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Reading between the headlines

Nick Robinson | 09:16 UK time, Thursday, 24 March 2011

On the morning after the Budget before I was struck by the chancellor's sobering tone. George Osborne has secured the headlines he wanted - welcoming the fuel duty cut, the tax cut for business and the return of the world's biggest advertising group, WPP, to Britain.

George Osborne

However, the upheaval in the Middle East, the continuing instability in the eurozone and growing resistance to spending cuts at home will soon wipe those from the memory.

If the world oil price continues to soar, Portugal has to be bailed out and hundreds of thousands take to the streets this Saturday to protest the chancellor's problems will only just have begun.

Osborne had to strain every sinew simply to limit and postpone tax rises on fuel rather than to scrap them altogether. In six months time he may face demands to do it all again. Added to that there will, no doubt, be calls to stop closures of hospitals, libraries, Sure Start or to reverse other tax rises and benefit cuts or to help this or that industry.

So far much of the talk about spending cuts, benefit curbs and tax rises has been just that - talk. People will really begin to notice the Treasury squeeze at the beginning of the new financial year on 6 April when many of the changes kick in. In the weeks and months after that the spending cuts will begin to be felt.

No wonder the chancellor's sounding sober. No wonder Labour are gambling on it all going wrong.

Comments

Page 1 of 5

  • Comment number 1.

    re #69 from previous NR Blog
    Nice one, Fubar!

    No-one has accepted my recent invitation to discuss the broadness of the current political parties, made on SF's Blog (if I recall correctly - probably wrong place) but behind it was my wondering whether we might see one or more splits before 2015.

  • Comment number 2.

    It needn't be like this. The Tories could slow down this drasticically fast cut in everything. There isn't going to be a couple of burly debt collectors turning up at 11 Downing Street in 2014/15. It took many years to get us into debt, why try and get rid of it in such a short space of time?

  • Comment number 3.

    'No wonder Labour are gambling on it all going wrong.'

    With most politics, and all media predicated on such eventualities for the minority who occupy these limited bubbles to compete and prevail, if in self-serving cycles, the state of the country, and the vast majority having to fund such selfish shenanigans, is explained.... if not excused.

  • Comment number 4.

    there is one benefit cut that the Chancellor didn't announce yesterday but the Treasury have confirmed this morning, cutting the winter fuel payments. By £50 for the people aged 60-80 and by £100 for the over 80s. "All in this together"? I think not.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 6.

    It is obvious to anyone with half a brain cell that Osbourne & co. are simply following the obvious and well-worn method of UK governments of all persuasions in order to maximise their chances of getting re-elected next time.

    Cut deeply in years 1, 2, and 3 of a parliament, then bribe, or increase spending, in years 4 and 5. If you are a Tory you cut via mainly spending cuts and you bribe with tax cuts. If you are Labour (or Lib Dem, until recently) you cut via tax hikes and you bribe with spending hikes.

    This time, however, George has two added dimensions to consider: (i) that the UK had just having come out of a very deep recession and (ii) that he is in coalition

    George surely must know that his sharp, deep cuts will depress growth such that the UK heads back into recession. With inflation anywhere near 4% its unlikely that the Bank of England will help out via more money printing. The Lib Dems are onside for now, but once they do not need the Tories for their AV referendum its likely that the Lib Dems will gradually seek to withdraw from the coalition - after all many of its policies (on the NHS as well as on the cuts) are the diametric opposite of what Lib Dem supporters want, or believe in.

    All in all, every day George is looking ever more like a schoolboy who has lost his homework and is praying for the god of history prep (a.k.a. the global economy) to provide him with a new one before sir (a.k.a. the electorate) finds out. After the next set of UK GDP numbers, i.e. those for the 1st quarter of 2011, come in on the low side of expectations (which have already been managed down) George will be forced to begin to contemplate a grim reality:

    He, Gideon George, was and is wrong, and if he doesn't change course very quickly or resign so that someone like Kenneth Clarke can do a proper job, it will be the UK that needs the EU and or IMF to bail us out...

  • Comment number 7.

    "No wonder Labour are gambling on it all going wrong."

    If that is indeed what they are thinking, what a sad and sorry reflection on them.

    Should they not be hoping that, even if they don't agree with what's happening, that it all goes right? It's a bit like someone sulking because they aren't allowed to drive the car they're in and so they hope it crashes.

    Moving on, I heard Balls on the radio this morning. It was being spoken by Ed Balls. He really has got that "fingers in the ears, la-la-la" deficit denying off to a tee now, hasn't he?

  • Comment number 8.

    Yes it is the end of the beginning, the end of the phoney civil war and the real stuff is just at the start. This is entirely the government's own making in the choices they have exercised and they will have to face the consequences and that the only opposition left will be opposing them with vigour. Watch for the local election results and the new situation if the Lib Dems are massacred and the down side of localism when the NHS and council cuts are posted on a weekly basis. Exciting times.

  • Comment number 9.

    Like many other accounting firms, it's the post-budget conference for me today. Having analysed things over-night, it's a good budget for those in business, which is good for all of us in the long run.

  • Comment number 10.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 11.

    #9 Not so great for those in the oil business, though, and definitely not good for those in the travel business.

  • Comment number 12.

    2. At 10:01am on 24th Mar 2011, RedandYellowandGreennotBlue wrote:

    "It needn't be like this. The Tories could slow down this drasticically fast cut in everything. There isn't going to be a couple of burly debt collectors turning up at 11 Downing Street in 2014/15."

    Whenever I read people expressing similar thoughts to these, I feel it becomes patently obvious that you have no concept of quite the scale of debt being dealt with here.

    Do you realise that even with these 'drastically fast cuts' (as you put it), we still have to borrow money to make up the difference we spend for the next 4 years? Do you not consciously understand that the entire program of cuts will not even begin to pay off our national debt; in fact the national debt will continue to increase throughout? I really don't know how you can comprehend these facts, and still argue that we should cut more slowly.

    Your comment about the debt collectors displays a terrible misunderstanding of the problem of debt. It isn't collectors that are the problem; it's the supply of credit. If we struggle to obtain credit, things would have to be cut overnight, let alone over the course of 5 years. Every year we have to enter the bonds markets and try to raise the cash we need to fund our spending. If we don't sell enough bonds, we don't have the money to spend. If we can't raise the debt capital, we can't spend it at all.

    Confidence is king in these markets. If investors are worried about our ability to service our debts, then they charge a higher risk premium on their capital, which raises interest rates, which means even more has to be cut because a greater proportion of the deficit is going towards interest payments.

    Showing a measure of fiscal responsibility is crucial to any recovery, as we are a nation that lives on borrowed money. Like it or not, the economic recovery relied on the Conservatives being in power (at least in some executive capacity, as the markets showed on election night), and it further relies on them acting appropriately towards a ridiculous deficit.

    Please, stop being naive.

  • Comment number 13.

    At 10:35am on 24th Mar 2011, You wrote:
    '7. At 10:12am on 24th Mar 2011, AndyC555
    "No wonder Labour are gambling on it all going wrong."

    It's a bit like someone sulking because they aren't allowed to drive the car they're in and so they hope it crashes.'

