Chancellor's Autumn Statement

Thrugelmir

BertieUK wrote: »

then when the next figures are published he has to make more adjustments.

So easy to run an economy...............

grizzly1911

Thrugelmir wrote: »

So easy to run an economy...............

He could just budget on the basis of zero growth.

Thrugelmir

grizzly1911 wrote: »

He could just budget on the basis of zero growth.

The devil's in the detail. Growth is a red herring.

prowla

GeorgeHowell wrote: »

If it were done by Plan B(orrowing), the young of today will bear the brunt when the s**t hits the fan. You can't go on borrowing more and more forever. Labour's way would inevitably lead to a major crunch some time down the road, with the IMF or whoever imposing cuts that would make today's look like a picnic by comparison.

Labour's approach already has led to a major crunch - the one we're in right now.

lemonjelly

Reading this thread is quite strange.

Does no-one realise the message being sent out by the cut in corporation tax?

& lets look again at what George has said & examine it a little more closely:

Against expectations, George Osborne announced in his Autumn Statement that borrowing would fall, not rise, this year. The news cheered the Conservative backbenches and clearly threw Ed Balls, who was jeered by Osborne and David Cameron as he mistakenly said the deficit was "not rising" (he meant to say it was rising). Borrowing so far this year is £5bn (7.4 per cent) higher than in the same period last year - it seemed there was no way out for the Chancellor.

So how did he do it? Well, turn to p. 12 of the Office for Budget Responsibility document and it becomes clear that Osborne has performed an accounting trick worthy of Enron. First, he added the expected £3.5bn receipts from the 4G mobile spectrum auction - even though it's yet to take place. Second, he included the interest transferred to the Treasury from the Bank of England's Quantitative Easing programme (worth £11.5bn), despite the Institute for Fiscal Studies warning him that it would call into doubt his credibility. Were it not for these two measures, borrowing would be £15bn higher than stated by Osborne. If we add that £15bn to the £108bn figure provided by the OBR, then total forecast borrowing for this year becomes £123bn, £1.4bn higher than last year. Little wonder that the Chancellor was so keen to bag the 4G receipts early.

But while these fiscal somersaults might allow Osborne to claim he's reduced borrowing, what reputation he had for statistical transparency has been destroyed. In his speech to the Commons, the Chancellor boasted that "it is a measure of the constitutional achievement that it is taken for granted that our country’s forecast is now produced independently of the Treasury". That claims looks very questionable today.

http://www.newstatesman.com/politics/2012/12/revealed-how-osborne-manipulated-borrowing-figures

So essentially, he has at the very least, mislead the house.

It is true to form though:

The UK Statistics Authority upheld a complaint by Labour about government claims the NHS budget had increased in real-terms in the past two years.

The watchdog found the best-available Treasury data suggested real-terms health spending was lower in 2011-12 than in 2009-10.
In a letter to Health Secretary Jeremy Hunt, Mr Dilnot said: "On the basis of these figures, we would conclude that expenditure on the NHS in real-terms was lower in 2011-12 than it was in 2009-10.

"Given the small size of the changes and the uncertainties associated with them, it might also be fair to say that real-terms expenditure had changed little over this period.

"In light of this, I should be grateful if the Department of Health could clarify the statements made."

http://www.bbc.co.uk/news/uk-politics-20600852

Ever get the feeling you're being lied to?

pqrdef

lemonjelly wrote: »

But while these fiscal somersaults might allow Osborne to claim he's reduced borrowing, what reputation he had for statistical transparency has been destroyed. In his speech to the Commons, the Chancellor boasted that "it is a measure of the constitutional achievement that it is taken for granted that our country’s forecast is now produced independently of the Treasury". That claims looks very questionable today.

They just produce lots of alternative measures so he can choose the one he likes best.

Isn't there going to be a new version of RPI? Wonder what he'll use that for.

He only has to keep the BOE and the ONS and the OBR and the NAO sweet, and he does. Can't trust anybody nowadays. Perhaps we need an independent regulator.

grizzly1911

lemonjelly wrote: »

Reading this thread is quite strange.

Does no-one realise the message being sent out by the cut in corporation tax?

& lets look again at what George has said & examine it a little more closely:


http://www.newstatesman.com/politics/2012/12/revealed-how-osborne-manipulated-borrowing-figures

So essentially, he has at the very least, mislead the house.

It is true to form though:


http://www.bbc.co.uk/news/uk-politics-20600852

Ever get the feeling you're being lied to?

Misrepresented statistics what is new.

I must admit I got a bit lost in his speech when he kept using figures +/- some form of adjustment and just accepted they were fudging.

grizzly1911

pqrdef wrote: »

They just produce lots of alternative measures so he can choose the one he likes best.

Isn't there going to be a new version of RPI? Wonder what he'll use that for.

He only has to keep the BOE and the ONS and the OBR and the NAO sweet, and he does. Can't trust anybody nowadays. Perhaps we need an independent regulator.

They expect us to believe they are all truly independent that is what amuses me. they are in lala land.

chewmylegoff

lemonjelly wrote: »

Ever get the feeling you're being lied to?

Absolutely. Nothing has changed. This government lies as much as the government before it, which lied as much as the government before it etc etc. The opposition lies and misleads too (their favourite lie during this administration is that David Cameron is personally writing a cheque for £40,000 to ever miliionaire in the country).

Politics is lying and hoping that the number of morons who believe you outweighs the number of people who know that you are lying through your teeth.

As a footnote there isn't really that much wrong with including the estimated revenue from the 4G auction in the projected borrowing figures.

The government is not giving final figures it is saying how much it expects to borrow during the financial year ended 5 April 2013. The auction is in March 2013. Would be odd to excluded expected income during the period. This is not Enron esque accounting but a normal financial projection as far as I can see.

Or are you suggesting it is also wrong for the govt to include projected tax revenues which will be received between now and the year end in its borrowing projection? Presumably it's also wrong to factor in estimated public spending which hasn't happened yet?

It's right that the 4g revenues are a one off and will make the figures look better than they are, but it's also right to include them in the forecast. That's what a forecast is - estimated future income and expenditure.

pqrdef

chewmylegoff wrote: »

The auction is in March 2013. Would be odd to excluded expected income during the period. This is not Enron esque accounting but a normal financial projection as far as I can see.

Well, if the buyers are going to hand over cheques for payment in full before they walk away with their shiny new 4Gs, whatever they are. But if he's booking the revenue as soon as the deal is done without waiting for payment, that does seem a little Enron-esque.

Because he will need to borrow that money. Or perhaps he can get the BoE to do some free 100% invoice factoring and then persuade the ONS it isn't borrowing. Well yes, of course he can.