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Osborne’s claim of a let-up in austerity in next 5 years is a lie

Osborne party politicalGeorge Osborne didn’t deliver a budget yesterday. He delivered a party political broadcast on behalf of the Tory party in which analysis of the macroeconomic state of the economy, which is the real purpose of budget statements, was almost totally absent. Osborne’s speech yesterday had two aims. One was to give the impression that the worst of austerity was now over and the sunny uplands beckoned if you vote Tory at the election. The second was to shoot as many Labour foxes, i.e. Labour’s successful attack lines, as he could squeeze into an hour on his feet in the Commons. Careful analysis of the figures after the speech was over showed the magnitude of his failure on both counts.

First, Miliband was right to point out in a brave and forceful speech immediately after Osborne sat down that the Treasury’s own Red Book (p.69) shows government expenditure falling significantly in the years 2017-9. Even more significantly, Osborne claimed that lower inflation, etc., enabled him to ease up on his target of a £23bn surplus in 2019-20, having eliminated the structural deficit, but the pathway by which he allegedly reaches this £23bn surplus is pure cloud-cuckoo-land. The rate at which the deficit (i.e. public sector net borrowing) has been reduced under the impact of Osborne’s austerity budgets has averaged £7bn a year, and the deficit still stands at a huge £90bn. Yet suddenly, according to the Treasury Red Book (p.23), the deficit will go down by £15bn next year and then by a whopping £36bn the year after, then by £27bn the following year, and then by £18bn in 2018-19. These are confetti figures, invented to tell a political narrative for which there is not a shred of evidence.

This is the most enormous con that is being perpetrated on the British people. Either these figures are wildly wrong and these deficit reductions will never remotely happen on this scale, or Osborne will somehow try to force them through, in which case cuts in benefits and departmental expenditure will be imposed at an annual rate up to 4-5 times bigger than has been experienced so far, which would be politically untenable and bound to lead to an explosion on the streets. Osborne’s budget arithmetic is just nonsense.

Nor, second, has Osborne shot Labour’s fox that he is still determined to take the British state back to the 1930s, which was the cat he let out of the bag in his Autumn Statement 3 months ago. The OBR report on the budget (p. 75) gives the lie to any idea that he has backtracked when it states that government expenditure under Osborne’s latest twiddling of the figures “would be the joint lowest level in consistent National Accounts going back to 1948″.

3 Comments

  1. Robert says:

    You mean it’s spin and PR well I think we do not need you to tell us. The issue is what is labour offering and it’s pretty much the same only slower.

    The fact is Reeves made a great statement this week then today we have other MP’s saying she is right labour is the party of working people not welfare, which means anyone getting welfare and pensions are classed as Welfare scroungers and need to find another means of voting.

    Right wing Tories Right wingers in labour.

  2. Barry Ewart says:

    If Tories get back in just a few examples:
    £12b of further benefit cuts.
    £10 charges to see your GP.
    The freedom to frack under your house as Cameron and Osborne say, “Drill baby drill!”
    (Labour propose ballots in communities before fracking could go ahead).
    Tory massive state intervention to screw the poor, screw poor patients, and screw the Earth!

    1. Robert says:

      Blair said pay £35 and not forgetting this was a labour Lords plan to change people £10.

      Let me remind you of Reeves statement, Labour will be hammering down on welfare even more then the Tories.

      This week labour is the party of people in work, it’s in the name. what the hell has Progress got to do with work.

      Labour is not the party of welfare we are not the party of benefits, she would have said Scroungers but the labour party have stooped that.

      Reeves is ex Chair of Progress and a fully Blown Blair-rite.

      The problem is what ever the Tories can do the Progress party can do better.

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