    As eloquent an analogy as one could hope for. More potent considering the number who have journeyed through the windscreen before, don't seem to have come out of the experience looking too good... yet still seem eager to repeat the process.

    ps: Am I to presume that with the ongoing 'improvements' being imposed hither and thither, basic HTML is out of the window along with the bathwater? It still shows in preview but not posting.

    pps: Attempt #2 - the irony of this, in lurid pink, after the ps above is not lost: 'We're having some problems posting your comment at the moment. Sorry. We're doing our best to fix it.'

  • Comment number 14.

    #2 redyellowgreennotblue wrote:

    "The Tories could slow down this drasticically fast cut in everything. There isn't going to be a couple of burly debt collectors turning up at 11 Downing Street in 2014/15. It took many years to get us into debt, why try and get rid of it in such a short space of time?"

    Let me try to put this correctly.

    The Government is increasing the National Debt (by an average of over 100 billion per year) throughout the Parliament, not decreasing it.

    They are trying to reduce and then eliminate the annual deficit (primarily the structural deficit) so that the amount the debt is increasing at a slower rate than it would have done otherwise.

    The National Debt itself will not start to be repaid until 2016 and beyond.

    So is 5-6 years too fast to eliminate the deficit? That is the political and economic debate.

    Reducing the National Debt to say 40% of GDP (the proportion that Brown/Balls thought was sustainable) will take until 2030-2040. So 20-30 years. Still too fast for Labour?

    The 'burly debt collectors' you mentioned would actually represent the increase in the market interest rate paid by UK taxpayers on the UK's debt.

  • Comment number 15.

    Yes, pretty disastrous.

    Issues like the mass redundancies, break up of the NHS, collapse of social care for the elderly etc etc are important but I don't think they are make or break for Bertie Wooster.

    Don't forget, many of the people who support him are pleased to see the destruction of the public sector and for people like that, demonstrations are just a sign their plans are working.

    I think make or break for Bertie is his constant failed promises of growth in his beloved private sector.

    If growth continues to collapse, unemployment continues to grow, the businessmen who fund him have no customers, then eventually the penny will drop and people who matter to the tories will begin to ask questions.

    How long can Bertie Wooster survive a steadily worsening melt down of the economy is the big question.

  • Comment number 16.

    Ok Mr Osborne, I used the calculator, and have found I am some 400 pound worse off under you. You want Middle England like me to vote for you. It simply won't happen!

    I also worked out from the calculator if I was considerably richer, the effect on me is negligible.

    The cuts are too fast and are damaging the economy.

    What I want to know is both Labour and Liberals agreed on a slower pace of cuts? Why have the Liberals gone back on this.

    I for one on May the 5th intend to vote tactically to keep Liberals and Tories OUT!

    They simply cannot Govern!

  • Comment number 17.

    "2. At 10:01am on 24th Mar 2011, RedandYellowandGreennotBlue wrote:
    It needn't be like this. The Tories could slow down this drasticically fast cut in everything. There isn't going to be a couple of burly debt collectors turning up at 11 Downing Street in 2014/15. It took many years to get us into debt, why try and get rid of it in such a short space of time?"

    Exactly.

    The Tories have been disingenious in comparing us to Portugal and Greece.

    We are not a basket case. We have debts but we also have a huge Asset base. WE also have a hell of a lot of money to recoup from the banks.


  • Comment number 18.

    7. At 10:12am on 24th Mar 2011, AndyC555 wrote:
    "No wonder Labour are gambling on it all going wrong."

    If that is indeed what they are thinking, what a sad and sorry reflection on them.
    ==============================

    As you may have guessed, that's what I'm hoping for.

    I think the big difference between people like us and the tories is that we are only hoping for disaster, the tories are actually causing a disaster.

    I know which is more sad and sorry.


    ( Re. #9. Any predictions for the 1st quarter growth figures? If the budget is so good can we expect some startling high growth - no snow for a while now.)

  • Comment number 19.

    #6 nondom wrote:
    "George surely must know that his sharp, deep cuts will depress growth such that the UK heads back into recession."

    This is possible, though not the consensus opinion amongst financial forecasters.

    I also pointed out above that the coalition are still borrowing heavily throughout this Parliament.

    The argument, which I've made and quoted before, is that fiscal consolidation (i.e. deficit reduction, as we call it here) is not in opposition to economic growth, but is essential to it.

    "Fiscal consolidation has positive long-term effects on key macroeconomic aggregates such as output and consumption, notably when the resulting improvement in the budgetary position is used to lower distortionary taxes.

    "In contrast to the traditional Keynesian view, the tightening of fiscal spending can stimulate economic activity in the short run."

    Source: European Central Bank, 'Fiscal Consolidation in the Euro Area: Long-term benefits and short-term costs.'

    The reduction in domestic demand caused by the need to service a national debt of over 1 trillion pounds, and to partially repay it, will act as a drag on economic growth for decades to come.

  • Comment number 20.

    "12. At 10:37am on 24th Mar 2011, Marnip wrote:

    Whenever I read people expressing similar thoughts to these, I feel it becomes patently obvious that you have no concept of quite the scale of debt being dealt with here."

    I don't think YOU understand the basics of how to manage fianances.

    When you have a debt, you try and pay it off in managaeble chunks.

    What the Tories are doing is throwing the baby out with the bath water.

    It simply is NOT working.

  • Comment number 21.

    Also by Marnip:

    "The 'burly debt collectors' you mentioned would actually represent the increase in the market interest rate paid by UK taxpayers on the UK's debt."

    You haven't factored in growth.

    Faster Growth means you pay it back faster. The Tories have stiffled growth and destroyed consumer confidence.

  • Comment number 22.

    #15 jon123uk wrote:
    "If growth continues to collapse"

    The economy is growing not contracting.

    Economic forecasters are also expecting the economy to grow not contract. They may be right or wrong, the economy may grow more or less than their central projection.

    Of course it's possible to argue that the economy would have grown more, or less, with alternative economic policies.

  • Comment number 23.

    £2billion taken in tax off the oil and gas companies, but wait there are no oil companies in England, Wales or Northern Ireland just Scotland so that will be £2billion out of the Scottish economy then. As Scotland voted overwhelming against the Tories this is a hard one to swallow given that they have no mandate from the people of Scotland and how much people in the Highland are suffering with high fuel cost. I feel this action could be a huge boost to the SNP going into the Scottish election as if Scotland where independent we could have 50p off the price of a litre instead of just 5.

  • Comment number 24.

    15. At 10:39am on 24th Mar 2011, jon112dk wrote:

    "How long can Bertie Wooster survive a steadily worsening melt down of the economy is the big question."

    Labour lasted 10 years, so I think we've got a while. I wonder, if the economy began to improve, would you credit George Osborne and David Cameron, or would you try to put it down to, I don't know, good luck?

    Would you have the decency to give them the credit they deserve if they prove worthy of it over the next 4 years, or would you simply find something different to criticise them over? We should hold a poll to predict how you'd react...

  • Comment number 25.

