Friday, 7 December 2012

A horror of an autumn statement

So UK Chancellor George Osborne (above) came out with a horror of an Autumn Statement. I don't have to write very much at all today, really, because the numbers speak for themselves. 

Set aside the pain for average families, which (although those on very high incomes are indeed also being squeezed) will last a long time - especially if you're in receipt of any welfare benefits or tax credits.

No, there are two real horrors for anyone who believes in the credibility of UK government policy. The first: an accounting wheeze, taking Bank of England debt vouchers onto the Treasury's books to make it look as if the deficit is going down. Coupled with putting in cash from a 4G mobile phone auction that hasn't even happened yet, that's a hell of a sleight-of-hand.

And the second? The fact that spending cuts stretch as far as the eye can see - and that no-one believes a word of them. Does anyone out there really believe that non-ringfenced spending (that falling outside of schools and hospitals) is really going to fall by a further 31 per cent in the five years from 2013, after everything's being slashed already? No, they don't - the Institute for Fiscal Studies has termed the idea 'inconceivable' - and the result will eventually be a hit to UK financial credibility as bad as the deficit reduction strategy that's never really worked.

That's why I would say that the Government's strategy is not working very well - if at all. And why it threatens the UK's credit rating. Why? Because we've been left with only a grotesque parody of old-fashioned homilies when an economic policy should be.

It's hurting. But it's not really working.

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