lewis Page would have to admit that it buys at least one Typhoon.

    Hehehehe :D

    But, yes, the figures involved are truly staggering.

    Half a trillion pounds would buy a 10m x 10m x 10m cube of pure 24ct gold, weighing around 24000 tonnes. It would give every single public sector worker £55k in cash as a redundancy payment. Over three years, it represents about 35 extra percentage points of tax/NI on the workforce - 55% (66%) basic rate, 75% (76%) higher rate... and don't forget the 9% student tax on top of that!