    "Do you realise that even with these 'drastically fast cuts' (as you put it), we still have to borrow money to make up the difference we spend for the next 4 years? Do you not consciously understand that the entire program of cuts will not even begin to pay off our national debt; in fact the national debt will continue to increase throughout? I really don't know how you can comprehend these facts, and still argue that we should cut more slowly."

    Ah, Marnip, a voice of sanity amongst all the tub thumpers. At long last. None so blind as those whose vision is blinded by pathalogical hatred or youthful naivety.

  • Comment number 26.

    "11. At 10:25am on 24th Mar 2011, RedandYellowandGreennotBlue wrote:
    #9 Not so great for those in the oil business, though, and definitely not good for those in the travel business."

    Confess that I'm not sure about the travel business but the oil business is big enough and diverse enough to shrug it off.

    I think the difference with business now is that they know that the coalition don't want these taxes at these levels for ever. It's while the UK finances are brought under control. Under Labour, they knew that Labour's aim was to keep ratcheting taxes up to the maximum under which their businesses could still just about survive. Not very motivational that, so why bother to invest?

  • Comment number 27.

    17

    Has Mr Whelan got you on piece work?

  • Comment number 28.

    Labour have been gambling for fourteen reckless years.

    First with our money in government, over one hundred useless tax rises, selling our gold, loading us up with expensive PFI, expensive and reckless warmongering without UN authority and now still gambling in opposition.

    'Gamble' is all the labour party know what to do. They deserve to be in oppposition and even appear to be enjoying the thrill of complete irresponsibility about the deficit. Good luck on returning to power.

    I don't see how labour's case will be helped if there is a bailout of Portugal? All that would do is reinforce the view that reckless gambling leads you straight into debtors' gaol. If that's where the labour party wants the country to end up then I suggest they start talking about how much they'd spend to make sure our stay in gaol was nice and comfortable because we'll be there for a very long time.

    The labour party have well and truly boxed themselves in. They don't believe in deficit reduction yet they accept the need for cuts. They can't say what they would cut and indeed have plans to spend more to 'support the economy'. It's looking like the most incoherent bunch of policies since the Weimar Republic.

    There is nothing new in this strategy; the left has constantly held out the begging bowl since its early beginnings and as a result is an unsightly combination of talented fool meets lazy jobsworth. They spent money wastefully (in marked contradiction to all sagamix's bleatings about the government being better spenders than the private sector) and they come grovelling back for a second chance.

    Labour are a pitiful sight and have no shame. The chuckle brothers who 'had front row seats' at the newlabour party now pretending they actually have a clue what to do with the economy is beyond credible.

    And at the heart of it all they know they have no option but to sit and wait and hope it all goes wrong while carping 'I told you so'. What a dismal bunch they are.

    it's grim up north London...

  • Comment number 29.

    All this talk about fuel for transport, while important, does not tackle the serious issue that many rural communties have with the price of fuel for heating.

  • Comment number 30.

    23#

    Considering most of the oil companies are multinationals, how do you work that out?

  • Comment number 31.

    "No wonder Labour are gambling on it all going wrong."

    That would imply that they (Labour) have some understanding on economic matters.

    Both Ed's wimperings show that they simply do not get it.

  • Comment number 32.

    23#

    And not to mention, if you were independent, you'd have an awful lot more other things to have to fund as well. The SNP were up in arms about the possible loses of Kinloss, Lossiemouth or Leuchars. Thats not even the half of it if you get independence.

    That black gold isnt going to pay for all of the SNP's wish lists in perpetuity you know....

  • Comment number 33.

    18. At 10:47am on 24th Mar 2011, jon112dk wrote:
    7. At 10:12am on 24th Mar 2011, AndyC555 wrote:
    "No wonder Labour are gambling on it all going wrong."

    If that is indeed what they are thinking, what a sad and sorry reflection on them.
    ==============================

    As you may have guessed, that's what I'm hoping for.


    ---------------------------------------------------------------------

    That's why no one takes you seriously, even those who find the Tories as objectionable as you do.

  • Comment number 34.

    There's a lot of things that need spending on in the UK, and sure, it must be a nightmare having to pull a rabbit out of the hat to help these, help those, please everyone as Chancellor...but it seems that Mr Osborne, as clever as he is, has either deliberately left out, missed or forgotten one of the biggest undertakings as Chancellor - you not only have to look at all the income, but ALL the expenses.
    If the Government can not afford to waste money, let alone throw it away, why is around £50m per day religiously given to the E.U.?

    Whether it costs 3 or 5 billion pounds to pull the UK out of membership to the E.U., the long term saving can be justified. Trade can certainly continue with E.U. countries, just like other non-E.U. member countries do.

    Just think of what the Government could spend on with £50m per day over 5 years?
    National debt perhaps/
    Hospitals, prisons, schools perhaps?
    How about forces and resources?
    What about infrastructure and power?
    Would the cut backs need to be so drastic so soon after recession?
    And so on, and so on.

    I'm practically a peasant, quite uneducated and use one finger to type this! But even by my maths, I think Mr Osborne could have done so much more for his country when it truly needed him.

  • Comment number 35.

    It is interest ing to note that a journalist's comment on a party's attitude can be accepted so readily as what that attitude may really be! Judging from Darlings very carefully considered comments on the Today Programme this morning, it would appear that all responsible politicians are very worried about the economic situation. Certainly there does not appear among them a hope that the budget will fail, although, sadly, because the budget was so blatantly fashioned to further Tory political ambitions it could well fail.

  • Comment number 36.

    18 "As you may have guessed, that's what I'm hoping for."

    No kidding.

    I'd ask why, since you've not made a single alternative positive suggestion but truth is, you're boring and I've no interest in what you think.

    Will you still be contributing to this BB next year as the economy picks up? Or will you be off sulking on your own?

  • Comment number 37.

    "16. At 10:44am on 24th Mar 2011, ToriesBrokeBritain wrote:
    Ok Mr Osborne, I used the calculator, and have found I am some 400 pound worse off under you."

    What did you expect? You think Labour would be showering you with tax cuts if they were in power? They couldn't do that during boom times, just think what they'd do to taxes now.

    So what are you going to do about it? I'm aiming to earn more to off-set any tax rises.

  • Comment number 38.

    20. At 10:48am on 24th Mar 2011, ToriesBrokeBritain wrote:

    "I don't think YOU understand the basics of how to manage fianances."

    Can't wait to hear your argument.

    "When you have a debt, you try and pay it off in managaeble chunks."

    We haven't even started to pay off any debt. Not a single penny of these cuts even starts to cut the debt - they cut the *deficit*. I would suggest it may be you who doesn't understand even the fundamental terminology involved.

    "It simply is NOT working."

    The markets disagree. But then again, you're always likely to come to a different conclusion when you don't understand the difference between cutting a deficit, and paying off a debt. Ho hum.

  • Comment number 39.

    Both my comments sent off to the investigations team. I must be evil and never knew it!

  • Comment number 40.

    25. At 11:04am on 24th Mar 2011, Fubar_Saunders wrote:

    "Ah, Marnip, a voice of sanity amongst all the tub thumpers. At long last. None so blind as those whose vision is blinded by pathalogical hatred or youthful naivety."

