And now for the good news – Treasury set to widen the goalposts
I am not really sure why I was surprised to hear Nick Robinson on the BBC news last night confirming an FT story due to run today about the Treasury changing the borrowing rule set by Gordon Brown when he was Chancellor.
It seemed clear that Government debt was set to bust through 40% of national income, and it is clearer today when looking at the Public Sector Finance figures released today. Public sector net debt as percentage of GDP rose sharply to 38.3%, and is well over the rules limit if you take account of the nationalisation of Northern Rock.
With unemployment payments rising, tax take from stamp duty and company profits likely to ease the Government faced and still faces a nasty squeeze.
This left the Government faced with a dilemma. Change the rules and face ridicule or try to stick within them and raise taxes and/or reduce spending and face the wrath of the electorate.
The cut spending option would most likely have proven seriously bad news for construction.