BKL tax partner David Whiscombe comments via the UK200Group on reports that Chancellor George Osborne will use his Mansion House speech tonight to signal a return to what has been called “Victorian age” public finances, including permanent surpluses and government borrowing permissible only in “exceptional circumstances”.
“Extremes breed extremes. If you’ve ever been in position where you are swamped by debt, a resolution never to borrow a penny piece ever again is almost rational.
“A more balanced approach to public finance is to recognise that proper management of the economy involves budget surpluses in some circumstances and budget deficits in others: the important thing is keeping them in balance over the long term.
“Given the enormity of deficits in recent years, that must mean aiming for surpluses for the foreseeable future.”