Economics focus: The tax base is weaker than it should be

For the past few years those of us who follow these things closely – perhaps too closely – have been waiting for some fireworks on the budget deficit. We knew that when economic growth was subdued it was unreasonable to expect public borrowing to tumble.

Once growth really got going though and the economy began to expand at a decent rate it was perfectly realistic to expect the deficit to start falling fast. That was what happened in the 1990s when it took five years to go from a big budget deficit to a surplus. Why should it be any different now?

Sure enough...