    I am much obliged for the kind words, sir. I must confess however, in the interests of internet honesty - I'm not that old myself. But hopefully without the naivety.

  • Comment number 41.

    marnip...

    couldn't agree more with your analysis. The left just refuses to accept the shocking state of the national finances and the fact that we have an enormous defict for the whole of this parliament even under the coalition plans.

    They also refuse to accpet the fact that public spending is actually rising over the next four years but it should start to fall as a percentage of GDP.

    And finally, given the the left is constantly reminding us of its intellectual superiority the sad fact is that Ed Balls knows all of this to be true and so is being completely disingenouous about the cuts everytime he opens his mouth. Nice place to be, Ed.

    It's grim up north London...

  • Comment number 42.

    In amongst all the business friendly stuff was the proposal to combine NI and income tax. Why? This particular statement is hedged about by all sorts of caveats: it's complicated, it will require a lot of work, it will take a very long time etc. Besides the implication that now the NI component of this new tax regime will be paid by every taxpayer does this mean the disappearance of the Social Fund into the black hole that is the treasury? We should be told, or is this asking too much? It's all rather Gordon Brownish, promising jam in the very distant tomorrow for some special interest group. Not a comparison GO was looking for I think.

  • Comment number 43.

    Anyway.

    To get back on topic, instead of the usual shroud waving and howling...

    Nick, you raise some good points.

    "If the world oil price continues to soar, Portugal has to be bailed out and hundreds of thousands take to the streets this Saturday to protest the chancellor's problems will only just have begun."

    Arguably so, depending on what part, if any we play in the Portugese bailout, considering the last lot committed us under Lisbon to have to dip our hands in our pockets regardless of whether we are in the Euro or not... and the current administration shows absolutely no signs of taking any interest in doing anything about that. So far as the union-rent-a-mob and the usual sink estate and rebellious middle-class student suspects who will be turning up for a ding-dong with the old Bill in Whitehall at the weekend are concerned, if they truly think their little day out is going to change anything (either by accident or design), then they're out of their tiny minds. A million people on the street didnt stop the Iraq war. This is going to be equally ineffective, but will give the headline writers a week's worth of raw material telling you how you're all doomed and the end is nigh unless you watch their rolling 24 hour coverage or buy their newspapers... Yawn.

    "Osborne had to strain every sinew simply to limit and postpone tax rises on fuel rather than to scrap them altogether. In six months time he may face demands to do it all again. Added to that there will, no doubt, be calls to stop closures of hospitals, libraries, Sure Start or to reverse other tax rises and benefit cuts or to help this or that industry."

    Indeed, there may well be. And, as I've said to you before Nick, just because the turkeys dont want Christmas to come doesnt mean that Christmas isnt going to come anyway. You can either accept it, that something has to be done and the medicine is going to taste foul, or you can wait til you've been plucked with your legs in the air, wrapped in bacofoil and in the oven for three hours at gas mark 6. Your choice, people. I think I'd rather take the medicine now and get it over and done with.

    "So far much of the talk about spending cuts, benefit curbs and tax rises has been just that - talk. People will really begin to notice the Treasury squeeze at the beginning of the new financial year on 6 April when many of the changes kick in. In the weeks and months after that the spending cuts will begin to be felt."

    Indeed that is the case. All the shroud waving and doom mongering and it hasnt even started yet. A vested interest and media led phony war.

    "No wonder the chancellor's sounding sober"

    Right to be as well. The coming twelve months is going to be a test of leadership like no politician has seen for thirty years. And, unfortunately, I still have my very serious misgivings that the current crop are up to the job. What we will end up seeing, and I'd be tempted to stake my mortgage on it, is a re-run of 1973-79 all over again.

    And we all know how that ended, dont we? Y'all should have thought an awful lot more about where you put your ticks in the boxes last year....

  • Comment number 44.

    What short memories some folk have. Regarding benefits, I am someone who currently works in the Labours dreadful 'Flexible New Deal' and its far from that. When I see someone who hasnt worked since their arrival in the UK, claims over £500 A WEEK in various benefits, how on earth are they going to find a job?

    The budget should have gone further in cutting benefits and get some of our lazy youth off their rears and into work. There ARE jobs out there, but the majority are too lazy to apply for them or think its beneath them.

    As for Labour, well, they should keep their lips firmly shut as they would have been doing the same thing after over spending for many years. Its their fault that the country is in such a mess and remember the saying, short term pain for long term gain

  • Comment number 45.

    21. At 10:50am on 24th Mar 2011, ToriesBrokeBritain wrote:

    "The 'burly debt collectors' you mentioned would actually represent the increase in the market interest rate paid by UK taxpayers on the UK's debt."

    You haven't factored in growth.

    Faster Growth means you pay it back faster. The Tories have stiffled growth and destroyed consumer confidence.

    ----------------------------------------------------------------------

    First off, I didn't say what you quoted; mistaken identity I'm afraid.

    As for Tories stifling confidence, no, I think you'll find debt does that. Confidence is actually an area I've been involved with in economics, and you'll find economic sentiment indicator is at its highest point since August last year. But why let facts ruin a good story, eh?

  • Comment number 46.

    22. At 10:54am on 24th Mar 2011, johnharris66 wrote:
    #15 jon123uk wrote:
    "If growth continues to collapse"

    The economy is growing not contracting.
    Economic forecasters are also expecting the economy to grow not contract. They may be right or wrong, the economy may grow more or less than their central projection.
    ======================

    I said growth has collapsed:

    2010 Q2: 1.2%
    2010 Q3: 0.7%
    2010 Q4: 0% (-0.6%)

    Wooster's own OBR is now predicting growth of 1.7% in a whole year - and that's before they 'revise' the figure again in response to reality.

    I'm happy to call that a collapse in growth.

  • Comment number 47.

    That black gold isnt going to pay for all of the SNP's wish lists in perpetuity you know....
    -------------------------------------------------------------
    Maybe not but it provides more than enough for Gideon to give a cracking Mary Antoinette, impression only instead of let them eat cake its let them drive about.

    @ 30 Why would multinational Oil companies even be in the UK if there wasn’t oil in Scottish waters? Also given how the Tories are reforming tax these companies will soon only being paying tax on oil from Scotland at this point I fear the Burden of Supporting England may be too much to bear.

  • Comment number 48.

    rockRobin7 @41:

    That's an interesting point about Balls actually - do you really think he's being disingenuous? The impression I get is that he's actually just incompetent and lives in a world of his own; I think he honestly believes it.

    Miliband however smacks to me of a disingenuous man. Not quite as stupid as Balls, but equally incompetent.

    Just my impressions of them, I don't know what everyone else feels...?

  • Comment number 49.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 50.

    Cutting the winter fuel allowance will save more money than just the headline cut as, particularly if we have another harsh winter. More of our poorer elderly people die earlier from cold or just the stress of finding the money for their heating bills, reducing overall pensions payments and social care costs. It won't particularly affect wealthy elderly, of course, who are more likely to vote Con-Dem.

  • Comment number 51.

    #33, #36

    Tetchy, tetchy.

