That Autumn Statement in full

That Autumn Statement in full

by Bill Jamieson
article from Wednesday 3, December, 2014

HOORAY, it’s here at last. The Autumn Statement. Wednesday December 3 may be the official date. But for days beforehand we’ve had nothing but leaks. And not unofficial, unauthorised, naughty disgruntled civil service leaks. Real, honest-to-goodness official leaks. Top quality leaks you can trust!

Now you may have gained the impression that this was going to be a grim day for the chancellor.  The budget deficit is running way above target. Total public sector net debt is blasting through £1.45 trillion. Annual debt interest costs are already over £50 billion.

There’s no way the country is going to avoid continuing cuts in public expenditure – and quite possibly, tax rises – over the next three to four years. 

So this was set to be a most sobering statement of the government’s finances. A beetle-browed George Osborne would tell us that while he’s going in the right direction and that the budget deficit is down on where it was in the immediate aftermath of the global financial crisis, tax revenues have not risen as strongly as expected. 

So the government has had to borrow more. More than it did in the first seven months of the last financial year. And far more than he had forecast in the budget back in March. 

Indeed, so bare is the Treasury cupboard that there is no scope for giveaways and spending boosts in the run-up to the general election next May.  No room for manoeuvre. No sweeteners or expensive gimmicks. No, sirreee. 

This was to be the monochrome election, with budget deficit and debt reduction the declared priority of both Conservative and Labour parties.  The position is grim. We’ve got to get real. The deficit must be tackled. Voters will respect the honest truth. 

If you believed a single word of that, think again. Because over the past week we have not just had leaks – we’ve had cataracts of gushing money. Voters can be excused for thinking that by Wednesday morning there’s more funding for more projects than you can shake a stick at. A budget deficit problem? Whatever gave you that idea? We’re rolling in it!

Here is a brief resume of some of those official leaks in the past few days. 

It started with an extra £2 billion pledged for the NHS. Ah, the sainted NHS! The nearest we have got in Britain to an official sacred cow, a towering totem to which we can approach only with the deepest and most unquestioning deference, bent double as we drag more bags of money to place at its anointed feet. Nothing is ever enough for the expanding, unaccountable utterly opaque bureaucracy of the NHS. 

But this was just the beginning. 

The morning after the NHS spending promise came a pledge to spend £15 billion on upgrading Britain's road network. Prominent among the designated improvements to our roads, many of them in coalition constituencies, was one in particular to capture the public imagination: an urgently needed tunnel for the A303 near Stonehenge. 

So pressing is this priority, so close to the national heart, that both David Cameron and the Deputy Prime Minister Nick Clegg had a “photo op” (for a leak! Ed.) in the shadow of the Stonehenge stones. It’s that urgent. All it needed was for Nick Clegg to announce that the monument would be divided up and dispersed across the nations and regions of the new federal Britain to fill our eyes with tears of relief and happiness. 

If you still thought we have a debt and deficit problem – more fool you. 

Barely had the news crews packed up their gear at Stonehenge than they were beckoned to Bicester in Oxfordshire, chosen as the site for the government’s second new garden city. Some 13,000 new homes are now scheduled to be built on the edge of the town.

Commuters, apparently, are attracted by its location just off junction nine of the M40 and good train links to London, Birmingham and Oxford. And here’s the clincher: Bicester Village – a retail outlet – is also a major draw and last week police warned motorists to avoid the area as its roads had become gridlocked with Black Friday shoppers. 

Nor did the leakers stop here. The Treasury now let fall that more than 1,400 flood defence projects will receive funding to protect 300,000 homes. The £2.3 billion investment will help prevent £30 billion damage in areas including the Thames and Humber Estuaries in the next six years.

Now we are assured that this is not “new money”, just “old money” presumably lying around unused in some departmental cupboard until its fortuitous discovery. But isn’t it still money? It still counts as money borrowed even if it’s “old”.  

A borrowing problem? Whoever would have thought it? Yet this week two independent economic forecasts predicted that the official figures for the deficit would have to be revised up as the country will be borrowing almost as much this year as it was a year ago. 

As for Her Majesty’s Opposition, there seems little by way of restraint here either. Shadow chancellor Ed Balls says he'll “make different choices” and “get the deficit down in a fairer way” But is the deficit reduced? The independent Institute for Fiscal Studies say that Labour's laxer borrowing rules would allow them to spend up to £28 billion a year more than the Conservatives. 

So three cheers for the Autumn Statement. Don’t be fooled by those dark intonations about higher deficits and ever rising debt. The figures may tell us one thing, but the leaks quite another: the “austerity” (sic) government will spend its way to the election. 

And Labour will be no slouch on spending commitments, either.   If ever you wanted to know why mainstream politics is now viewed with such distrust and contempt by voters, the past week provides ample evidence. Leak on. We’ve money to burn… don’t we?

 

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