Was it the banana that did it for David Miliband?

I suppose it is too early to comment on Ed Miliband.

The new leader of the British Labour party, Ed Miliband, says he is not going to squeeze the country's middle class but who is going to believe him? The current coalition government seems to have a few tax-raising initiatives of its own. There is the possibility that HMRC wants to take central control of payrolls so as to deduct
income tax and national insurance and then send the remaining amount to your bank account. Is this Stalinism or Conservatism? I don't know if Tory voters knew this would be in the pipeline when they voted for David Cameron. Apparently, the HMRC wants to cut down PAYE errors with people who get multiple payments from different jobs and various pension payments. I think HMRC would need a few more staff and a bigger computer to cope.
To be fair Allister Heath puts it far better than me:
http://www.cityam.com/news-and-analysis/allister-heath/don%E2%80%99t-reward-hmrc%E2%80%99s-massive-failure

Sincere condolences for David Cameron, UK prime minister.

The blog sends its sincere condolences for British Prime Minister David Cameron on the passing of his father in France yesterday.

Football economics defy the laws of gravity!!

The economics surrounding football clubs here in England & Wales and in Europe are perhaps a contradiction in terms. I think the word "economy" is derived from a Greek word for housekeeping. I don't believe Real Madrid was thinking of its profit & loss account when it shelled out a tonne of cash for Kaka and Ronaldo (let's call it £130m for the two players). I hope Man Utd took straight cash rather than the instalment deal it got for Beckham)
I suppose their market values went down following their lacklustre World Cup
performances. Let's hope the Spanish team wins the European Cup so that it can make some return on its investment.

However, in their way stand the mortal enemy FC Barcelona as well as clubs such as Inter Milan and Manchester United. The draw for the next stage of the European Cup is being held in Monaco tonight. The lure of a Wembley final would be pretty big for the four English clubs in the draw. It would be virtually a home fixture for Man Utd and Chelsea. Hopefully the pitch would be sorted out by then.

Apparently, when Tottenham Hotspurbooked their passage last night, the north London team hit a £20m jackpot. For the first time the capital is putting up three contenders for this competition. I have a shameful admission to make. Although a Cockney Red, I am a bit schizophrenic in supporting Spurs about 49 pct of the time. It was good to see Crouch bagging a hat trick but I suppose a tougher European defence would have countered two of those goals. Although we did not get the robot dance, which celebrated those English goals.

The free milk controversy - back to Thatcher!!

It just proves that there is nothing new under the sun with the proposal (personally squashed
by UK Prime Minister David Cameron) that free milk should be withdrawn from under five year old children at educational establishments. It just shows my age that I can remember this type of controversy dogged the old battle axe Margaret Thatcher herself. I know I should not poke fun at the victor of the Falklands War but her economic policies were pretty responsible for the reduced industrial capability of the UK.

It was sad watching a programme of "Top Gear" when Jeremy Clarkson visited the old empty factory, which manufactured the Jensen sports car in West Bromwich and said that we don't manufacture anything anymore in the UK.

I suppose we don't go in for suporting industrial champions but we did rescue Rolls Royce in the 1970s and that was a pretty good move for both the aero-engine maker and for us as a nation. Currently, it is open season for the world class manufacturers we still have in Great Britain and Northern Ireland. Who would have thought a bidding war would have broken out for Chloride!

Will the UK coalition government unravel?

I was watching a BBC interview with Lib Dem MP Simon Hughes yesterday and I was wondering if the UK coalition government will unravel. He made a good job batting away a question about a possible graduate tax but then was asked about the Iraq war.
Perhaps his reply was not helpful to the coalition government but shows up the differences in the administration. Hughes said all Lib Dem MPs thought the war was illegal.

The UK coalition government has to get on with the situation as it is now. The aim must be to extricate our troops from fighting abroad rather than worrying about the illegality of the Iraq war, which is just too late.

It is amazing that the Labour Party is taking so long in selecting a leader, when the coalition government could do with some external rather than internal opposition.
For instance, Andy Burnham should be leading the attack on the government plans for the NHS, which represent quite a gamble.

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.