How are taxes raised and spent?

One of the main policy differences between the three big parties in this years election is that of taxation and cuts. All parties agree that cuts need to be made and the chances are that taxes will rise in the coming years.

So how are taxes raised and spent?

• In this years Budget, the current Labour Government said that would spend £704 billion during the year up to the end of March 2011.

• The Government expect to raise £541 billion through taxation, with most coming from Income Tax (£146 billion), National Insurance (£97 billion) and VAT (£78 billion).

• They would need to borrow £163 billion to make up the difference between taxes and spending.

• Most money raised will be spent on health (£122 billion), education (£89 billion) and social protection e.g. benefits (£196 billion).

• Other key spending includes Public Order (£36 billion), International Development (£6 billion) and defence, social services, housing, transport, industry etc. (£210 billion).

• Interest on the debts the government has built up will come to £43 billion.

Brilliant advert for Seriously Strong cheese.

Tesco announce huge pre-tax profits!

Tesco continue to to flourish despite the global economic crisis as they announced pre-tax profits of £3.176bn for 2009, up 10% on the previous year. Some interesting information from the news:

• International sales account fro £17.5bn of its £56.9bn annual revenue.
• It plans to create 16,000 jobs this year, 9,000 in the UK.
• It expects non-food and international sales to grow fastest in the recovery.
• Toy sales were up 25% - helped by the clothes like Woolworths closing down.
• Sales of clothes reached £1bn for the first time.
• Tesco finance profits were up 13% at £250m

It also said it had been getting round the disruption caused by flights being grounded by getting their Kenyan suppliers to fly fruit and flowers to Spain and picking them up by truck to transport to the UK.

Eyjafjallajökull - Who wins and who loses?

Airlines - LOSERS!

Obviously the main casualty is the airline industry. The industry is estimated to be losing £130 million a day and could hardly come at a worse time, considering it is already expected to lose £1.4 billion this year. Travel companies are also being hit hard - TUI who own First Choice & Thomson claim they are losing between £5m and £6m a day.

Other Transport - WINNERS!

Eurostar, P&O ferries and train services across Europe and the UK have recorded huge surges in passenger numbers as people find alternative methods to get home.

Tourism - MMMMM?

The effect will be small if the disruption doesn't last too long, particularly as this is not the main peak time for tourism in Europe. Customers stranded and spending more will make up for the expected loss from those unable to make the trip. However, if the disruption continues, it would have a much greater impact if it lasts into the busy summer months.

Imports & Exports - DEPENDS

The disruption has businesses who deal in perishable goods generally transported by air - e.g. food and flowers. Africa and South America, producers of much fresh food transported to Europe are experiencing serious losses. However, most international trade uses road, rail and sea freight - only 1% of UK's trade is carried by air.

Other Business Costs - LOSERS!

Staff being stranded, air mail being delayed and meetings being cancelled are likely to result in lost money for businesses and productivity is expected to suffer as staff can't get back to work.

Economic Growth - MMMMMMM?

If it is short-term, the economic impact is expected to be minimal - however, an extended period without air transport could be very damaging, particularly as the economy is just recovering from recession. A possible drop of 1% and 2% for some European countries could result in no growth for this year.

How have supermarkets continued to make profit in the recession?

I watched a really interesting programme by the ITV Tonight team on how supermarkets have continued to make huge profits despite the worst financial crisis in over 60 years. Well worth half an hour of your time!

Supermarkets