Comments: Borrowing balloons as Labour goes fishing for votes

The changes to CGT are a big mistake and, in my view, will probably be reversed via some kind of "clarification" before the budget. They simply didn't have time to think them through, so they went for what they believed to be an easy option that kept everyone happy. Unfortunately it's backfired drastically! There's some excellent analysis of the tax proposals here:

http://www.taxresearch.org.uk/Blog/2007/10/09/domicile-private-equity-and-capital-gains-tax/

Posted by Minh at October 14, 2007 10:08 AM

Why are the trillions of PFI off balance sheet debts just ignored by economists? Isn't this just Enron style accounting at it's finest?

Posted by richard at October 27, 2007 05:23 PM

You really don't have a clue what's happening if you think there have been trillions of pounds PFI contracts. As I've written on plenty of occasions, putting PFI deals on the balance sheet would take government debt from a little below 40% of GDP to a little above it.

Posted by David Smith at October 27, 2007 06:02 PM

I thought the off balance sheet PFI fiddle was approx 1.5 trillion pounds? What do you believe it is?

Posted by richard at October 28, 2007 05:37 PM

Not even remotely close. The combined capital value of all PFI deals signed since 1992 is 55 billion (NAO figures).

Posted by David Smith at October 28, 2007 06:13 PM

Not the capital value, but the amount the taxpayer will be paying to the companies over the lifetimes of the contracts.

Posted by richard at October 29, 2007 08:50 AM

The net present value is the appropriate way to score PFI contracts - 1 billion now is worth more than 1 billion in 25 years time - but even if you take account of all the payments over the lifetime of the projects, the number is only just over 100 billion.

Posted by David Smith at October 29, 2007 09:59 AM
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