Osborne is telling another of his wheezing yarns which he’s much better at than solving real problems. His first yarn in 2010 was that he would eliminate the structural deficit by 2015; it turns out that it is currently £92bn. His next yarn today is that he will now eliminate it by 2017-8. Fat chance. His own figures tell an utterly different tale.
The Treasury Red Book accompanying his April 2015 budget states (p. 22) that public sector net borrowing was £97.3bn in 2013-4 and only reduced by £7bn to £90.2bn in 2014-5. The same table is now predicting that it will fall by £15bn this year, then by £36bn the next year, then by another £27bn the following year, and by a further £17bn the year after that. Does anyone seriously believe this?
He’s kicked off today by repeating his immediate £30bn cuts target. Nearly half of this is aimed at the law enforcement segment of the British state (judiciary, prisons, courts, military) which will risk disorder and provoke open rebellion on the Tory Right. The £12bn welfare cuts Osborne is aiming at carers’ allowances, disability benefits, child benefit, industrial injury benefits, and tax credits (thus including millions in in-work poverty) he probably regards as a soft and easy target, but sooner of later like Thatcher’s poll tax will trigger an uprising. His declared £5bn saving on tax avoidance is risible: he’s never got near this in 5 years of boasting of his crackdown.
Another yarn that Osborne likes to boast about is that he’s halved the deficit. He has done no such thing. The deficit peaked at £157bn in 2010, and Alistair Darling in his his last two expansionary budgets brought this down, bearing in mind that it takes 12-18 months for budget measures to work their way through the economy, to £118bn by 2011-12, a reduction of nearly £40n in 2 years. Osborne’s austerity budgets then drastically slowed the reduction to just £26bn over 3 years. At this rate it would take 10 years, not the 2 years Osborne is proclaiming today, to eliminate the budget.
But he won’t even achieve it in 10 years. The latest economics data is dire, both because productivity remains flat and private investment (Osborne wont do public investment) remains weak and anaemic. As a result in the the last 3 quarterly periods growth has plummeted by two-thirds to just 0.3%. If this continues, Britain under Osborne is facing neither a recovery nor elimination of the deficit, but a serious risk of a third economic recession,
And yet no one is telling the public this.
If this were a Labour chancellor, every missed target and every new “revised timetable”, every lie and fudge would be paraded across the front pages on a daily basis.
What do we get from the press to day? Osborne is our economic saviour and we should be glad he is in charge…
Someone recently argued that one section of capital (oil) had recently been willing to take a temporary hit – with people feeling a bit better for a while without needing “exessive’ pay demands but this favour is probably soon to pass; it may have done its short-term job.
More has come in from VAT recently and suddenly more receipts from Corporation Tax – rich pals helping out?
And Streeck argues that quantitative easing has only bought off the financial crisis for a few years.
Evidence seems to show the Tory drive for cheap labour has also reduced tax receipts, and state aid for poverty pay is up to £11b (£1b for major supermarket staff alone).
And commoditiy purchases have probably only been sustained by massive and unsustainable levels of personal debt – the old credit card.
So a Tory Govt operating behind Neo-Liberal blindfolds.
I’ve got a theory that if the Govt went on Holiday for 2 months nobody would notice, and the Economy would right itself, by its own efforts, and natural self corrective measures that would bring it back into equilibrium.
Someone once told me I must be mad to start supporting a local food bank, the problem would support itself out, but no; I believe in human intervention.
After all, “Markets is people.”