What George Osborne said - and what he meant
George Osborne is fighting a heroic battle to overturn the deficit. Or so he suggested. A sceptical John Rentoul presents his alternative version of the Autumn Statement
John Rentoul is chief political commentator for The Independent on Sunday, and visiting professor at Queen Mary, University of London, where he teaches contemporary history. Previously he was chief leader writer for The Independent. He has written a biography of Tony Blair, whom he admired more at the end of his time in office than he did at the beginning.
Wednesday 05 December 2012
Printed below are extracts from the Chancellor’s Autumn Statement, while John Rentoul gives his analysis.
George Osborne: The Office for Budget Responsibility has today produced its latest economic forecast – and … we also get an independent explanation of why the forecasts are as they are. If, for instance, lower growth were the result of the Government’s fiscal policy, they would say so. But they do not.
It’s all gone horribly wrong, but I have set up an Office for Blame Repositioning to say that it’s not my fault.
So the economy is recovering. It’s recovering more quickly than many of our neighbours.
“Mediocre” in other words. As in “this football team is better than many other teams”.
The previous Government had classified Bradford & Bingley and Northern Rock Asset Management as off balance sheet. Today, it is brought on balance sheet, in line with the judgement of the Office for National Statistics. This adds around £70bn to our national debt and reminds us of the price the country is still paying for the failures of the past.
We’ve been forced to do this by the ONS, but I can use it to blame the previous government.
There are those who have been saying that the deficit was going up this year. But any way you present them, that is not what the OBR forecasts show today. They say that the deficit is coming down. Coming down this year – and every year of this Parliament.
I cannot believe my luck. It’s all gone horribly wrong, but Labour banked on it being even worse and the Office for Blame Repositioning says it’s not quite as bad as that. Home. Dry.
I can tell the House that the OBR have assessed that we are, in their words, “on course” to meet our fiscal mandate.In other words, we have a better than 50 per cent chance of eliminating the structural current deficit in five years’ time – that part of our borrowing that doesn’t recover automatically as the economy grows.
Voters might have thought I promised to eliminate the structural deficit by 2015. Read the small print, suckers. Better than 50 per cent chance of getting there two-and-a-half years late? What would you rather have? Ed Balls?
The point at which debt starts to fall has been delayed by one year, to 2016-17.
This is due to passenger action in France and snow on the line. We thank you for your co-operation and make no apology for any inconvenience caused.
Confronted with this news, some say we should abandon our deficit plan, and try to borrow more. They think by borrowing more, they can borrow less.
It makes perfect sense in the long run, but it sounds daft, so I’ll make the cheap point.
Then there are those who say that despite all that has happened in the world this year, we should cut even more now to hit the debt target. That would require £17bn of extra cuts a year. Let me explain why I have decided not to take this course.
Let me take a leaf out of The Master’s book. Tony Blair’s favourite tactic was to take an extreme argument from the left and disagree with it, take an extreme argument from the right and disagree with that, and then present himself as sweet reason in the middle.
We have today published full details of the replacement for the discredited PFI.
I have renamed it and will continue with it.
Next year, for the first time in our history, money will be flowing from bank accounts in Switzerland to Britain instead of the other way round. Because of the Treaty we’ve signed, we expect to receive £5bn over the next six years from the undisclosed Swiss bank accounts of UK residents. It is the largest tax evasion settlement in British history.
Which we signed with the Swiss government more than a year ago, but I shall announce it again because it is a bit left wing.
Punitive tax rates do nothing to raise money, and simply discourage enterprise and investment into Britain. Other countries on our doorstep are trying that approach and are paying the price.
Je ne vais pas nommer le pays en question.
Benefits are being capped for the first time – so families out of work will not get more than the average family gets for being in work.
That’s not new either, but it goes off the dial in focus groups and Labour is foolish enough to oppose it, so I mention it every time I speak.
Countries like ours risk being out-smarted, out-worked and out-competed by the new emerging economies. We asked Michael Heseltine to report on how to make the Government work better for business and enterprise.
The Christmas trick: terrify the children with the prospect of having to compete with Guangzhou on hard work and low wages, but then bring in the kindly national treasure, Hezza, who slew the Big Bad Thatcher, for a happy ending.
With the Business Secretary’s support, we will extend our global lead in aerospace and support the supply chains of advance manufacturing.
Vince Cable is going to support the supply chains. Everything is going to be all right.
We’re creating a new Business Bank and providing it with £1bn of extra capital which will lever in private lending to help small and medium-sized firms and bring together existing schemes.
We are going to use “lever” as a verb. This will permanently raise the UK’s productivity.
Whenever I’ve been able to help, I have. We have helped councils freeze council tax for two years running – and we’re helping them freeze it again next year. We’ve put a cap on rail fare rises for the next two years, so commuters are not punished for travelling to work. We’re forcing energy companies to move families onto the lowest tariffs for their gas and electricity bills. And we’ve helped motorists with the cost of petrol.
I am a decent and generous bloke, giving away other people’s money with one hand and blaming Labour for taking it away with the other.
Today we’ve helped working people. But I do not want that to distract from the tough economic situation we face in the world. The public know that there are no miracle cures.
But they vote for them time and time again. Thank you.
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