The £17bn difference reflects somewhat lower expected GDP growth in our projections, and a significantly smaller rise in the ratio of income tax and corporation tax receipts relative to GDP than projected by the Treasury.
The Treasury would still be able to claim that its golden rule of borrowing only to invest would just about be met on average over the current economic cycle, but only by a very narrow margin based on our projections. Looking ahead to the next economic cycle, the picture is far less rosy. The chancellor will either need to deliver a tight spending review next year, with no real increase in areas other than health and education in 2006/07 and 2007/08, or introduce significant tax increases at some point over the next four years.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements