The real chill in the Autumn statement

Parliament Fence & Big Ben by Jay Fergusen at Flikr A budget package in December may not be Autumn, but it certainly had a real chill for those least able to afford its consequences.

This was a classic Osborne budget statement. Massive real cuts, sugar coated by handing back a few pennies in the form of announcements on the NHS and infrastructure. Yes, Scotland will get £129m of Barnett consequentials from the NHS announcements, but this goes nowhere near making up for the real cuts ahead. This chart from the Office of Budget Responsibility makes it perfectly clear where public spending is going. Continue reading

Even by Osborne’s standards this is the most dishonest budget since the war

Osborne Liar LiarThis was the thinnest Autumn Statement (mini-budget) in living memory. There was nothing new in it of any significance except the change from the slab system to the stepped system for stamp duty. But on the key issue which underpinned the whole statement, namely that this year the deficit is rising, not falling, there was a shock. Since admitting that the deficit will this year rise from £86bn to about £91bn, and then next year to around £100bn, was too much loss of face for Osborne to bear, he decided to resort to an enormous lie. Continue reading

George Osborne’s careless Autumn statement

alls and OsborneWould you trust someone with the economy when they don’t know what season it is? Well, the British electorate did as as it’s winter that means Autumn Statement time! How exciting. Alas, a bravura performance from George Osborne it was not. Forced to backpedal on collapsing tax revenues and missed deficit targets, while throwing in the bingo phrases – “the mess we inherited“, “Labour’s recession“, and “long-term economic plan“, it was enough to keep the Tory benches in good, if hardly excitable, order.

Yet over the way, it was a different story. Rarely have the two Eds been tickled as pink as they were this afternoon. To have Ed Miliband openly mocking you with no comeback … how can the man who would lead the Tories recover from that? Then came a forensic demolition from Ed Balls, followed by a savaging (a savaging) by Alistair Darling to the chimes of laughter all round. Not good. And then, at the end of the day, putting the boot in as only they know how the Tories’ willing little helpers over at BIS blasted Osborne’s tax plans as fantasyland economics. Not a great day, all told. Continue reading

Osborne checkmated by his own austerity

CheckmatePolitics has a curious way of coming back to haunt politicians in a way they never intended or expected. Osborne is a case in point. The whole thrust of his austerity strategy, as he repeatedly told us, was to eliminate the structural deficit in this Parliament. On that basis he predicted in 2010 that the deficit would be down to £40bn this year. It is actually around £100bn. Worse, the deficit is no longer shrinking at all, it is rising. Alasdair Darling’s two expansionary budgets in 2009-10 set in motion economic stimulus which reduced the budget deficit from its peak of £165bn (at 2013-4 prices) to £115bn, a cut of no less than £50bn in two years. Osborne’s austerity budgets then kicked in and the deficit actually increased to £121bn in 2012-3, before falling to £98bn last year. This year it is set to rise again to either just below or just above £100bn. The whole deficit reduction programme, after all the impoverishment and pain it has inflicted, has gone pear-shaped. It is worth asking why. Continue reading

The Autumn Statement and Long-Term Austerity

George Osborne’s Autumn Statement brings home the stark reality that on current policy settings economic stagnation and ‘austerity’ will be a permanent feature of the British economy for many years to come.

The Office for Budget responsibility (OBR) has a hopelessly over-optimistic track record in forecasting GDP growth. Fig.1 shows the actual outturn on GDP compared to its forecasts. In 2010 a recovery of all the output lost in the recession was two years away, according to the OBR. Now it is still two years away. Continue reading