So, post Autumn Statement, we are now clear on the extent of the square-jawed resoluteness of the Prime Minister and the Chancellor of the Exchequer. They read from the same script: “our Long Term Economic Plan is working” and the UK must “stay on the course to prosperity“. The question is, whose prosperity?
Contrary to the script, what the Autumn Statement demonstrated is that the long-term plan isn’t working (at least not for the purpose stated). As Ed Miliband had already noted, speaking in Nottinghamshire on Monday, they have missed “every single target they set themselves on clearing the deficit and balancing the books by the end of this Parliament”. This includes:
- A shortfall of more than £66bn in income tax receipts
- National Insurance contributions £25.5bn lower than expected
- Social security expenditure £25bn higher than planned
- Borrowing going up and the deficit has worsened
Ed Balls has pointed out that the deficit will not come down “unless growth is strong and wages are rising for working people”. But growth is actually slowing and pay is falling, with people on low incomes seeing their wages fall the most.
The government will have to borrow as much as £75bn more than it intended over the next five years to make up for collapsing revenues from income tax, oil sales and stamp duty. Tax receipts are forecast to be £23bn lower in 2014-15 than predicted. Maybe that’s because poor people can’t pay tax and corporations won’t pay (or are gifted tax cuts).
Smoke and mirrors
The Autumn Statement is full of dodgy accounting. The Independent lists several of these tricks. For instance, Cameron had already announced the headlining £15bn road-building programme at the CBI conference last month (and, as reported in the Daily Mail, no less, the Campaign for Better Transport says it “will trash protected areas and do nothing for the economy”).
The £2.3bn for flood defences had already been allocated as part of a “national infrastructure plan” that will span the next six years, and £750m of the £2bn for the NHS is being reallocated from the existing health budget with the rest coming from under-spending by other Whitehall departments.
The Institute for Fiscal Studies says Cameron is using an inconsistent definition of “savings” when he says the government has made £100bn worth. And as for the deficit, having failed to erase it as promised, Osbourne’s plan now is to halve it by the election.
Then there’s the announcement that the government will pay back all the World War I debt – what Osbourne calls “a moment for Britain to be proud of” and “a sign of our fiscal credibility”. Only problem is, it’s not true; he’s actually refinancing it.
The cover up
All of this obscures Cameron and Osbourne’s real agenda of shrinking the government, buttressing the financial sector and adding even more to the coffers of the already mega rich. And they are succeeding in advancing these goals.
They have fooled many into believing the myth that Labour “got us into this mess” and the even bigger lie that it is they who are clearing up the mess by “making the difficult choices” in a painful austerity programme that takes from the poor and gives to the rich. It is all a big scam.
In “Pain, No Gain: The Austerity Scam”, John Weeks recalls how Osborne predicated the programme of cuts on “a deficit, expenditure over revenue, of 10% of gross national product, allegedly unprecedented during peacetime”. But as Weeks points out “the deficit … was higher under the John Major government in 1994 (minus 9.1% of GDP compared to 8% in 2010)”.
The fact is that the deficit was not caused by Labour’s spending or by “welfare scroungers”. The global financial melt down was a direct result of corruption and fraud in the global banking sector. Yet the government led by Cameron and Osbourne has taken no action to get that sector under control.
But who is paying the cost?
The evidence is clear. “Britain is on the brink of becoming a nation permanently divided between rich and poor,” according to the Social Mobility and Child Poverty Commission, which predicts a rise in absolute poverty from 2.6 million households in 2010 to 3.5 million in 2020.
The numbers on child poverty, homelessness and reliance on food banks are increasing in tandem with the numbers of billionaires taking up residence in London (up from 39 in 2012 to 43 in 2013 and on Forbes list of the top 10 cities for billionaires).
Osbourne wants MPs to vote next week on his “Charter for Budget Responsibility”, which would set a target in law to eliminate the deficit and balance the books by 2017–18. It’s easy to see what the trickster is up to. The next government will be locked into his austerity programme; win or (more likely) lose, he wins. And we will lose too, with the state projected to fall to its lowest size since the 1930s, according to projections by the Office for Budget Responsibility.
On a final note
The Twitter hashtag, #CameronMustGo continues to soar – still trending unabated and projected to reach a million tweets today. One positive thing that can be said about Osbourne’s Autumn Statement; it provides plenty more fodder to keep the hashtag trending for some time to come.