Tomorrow will see the UK's emergency budget.

Former Tory chancellor Norman Lamont says in today's Daily Telegraph that George Osborne has to be bold in tomorrow's budget so as to make a dent in the public sector deficit. We are certainly being softened up with stories of elimination of tax credits to relatively wealthy families and of civil servants having to contribute more to their generous pensions. However, if we are going to have a welfare system then there should be some universal benefits. Moving the goal posts on public sector pensions will be harder for the government to explain compared with the decimation of private schemes. This was due to the closure of defined benefit pension funds, which was not widely understood by workforces. Factors obviously include the Gordon Brown tax raid but there have been other problems such as the poor performance of equities and the increasing longevity of scheme members. Companies such as British Telecom and British Airways have become pension funds with operational subsidiaries attached.

Politically it will be a tough sell for a group of millionaires to advocate austerity. The Tories can blame Gordon Brown for economic mismanagement but I would not impose policies, which would deliberately increase UK unemployment from 2.25m to 3m. It is alright being critical of the fact that 60 pct of the workforce of the north-east depend on the public sector but it is unlikely the private sector could step in to improve matters.

Some of our problems are European-wide. The wheels are falling off in countries such as Spain and Portugal due to deficit problems, poor educational systems and weak employment formation. Much has been made of the collapse in Spanish property prices but our banks have also become property companies due to the weight of questionable loans to the sector. State pension ages have to be harmonised throughout Europe. However, there is little point us making transfers to the French economy via the Common Agricultural Policy (CAP), if the Frogs can retire at 60 while we have to soldier on until 66 plus.

On a more optimistic note the devaluation of the pound has given us some breathing space. Hopefully, families will be using the low interest rates to cut borrowings. Gilt yields are low so the financial markets are being sanguine about our prospects at the moment.

It is a shame I can't get on a Quango!!

It is a shame I can't get on a Quango especially with the Tory-Lib government committed to cutting down waste. Apparently, there are quangoes to monitor the work of other quangoes!! Maybe that is not true but in the British National Health Service (NHS) the sheer number of these quasi-non-governmental organisations were unable to prevent major negative outcomes at a Staffordshire hospital. I suppose I am not a member of the great and the good or of the politically correct. There was that couple in Scotland, which made an absolute mint by sitting on loads of public sector boards.

Changing the subject you do wonder about our government bosses. Defence Secretary Dr Liam Fox has berated our NATO allies for not pulling their weight in Afghanistan. I think it would make more sense for Fox to start howling when there is a full moon than to expect the Germans and Italians to put any combat troops near trouble zones. If the Canadians can set a timetable for pulling out then we should do the same. There is plenty of anti-British rhetoric coming out of Barack Obama, a bit more would not make any difference. The way he spits out "British Petroleum" maybe we should set up a peace and reconcilliation commission and investigate did we really torture his Grandad in Kenya. Perhaps the Brits should kick up more of a fuss about extraordinary rendition, water-boarding etc.

I miss Gordon Brown!!

I miss the former UK premier Gordon Brown, who is keeping a low profile.
There does not seem to be the same chaos in the internal workings of the government of Great Britain. His successor David Cameron has the herculean task of making a dent in the British public debt mountain. I would have gone for a gradual approach to cutting expenditure given that the UK economy has had the equivalent of a heart attack. Cameron has extolled the "Canadian approach" when there were major education and health cuts. These would be very, very unpopular here and if these areas are ringfenced, then the cuts will be worse for the other departments. I would merge the Foreign Office and International Aid departments, which could produce some cost savings.

Selling austerity will not be an easy task for the Old Etonian club. I thought Brown did well in the last election to play the class card, which ensured that the Labour vote did not completely collapse.

It will be interesting if George Osborne will come up with any surprises in the June 22nd budget. One Daily Telegraph columnist says the Chancellor of Exchequer would not know an economic theory, if it hit him on the head.