I'm curious George. What's in your box?

Generali

Out,_Vile_Jelly wrote: »

Posture, waffle, guff, bluster, blame the previous government, big up something minor they've introduced, fail to answer the question and mention "hard working families" about six times.

Basically the same as every other budget then.

kabayiri

I think Mr Osborne will mothball Scotland for a good few years.

That should save us £15bn a year of deficit shouldn't it?

Plus, the immigration of millions of Scots down South will be a benefit, because, it's immigration and Hamish tells us it is universally good !

CLAPTON

lawriejones1 wrote: »

I'm guessing this isn't the place to go into these things, because what one person states as fact is actually just opinion. What does strike me, and the OBR and pretty much anyone else that looks at these things (including financiers, bankers and large-scale investors) is that what Osbourne is doing is not working at all, and continuing to do the same thing is going to dig us deeper into the hole that we currently are stuck in.

What we need to do is to stimulate growth in the economy, which is going to come with consumer and business spending.

We'll see. I don't think history is going to be too kind to Cameron and Osbourne, but perhaps I'm wrong.

the government are far to interventionist and raising taxes too much however, one has to observe that we do have one of the lowest unemployment rates in the EU

mwpt

Out,_Vile_Jelly wrote: »

Posture, waffle, guff, bluster, blame the previous government, big up something minor they've introduced, fail to answer the question and mention "hard working families" about six times.

"long term economic plan"

princeofpounds

What does strike me, and the OBR and pretty much anyone else that looks at these things (including financiers, bankers and large-scale investors) is that what Osbourne is doing is not working at all, and continuing to do the same thing is going to dig us deeper into the hole that we currently are stuck in.

On what score is it not working? Here are some pretty basic statistics:


The UK budget balance was -10% of GDP in 2009. It is now -4.4%.


UK GDP growth has ranged between 1% and 3% every year since 2010, with an average of 2.1%, compared to -5.9% trough during 2009. In the same five year period prior to the crash (i.e. up to December 08 - so not attributing the crash to the previous regime), it was... 2.1%. Trend growth is slightly lower than the full late 90s, early 00s boom, but that would be like comparing the post-crisis environment to effectively a golden age.


It also compares very favourably vs. other world economies, except perhaps the US.


If this is a 'hole', it's a very comfortable, fur-lined batcave of a hole.


UK Govt Debt/GDP rose from 43% in 2006 to 85% in 2011. From 2011 to 2015 it also rose, but only to 91% (and indeed has actually fallen slightly since 2013).


UK unemployment was at 5.2% in 2007. It was 8.4% by 2011. It is now 5.1%.


Real wage growth has been disappointing, being slightly negative in 2012,13 and 14 (but growing properly in 2015). But total real wages paid (which is what really matters, especially to the marginally employed) has increased rather quickly, largely because of that surge in employment.


I don't support everything Osborne has done as Chancellor (largely on the stealth tax and ad hoc housing stimulus policies front), and in some respects there are natural economic recovery cycles here.


But this 'myth' that recent economic policies haven't produced results I find quite strange. Vast amounts have been achieved.


Maybe it's slightly slower than originally intended. Maybe the policies will produce unintended consequences (although frankly every economic phase in history does).


But there are some pretty lazy claims, particularly in the media, about how 'austerity isn't working'. But if offered in 2009, we probably would have grasped these outcomes with relief.

stator

More robbing of the poor to feed the rich, I bet.

Filo25

Oddly enough on the topic of austerity if you look at the debate back in 2010, Osborne was ultimately proven wrong.

Osborne wanted to wipe out the deficit by 2015 by my recollection, Labour wanted to cut slower as they said cutting faster would push the economy back into recession, Osborne cut hard early in the last government, the economy returned to recession and then eased up on austerity in the latter part of the parliament, to help the economy return to growth.

A politically savvy, economically trusted opposition would have hammered him for that, fortunately for Osborne that wasn't something he had to worry about!

princeofpounds

Osborne cut hard early in the last government, the economy returned to recession

No, it didn't. Growth just slowed a bit. From ~1.9% to 1.1%. That sort of change is well within normal volatility and in fact almost within margin of error.


Having said that, you are entirely correct to say that the rebalancing path he ultimately pursued was less aggressive than originally planned.


But the reason for this was little to do with expenditure. He actually met the original expenditure targets set out in 2010 at 40% of GDP.


The slower path of deficit reduction was entirely due to lower tax receipts than expected. He planned that they would rise to 38% of GDP, but they stayed at about 36% of GDP.


That in turn is attributable to two basic factors. One is that growth has been slightly slower than forecast (and the tax take is a little bit procyclical). The other is that income tax receipts didn't grow as originally planned.


And the main reason for that is the large rise in the personal allowance.


Again, there appears to be a popular misconception around this development - people often seem to think that Osborne backed away from 'hard-Tory' cuts to help the recovery along by reducing the difference with some theoretical Labour spending plan.


Actually, he did the cuts, but chose to reduce tax take from lower earners - it was a stimulus relative to the original plan, but it was absolutely not a government spending stimulus.


Personally, I think this was a fantastic policy (and the Lib Dems should get credit for it too) on a structural level.


But that aside, it's very interesting to see how the popular critique of Osborne as Chancellor is basically misguided, just by looking at a little data.


As an aside, I also happen to believe that popular critiques of Brown are also somewhat off-the-mark as well.


I do think he made tragic mistakes, but actually those mistakes were less about what happened before the crisis, and more about the decisions he made during the crisis. Whereas ironically his reputation is typically for someone who mismanaged prior to the crisis but 'saved the world' from the depths of it.


Edit: Oh, and tax credits were brainless.

kabayiri

Osborne failed to hit his deficit targets in the last parliamentary term.

He has an opportunity to hit the targets in this parliamentary term.

He won't be forgiven twice.

It is time that political targets actually meant something, otherwise they will continue to make promises they don't actually believe in.

Filo25

Apologies, you are right on the recession princeofpounds, there was of course one at the time per ONS statistics which is what I was recalling, but that was subsequently revised when the quarterly stats were subsequently amended to being flat rather than showing negative growth!