    It's a strange old thing. You boys can be gleeful over thousands of people losing their jobs because you hate the public sector and it's destruction is in your own personal best interests. But, strangely, you don't understand the same attitude when it is applied to your world by others.

    The tories have made it very clear that regardless of the performance of the disunited kingdom economy some of us can expect no benefit - we are not stakeholders any more.

    From my perspective the best outcome is tory failure and their removal from office.

    Surely you can understand people looking at things out of personal interest can't you?


    (Andy - you haven't said whether you think the Q1 growth figures will be stunning us.)

  • Comment number 52.

    Andy C555

    Perhaps those on the left would like to put some numbers on their nebulous statement 'too far too fast' about the cuts.

    How fast and how far are they prepared to go? Why? Why do we need an even bigger welfare, NHS and education budget when they weren't able to deliver reforms with the old budgets?

    'Too far and too fast' is already beginning to sound as meaningless as all the other labour catch phrases that we rejected at the polls a year ago.

    Education, education, education.
    24 hours to save the NHS
    Tough on crime tough on the causes of crime

    None of these gave us anything except bigger bills and worse productivity.

    Now they give us 'too far, too fast' - the left is and always has been all mouth and trousers. Full of high minded yet useless rhetoric. Can we have some policies please?

    It's a great time to be a tory....

  • Comment number 53.

    For the third time - edited.

    Growth down, unemployment up, consumer confidence at records lows and all this before the real stuff hits. A budget for growth that led to growth being downgraded.

    Osborne is simply not up to the job.

    And labour gambling on failure? Not sure the odds will be worth a punt.

  • Comment number 54.

    Are you sure that todays headlines are what he wanted? Just returned from a trip to the newsagents and I wouldn't say that they are a ringing endorsement of his decisions.

    I could be back at Uni in the 80's, enterprise zones, rising inflation, decreasing growth forecasts, unemployment that kept rising and rising and rising. G Howe and MT saying we will stick to our plans and they did, to be fair, for 3 years or so even though inflation went up to the mid 20's and interest rates into the teens. Then followed huge public protests and a war and then a hasty backtrack leading to a couple of cycles of boom and bust and the poll tax.

    I know I shouldn' find this funny but, black humour in a crisis is good for the soul, everytime Osbourne says something the opposite happens. This is a budget for growth -OBR downgrades growth forecasts; the economy is out of the danger zone, OBR downgrades growth forecasts; We are on the way to revcovery OBR raises forecast on the number of people to be unemployed. Maybe if he kept quiet things might get better......

    In terms of the politics Osbourne is just hoping it will all come right. He and DC can bang on all they like about Labour's deficit but we have had two budgets now and the economic figures are getting worse. Soon the arguement will turn to OK the deficit is here but have you made the right choices to sort it out. We are 4 years away from a general election -the economy will have to start to turn soon if it doesn't then a U turn will happen. The question in my mind is if there is a U turn will it be too little too late.

  • Comment number 55.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 56.

    43 Fubar_Saunders

    The Portugal situation is very worrying. After the Ireland bail out the EU got together and agreed measures so this could not happen again. In the UK we are chewing over the Budget but on the continent they are ust about tearing their hair out.

    I fear Spain is next but the one common feature in the Iberia peninsula is very high unemployment (over 20 percent) rate that has lingered for far too long. Why the respective governments have not tackled this issue head on and how the EU Commissioners can overlook this scar on the landscape beats me. Considering the President of the EU Commission is a former PM/President of Portugal, you would think he might have a more caring attitude to his fellow compatriots.

  • Comment number 57.

    I feel the need to post some comprehensive confidence figures so we're not all simply extrapolating our personal feelings out to the rest of the economy. This is the Economic Sentiment Indicator, produced by the EU Commission. It takes into account various sectors of the economy, and reports in index form the state of current sentiments/confidence, and expectations for the future.

    Notable points from February's results:

    - UK ESI value highest since August last year, and higher than a few of the months before that.
    - Our expected employment figures for the services sector are at their highest for more than a year, and even outstrip the average measured since 1990 considerably.
    - Consumer confidence is considerably low, yet it still fails to produce an overall low value of the composite ESI for the UK. It's actually higher than the average.
    - Export expectations for the manufacturing sector over the next 3 months have rocketed, which really should tell you that domestic demand is not the be all-end all.
    - Production expectations are up at a high too

    I could say plenty more, but have a look yourself:

    http://ec.europa.eu/economy_finance/db_indicators/surveys/documents/2011/bcs_2011_02_en.pdf

  • Comment number 58.

    @Marnip - Yep. Agree.

  • Comment number 59.

    M last attempt was removed, I think, because a made a reference in French to a prominent French politician's relation in ambition to a prominent British politician - at the removed comment's end. This comment, otherwise anodyne, in sum simply stated that all the factors potentially adversely Osbourne"s budgetary intents are many and diverse ranging from those affecting fuel price through the Portugese difficulties through to a possibly protracted Libyan conflict. I apologise for causing moderator frisson and angst

  • Comment number 60.

    This was not a budget for business...it was a budget for big business, as small companies don't get a tax cut...only big ones.
    As for R&D tax credits the scheme is silly. It defines development as original ideas. Why doesnt anyone in the government understand that development in successful companies is fast moving (products designed and in production in 6 months) and its immediate. Its about getting the product out there making money. But this kind of development is not covered by R&D credit as not being original?
    This is the real world...this is what competitive companies do in R&D to get to manufacturer and most importantly to get fast revenues.
    R&D that requires original patents and science is important, but its takes years and while you're doing it someone in china or the USA is making a real business out of technology that is hear now.
    R&D tax credit is giving money to long term non-profit making activities.

    We need to learn from the USA and from China...invest in R&D for new products, not just pie in the sky science.

  • Comment number 61.

    44 jigglybean

    What a motivating person you are. Do you have your own collection of pens?. Lets hope you aren't made redundant. One of you clients may not be what he seems.

    "short term pain for Long term gain."

    Thats an old chestnut is from the 1980-90s isn't it? Which was long term pain for even more long term pain(for many people outside London and the midlands). We're not there yet, just another 4/5 years maybe. Which gave us a debt of neglected infrastructure leading to the famine/feast/famine situation we're in now. Now doubt they'll try to drag out the pain to stay in power again while blaming the previous government.

  • Comment number 62.

    Oh and while our primeminister says our future is small companies and export would they like to look at the new weee regulations that require you to register in every EU member state individually (paying thousands for each) before you can legally distance sell to them? Some of the countries won't even let you register unless you are based there.
    So common market? You have a product, it meets all the approvals, and you want to sell a few direct...but you can't.
    This is what happens when you have EU officials with big business lobbiests (who have the scale to have distribution and offices in all member countries).

  • Comment number 63.

    Mr Osbourne got the headlines he wanted. The rest of it had been leaked over the previous days to get more good news headlines. That sometimes seems to be all that politicians care about.
    Tax avoidance and evasion is at least 10 times the small amount the Chancellor says he intends to raise by crack downs. Why are they laying off tax officials?
    Public sector pensions are a problem. Why then aren't MP's giving up their twice as good as the rest pensions and moving to a defined contributions scheme now?
    £2,000 from someone on £100,000 is much less significant than £200 from someone on £10,000
    (Labour and the Liberals if they were in power would also be making deep cuts)
    But the Chancellor and Conservative Party have their headlines...
    Doesn't matter to them what happens to the rest of us.

