This budget has turned two words into the most terrifying in the English language: National Debt.

The growth of this debt imperils the very future of UK plc. By borrowing hundreds of billions over the next four years Britain will be taken to the brink of insolvency. The pound may collapse. Taxes will soar. And Britons will be paying off the loans for two decades.

The figures are terrifying. This year Brown thought he would borrow £20bn. He and Darling now put that figure at £78bn. He forecasts borrowing £118bn next year, £105bn in 2010-11, £87bn in 2011-12 and £54bn in 2012-13. As we know, Brown always under-estimates borrowing.

The think-tank Reform has compiled Labour’s borrowing forecasts and compared them to reality. The conclusion is that borrowing is usually triple what the Treasury forecasts.

In 2003 the projection of 3bn turned into borrowing of £23bn, in 2004 £4bn became £35.4bn, in 2005 £13bn became £37.8bn. You’d have thought Brown would have learned his lesson. But no. In 2006 he forecast borrowing of £13bn. The actual figure was £31bn..

So how bad could borrowing really get?

Capital Economics says Brown will need £520bn over the next four years. That is half a trillion quid! Total debt will rise to more than a trillion (it is already over £600bn, excluding £110bn of PFI debt, £250bn of bank bailout debt and £1,400bn of unfunded public pensions.)

On official estimates interest payments will soon be higher than state pensions, double what we spend on defence and triple what we spend on higher education.

With unemployment forecast to hit 3m by 2010 this will be a time of severe hardship. Any one with money will be hit by the taxman.

Entrepreneurs: if you thought the 45 per cent income tax band and the half per cent hike on National Insurance was bad, be prepared… the tax rises which lie in store to fund this debt mountain will make emigration a very attractive proposition.

WPP, Regus, United Business Media and Shire Pharma have already gone. The “Taxodus” is only just beginning.

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By Charles Orton-Jones  on   Nov 24,2008

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Keywords

tax    Brown    Darling    small business    Labour    growth   

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