Now let's get out the scissors

It's been a busy week in politics. It's also been a busy week for me which means I've not been able to fully absorb the Comprehensive Spending Review.

From my initial impressions, though, it looks to me as if it hits all the right buttons. Not just me though, the markets also seem to have taken that viewpoint too, with the interest rate on Government debt falling to below that of Germany.

A good sign indeed. I'm not moved by all the complaints about fairness. The richest ten percent are hit the hardest in their taxes, and the poorest ten percent are hit hardest by the cuts. Because Government spending in Welfare is designed to help the poorest most, any cuts will hurt the most too. That has to be put in the context of big increases over the last 13 years, and so a little retrenchment is to be expected.

A lot of the welfare changes are 'nudges', designed to change people's behaviour rather than just punish. Such as limiting the amount of housing benefit to anyone below the age 35, to a room in a shared house. This is what people in the private sector have to do to get on, so why should others be protected?

Overall it's look good. That's not to say that times are not going to be difficult. It is a gamble, but I think a gamble that will work and will shoot the collective foxes of all those talking about a double dip recession. I expect growth to start picking up next year, and within five years we'll see a flexibly growing economy averaging at 3% GDP growth 3% per annum.

I could be wrong though!

Squiffy