  • Comment number 64.

    54. At 11:44am on 24th Mar 2011, wirralwesleyan wrote:

    "I could be back at Uni in the 80's, enterprise zones, rising inflation, decreasing growth forecasts, unemployment that kept rising and rising and rising."

    As I said in my previous post, people have got to stop making up the things they say. Inflation is rising in a way outside our control, so it is not the 80's inflation.

    Growth forecasts are almost always revised down; it only becomes a problem when there's a significant drop and growth becomes negative. Growth creates its own growth (and confidence), so any growth is a good thing. It has a habit of spiralling.

    As for unemployment, the figures are forecasted to go up, yet for some reason, the manufacturing, services and construction sectors all show improving expectations of employment over the next few months. Only consumers (who as you can tell by looking at these message boards, aren't always the most analytical nor well informed sector) see things particularly badly, and the retail sector is very modestly negative.

    There's a lot of good signs going around at the moment, and few of them are reported or even discussed. Or even known about - how many people were aware the EU produces such a comprehensive survey every month without it being posted?

  • Comment number 65.

    All this user's posts have been removed.Why?

  • Comment number 66.

    Another Tax on Scotland's North Sea jobs to pay for Chelsea's Tractors.
    Slainte Mhor

  • Comment number 67.

    56#

    Portugese PM has fallen on his sword, I understand. Whilst its all going off out here in sunny Brussels (rocks, water cannon, etc), the FT has something in its Brussels blog about the stabilisation fund and the draft conclusions for this summit... the usual tantamount to the most important aspects being kicked into the medium grass, no major decisions due before June 2011.

    Difference between the PIIGS and the rest of the EU is the nature of their economies, which were largely, but not exclusively (particularly Italy and Spain) rural before the EU/Eurozone borrowing splurge. It may have helped to set some of the pieces in place for diversifying their economies, but the one thing it didnt do was change the national political and business mindsets, let alone put in place the supporting apparatus that has evolved in the rest of Northern Europe over two centuries. The two are worlds apart and always have been.

  • Comment number 68.

    The business freindly measures do appear to benefit big business rather than small business - the VAT exemption for things from the channel islands is still there. We could, bearing in mind the fall of dictators in the world, at least try to close down some of the 30 odd tax havens under our control, and not let them be used by crooks and criminals and big business to avoid paying their fair share, and to stop people hiding the stolen money in them. Maybe the problem is that so many of those in power right now are personally seriously rich and have no understanding about what it is like for the rest of us. It might account for the half hearted way that IDS's reforms are being implemented. For a rich man, 50% tax is too much, and must be reduced, yet for someone at the bottom, they should be grateful for 30P extra from each pound - a 70% rate.
    On the bright side for the Conservative dominated coalition, there will a fair amount of money from selling the banks off for a big giveaway just before the next election.

  • Comment number 69.

    "Thats an old chestnut is from the 1980-90s isn't it? Which was long term pain for even more long term pain(for many people outside London and the midlands). We're not there yet, just another 4/5 years maybe. Which gave us a debt of neglected infrastructure leading to the famine/feast/famine situation we're in now. Now doubt they'll try to drag out the pain to stay in power again while blaming the previous government."

    What? You've still got neglected infrastructure in the frozen north? After thirteen years of bountiful largesse? Or wasnt thirteen years long enough to put right the sins of the previous government? Wasnt it all Thatch's fault? Was it? ;o)

  • Comment number 70.

    "Why are they laying off tax officials?"

    Two reasons I would speculate at. One, they're probably being outsourced, everything else is and two, the department is not fit for purpose.

  • Comment number 71.

    I'm a simple sort of bloke, so I didn't expect this budget to be any more than a "holding" exercise...
    I'd certainly like to see a lot more "rationalisation" of the incredibly complex tax and credit schemes that Brown, Balls et al seemed to believe were a good thing.
    Also like to see more alleviation of tax from those on lower income, to recover from that stupid (Brown) decision to withdraw the 10p tax band.

    We know that a Labour adminsitration would have slashed away at spending - Darling said he would be more savage than anything Thatcher ever did. BUT nobody from the last government ever suggested where the cuts would have fallen. That, for me, was a grave mistake during the election campaign.
    Arguably, Labour can now say "We wouldn't have done that", but, since they didn't indicate what they WOULD have done, it seems a rather negative position to adopt.

    Lots of things I disagree with which this administration has already decided.
    In my view, it's stupid to demolish so much of the military capability. (And plain daft to have aircraft carriers without aircraft...)
    Don't like the rapid change to the NHS (mainly because I'm not convinced that GPs are generally much cop at diagnostics, so they'll be shipping loads more folk off to hospitals for additional tests and then not actually having the management skills to judge the cost/outcome ratios of big medical decisions).

    I'd be much happier with Labour if somebody senior would admit that the so-called golden decade was actually based on a credit-bubble that would inevitably burst.

    Brown created the FSA that was either ineffective or incompetent.
    Brown said that the BofE should disregard housing costs when examining inflation.
    Brown et al allowed finance houses to shower money over people so house prices could rise (minimal increase in housing stock, maximal increase in money to purchase), so he could benefit from Stamp Duty increases...
    Brown allowed/encouraged rediculous contracts for PPP/PFI schemes that place a noose around the necks of schools and hospitals for decades.

    I don't much like any political party (although I have a dear friend who has done a lot at the local level and was a prospective Labour candidate for Westminster). I'd just like to see government treating tax income as a fragile commodity that has to be used in the wisest and most careful way to help support the public wellbeing.

    Nobody wants a low growth economy. But spending taxes to pay for people to tell each other how well - or badly - they are doing, how to play properly, how to eat and when and where to park, etc etc is the sort of unreal-growth nonsense we've endured for years.

    What I'd like to see is any legal action against the bankers, auditors and credit assessment agencies who pretended that they were all doing a good job while all around them the pillars were crumbling...

  • Comment number 72.

    I don't quite understand how the economics director of Oil and Gas UK can talk about "tens of thousands of jobs" in the industry being lost because of yesterday's windfall tax. Is he saying that without the recent large spike in oil prices then they would have had to lay tens of thousands off too?

    Secondly, good to see this morning that the head of one multinational is recommending to his board that they move their tax base to the UK from Ireland, while another one is considering it, thanks to the reduction in corporation tax. Osborne also gained more from closing tax loopholes in a single budget than Brown every did (although Labour like to talk a lot about it).

    Reading through the posts here it seems like Milli-Balls and the Labour apologists have now got denial and shifting the blame off to a fine art. To listen to them you would think that the Tories have been in power for the last decade and the state of the economy is entirely their fault. Guess what? The crisis happened under YOUR watch and so it's your responsibility. Now somebody else is having to clear the mess up. Instead of carping on about the undoubted short-term pain caused by your mess how about Balls telling us exactly what he would or wouldn't cut instead of trotting out this vague "too fast, too deep" argument? So far they seem to be happy to make promises to anybody complaining about a particular cut that they wouldn't be making them. The percentage size of our annual budget deficit is the largest amongst the G20 but to listen to Milli-Balls you'd think that we'd just had a heavy month on the credit card.

