Today we saw Gideon (George Osborne) unveil his first ever Autumn Statement (last year it was a Comprehensive Spending Review) which used to be Brown and then Darling’s Pre-Budget Report, although it’s still the same thing more or less.
What we saw today was a Chancellor willing to blame everyone except himself for his own failures. Gideon may claim as much as he likes that the growing crisis in the Eurozone may have put a dent in its works, but that would just be disingenuous as it’s not at that stage to truly have an impact on a non-Eurozone country such as the UK.
But in a nutshell what we had is:
- Growth forecasts for UK economy cut 0.9% this year and 0.7% next year (And we all know you can’t truly get the deficit down without growth)
- Borrowing forecasts revised up – an extra £111bn to be borrowed over five years (This was the one thing they set about to do, this was the be all and end all test of the Coalition and they are set to fail upon it)
- Pay cap of 1% for public sector workers once two-year pay freeze ends (Which is really going to encourage consumer confidence and spending, the true engine of economic growth)
- Unemployment to rise from 8.1% this year to 8.7% next year and more public sector jobs forecast to go – 710,000 over five years (Again, nothing new there)
- Credit easing and numerous infrastructure projects (I will welcome these, but it’s rather ironic after 18 months of austerity mantra)
- January rise in regulated rail fares to be capped at 6.2%, not 8.2% (While this is certainly better but as a semi-regular rail user, this needs to be below RPI, 5%, we already have the most expensive rail fares in Europe)
- Doubling of free childcare places for deprived two-year-olds to 260,000 in England (The one true policy I’m sure we can all get behind)
- 3p fuel duty rise due in January to be delayed or frozen (Which is still entirely negated with the rise in VAT in January)
- Bank levy to be increased (Which is all very well but not when you remember this is balanced out with the cut in Corporation Tax)
So essentially, we have growth being revised down for the fourth time in 18 months and borrowing expected to be £111 billion higher in 2015.
So when Gideon said “we are out of the danger zone.” around a year ago I didn’t think we’d get around to us saying “we told you so” so soon.