    I think there's more credibility in what the OECD had to say in their annual survey of the UK economy. "The UK economy emerged from the 2008–09 recession with elevated public and private debt and high unemployment. Strong growth and macroeconomic stability in the run–up to the crisis had hidden a build–up of significant imbalances, influenced by overreliance on debt–finance and the financial sector, and booming asset prices. These imbalances need to be addressed to ensure a sustainable and balanced recovery. The government is pursuing a necessary and wide ranging programme of fiscal consolidation and structural reforms aimed at achieving stronger growth and a rebalancing of the economy over time."

  • Comment number 73.

    Available targets to cut spending - pension relief cut to basic rate of tax. The vast majority of it goes to the top 8%. There was - may still be - a culture of giving a director a pay rise in his last year, thus boosting his pension at the expense of the company scheme. Never seemed to happen for the 98% of us working for the company where the schemes have now closed. It's all very well to say that shareholders should decide directors pay. The people who control the votes are earning similar salaries and it has to be really exorbinant for them to even suggest its OTT.
    Reduce senior salaries - my local council has 8 people on over £200,000. I can't pay them less. Mr Pickles could do something about it, but hasn't.
    Increase the number of tax officials - each one pay back his salary at least 20 fold.
    Deal with social security claims by helping them claim what they are due. Cuts down the paper and hassle.
    Someone employs illegal workers at below minimum wage - it isn't us. IF farmers need to do so to meet supermarkets pressure, go and sort out the supermarkets. In favour of raising the tax level to minimum wage level, that at least is a good idea.
    Stop companies like a mobile phone company whose name begins with V agreeing cosy tax deals with the Revenue. It's legal, says my MP, but funnily enough he has it in for people who claim the benefits they legally can. Surely there's something to be sorted out here.
    Mr Osbourne is not really trying - nor is Mr Balls. And I can't ask Vince Cable since a newspaper did that sneaky job.

  • Comment number 74.

    Putting the fuel in the British economy - I hardly think so http://bit.ly/edJ5hm
    As ever the rhetoric never lives up to the reality

  • Comment number 75.

    @57 & 64 - Marnip, thank you for bringing some sensible comments to these boards. There is a lot of good economic news appearing regularly, especially with regards to manufacturing and exports, but for some reason these rarely seem to make the headlines.

  • Comment number 76.

    It's plain that even Osbourne knows that the Q1 2011 GDP numbers will be very poor. Touch and go whether they are negative, in which case we're formally back in recession.

    Negative cycles, with poor expectations for growth leading to lower investment and lower growth, are difficult to break. Only by doing a massive U turn can the govt.
    change things for the better.

    Trouble is that would require the resignations of at least Osbourne, and it's hard to see how another general election - this time with no bull about family-friendly cuddly conservatism - could be avoided...

    If I were Clegg or Cable I'd be checking out those headhunters to see whether anyone requires a professional defender of the indefensible.

  • Comment number 77.

    #14 johnharris66

    Apologies for my perceived confusion over debt and deficit. Please replace 'burly debt collectors' with 'not-so-burly deficit collectors followed by burly debt collectors'. Is there a critical mass moment when our deficit gets too high? Maybe that's already happened. Is the growth of our economy (albeit small) enough to offset the ever-reduing amount of deficit? Amateur questions, but ones which I get the feeling the government conveniently ignores.

    #26 The travel business was kind of hoping the already too high APD would be reduced, amongst other things. I hope you're right about oil business, and that Oil and Gas UK are wrong when they say tens of thousands of jobs will be lost.

  • Comment number 78.

    #63 michellegarnd wrote:
    "Tax avoidance and evasion is at least 10 times the small amount the Chancellor says he intends to raise by crack downs."

    Whereas tax evasion can, I think, be defined, tax avoidance is in the eye of the beholder. "Tax avoidance is a meaningless concept." Discuss.

  • Comment number 79.

    "From my perspective the best outcome is tory failure and their removal from office."

    Just as well your perspective is about as meaningful as your posts then, eh jon. Maybe you should lead by your own example.

  • Comment number 80.

    Robin @ 52 wrote:
    'Too far and too fast' is already beginning to sound as meaningless as all the other labour catch phrases that we rejected at the polls a year ago.


    >>

    I wouldn't mock Labour's slogans, they won the party three consecutive elections. The Tories haven't managed to win a majority since 1992. That's nearly 20 years ago! Half the people who voted for them then are dead. And now they're behind in the polls again, suggesting that perhaps the 2010 near miss was the peak of their fortunes. No wonder you still seem so angry!

  • Comment number 81.

    50# Stuart Reader
    "More of our poorer elderly people die earlier from cold or just the stress of finding the money for their heating bills, reducing overall pensions payments and social care costs."

    Do you have evidence for this? Do you have any facts? do you have proof that links the actions of the chancellor yesterday to the premature deaths of individuals in this country in the next 12 months and that this is deliberately targetted at labour voters?

    And even if you did, who spent the money that we are now trying to claw back - yes thats right previous governments who threw the stuff away like confetti at a sham wedding or on killing people in Iraq.

    Apply some decorum please!

  • Comment number 82.

    HE doesn't have to strain every sinew - WE do.
    Are we all in this together? Of course not.
    Are we fed up with the lie about the last government getting us into this mess?
    Of course we are.
    What do we do?
    We sock it to 'em, and the appalling ConDems in the next election.
    We'll start in May.
    ACcording to 'UK Polls',the Lib Dems will lose all but three seats in the south=west (check it out for yourselves) and that's the way I'd like it to be. They disgust me

  • Comment number 83.


    ""It's a great time to be a tory.... ""

    A close personal friend, effectively a professional full time local councillor, in a supersafe Tory area, is probably about to lose his seat and his income to an independent party which is close in concept to the Monster Raving Loony Party.

    They'd never vote Labour here, and the Lib Dems have completely lost the trust of the local electorate - you may as well vote for a real Tory instead - but the votes will go to the lunatic fringe, the local equivalent of UKIP, before most people will vote Tory this year.

    It is indeed a great time to be a Tory, but perhaps not if you're facing re-election.

  • Comment number 84.

    @ jon112dk, one can only surmise that you are in the public sector given the amount of time you have to write trite, tiresome and tedious comment on here. You are probably the personification of the bone-idle public sector that the coalition seeks to remove. If not, you'd be perfectly suited to the roll. Either that or an idle-jobsworth who would be deserving of the ever-shrinking benefits available.

    The ongoing juvenile references to "Snooty" and "Bertie" serve no other purpose than to undermine what you say in the first place. That being said it's doubtful any of it has merit anyway when set against your desire for the current fiscal policy to fail, and everyone to suffer even more, simply for your own self-interest.

    The last government predicated their boom on an artificial playing field of spending money they don't have whilst having followed the scholarly economic principle of having eradicated boom and bust. I'm sure it was Thatcher (yes the one that Labour spent thirteen years blaming whilst in office) who told us you can't buck the markets.

    There are two different options here - either the one being practised by the current government or the one being espoused by the former government that got it so wrong in the first place, because they don't know anything other than spend, spend, spend. I know who I'd rather give a crack at the whip.

  • Comment number 85.

    Fuber 43

    "And we all know how that ended, dont we? Y'all should have thought an awful lot more about where you put your ticks in the boxes last year...."

    Can assure you that some of us did. Many hours without sleep worrying about it. It was a close call but still got there in the end and haven't looked backed since except maybe once or twice a day.

    Anyway, back to the budget. Did I hear correctly? Did GO actually say that in 2008 HRMC declared that £14bn was lost in Tax avoidence? Seems an awlful lot. Did he then go on to say that this will be reduced by £1bn this year and £4bn throughout the course of the parliament?

    Good to see tha GO knows he has a problem and is now doing everything in his power to reduce the £14bn (2008) by £1bn a year. Can't believe I was the only one yipeeing around before being asked politely to calm down.

  • Comment number 86.

    What can you expect from an unelected, dogmatic Government. All the cuts to the public sector are totally unnecessary. Reducing the budget deficit so quickly will keep this country in recession for a considerable period. two or three years at the very least. The only way to restore growth is start making goods the rest of the world wants. The folly of the switch to a service-based nation was plain to see when at the start of the financial meltdown in 2007. Had it not been for the decisive action of the Government of the day, we would have been in a far worse situation than the one we were in last year.

    Tax breaks for the rich, cuts in Corporation tax, etc, while those fortunate enough to still be in work are the ones feeling the real pain of this Government. "ALl in this together, don't make laugh.

  • Comment number 87.

    OK RockRobin7 @ 52

    I've tried the numbers before to answer the right-wing hysterics, but strangely no-one responds.

    Before this budget the OBR provided figures showing us deficit reduced to £35bn for 2015-16 from £156bn 2009-10. This was based on George's policies, removing the structural deficit - so £35bn is non structural.

    As the clever young whippersnapper Marnip points out we are still increasing our debt year on year.

    Now, OBR strangely dont supply us with the structural element, but IFS predicted £90bn sometime in 2009 and then said it was probably higher so lets say £100bn.

    Labour policy would have been to halve this over 4 years, compared to Tory remove it over 5 years.

    Build a little spreadsheet, run down structural deficit changes over next 5 years (we'll initially give both parties same benefit on non-structural, even though OBN predicted lower growth for Tories even before this budget).

    Difference between Tory and Labour debt build-up over 5 years - £90bn.

    But now we see growth predictions going down under Osborne (unfortunately every time he stands up to speak) so we should to be fair give Labour a little benefit for that. New figures are around £13bn more non-structural deficit each year under Tories. Oops, that appears to wipe out around £65bn of the so-called Osborne benefit.

    Now this is all fag packet stuff, but it would appear that we are talking about between zero and say £50bn of difference in debt as at 2015 (projected £1.4tn by OBR now). And by looks of things we will have George's non-structural deficit playing Labour's structural deficit at roughly the same level. You can put lipstick on a deficit - its still a deficit.

    The left and right can throw insults of deficit denier versus global crash denier at each other till the cows come home, it doesn't change the numbers. Only sensible policy making will do that - Osborne needs to find some and fast - I suggest he calls Alastair Darling for a chat.

    Labour is out of power for now, we need Cameron and Osborne to stop throwing around the dead in the water election rhetoric and realise that if it had all been Labours fault it would be a damn sight easier to get us out of this economic situation than it seems to be proving.

  • Comment number 88.

    As a new contributor to any blog I'd like to put forward some facts that seem to get lost in the midst of endless rhetoric.

    The UK came out of the financial crisis with the lowest level of debt, as a percentage of GDP, of all the leading developed countries [UK - 68.7%, US - 84.8%, Italy - 115.8%, Japan - 218.6%]. It's very convenient for political parties to make capital out of the situation. The nature of party politics made it inevitable that the previous [Labour] government would be blamed.

    The truth is that the previous government does bear some of the responsibility for presiding over an era of Banking Regulation that was too slack. No more responsibility, though, than the governments of France, US, Germany, Japan, etc. Would a Conservative Government have fared any better, the party of de-regulation. We will never know, however, I would suggest that not even the most ardent Tory would think so.

    Anyway, we are where we are and it's my opinion that the present government are severely damaging the economy by cutting too fast. I heard Norman Lamont being interviewed on the radio this morning and he said 'deficit reduction is essential for growth' in my opinion the point the government do not get is that - Growth is essential for deficit reduction.

    I don't seek to change anyone's views just to say that sometimes you have to make your own mind up about a particular issue and not just go with your party's stance.

  • Comment number 89.

    76. At 12:34pm on 24th Mar 2011, nondom wrote:

    "Negative cycles, with poor expectations for growth leading to lower investment and lower growth, are difficult to break. Only by doing a massive U turn can the govt.
    change things for the better."

    Like, instead of expanding the state, reducing its size? Like, instead of inflating a deficit, actually seek to reduce it over a period of time? Like, instead of simply providing everyone who needs a job with a job in the public sector, actually encouraging tax-paying industry to flourish as much as we can afford to?

    We made the U-turn when the Tory-led coalition got in power.

  • Comment number 90.

    Suchan104 @ 72

    Its fair enough to post in order to defend your viewpoint, but you are blatantly cherry picking.

    Why is the WPP chief utterance bang on the money, but the Oil FD isn't? Suspect because one suits your views and one doesn't.

    There's also plenty of so-called independent views of the UK economy out there, many who are currently saying the OBN view is overly optimistic, which in turn calls into question the OECD view.

    The truth is that before the budget and now after there are a raft of different views in business and in commentator land about how Osborne's policies are panning out. However its the mob he set up, the OBN, that seems to have to downgrade its growth predictions and upgrade its inflation predictions every time he opens his mouth (Budget 1, Autumn spending review, Budget 2).

    If you are a true Tory supported I would wake Ken Clarke up - he managed to more than double the UK debt, but fair play he got growth going again.

  • Comment number 91.

    Why has the BBC led with a budget story about Sir Martin Sorrell? He worked for Saatchi and Saatchi when the Conservative Party hired them, is an Advisor on Cameron's Advisory Committee, and is a longstanding Conservative Party supporter. (see http://www.ft.com/cms/s/0/09b2781e-5535-11e0-87fe-00144feab49a.html%29. The fact that the BBC has succumbed to Tory spin in such a fawning way is disappointing.

  • Comment number 92.

    Tresh @ 84 wrote:
    one can only surmise that you are in the public sector given the amount of time you have to write trite, tiresome and tedious comment on here.


    >>

    You're sounding a bit prejudiced there, Tresh - as if you think all public sector employees are workshy layabouts. We have a few ex-servicemen on this blog who would take issue with that, I'm sure. If you're going to attack somebody for puerile stereotyping, it's best to avoid it yourself, otherwise you just come across as a hypocrite.

    By the way, welcome to the blog!

  • Comment number 93.

    We are not paying off the national debt with all these cuts... so why the heck are we launching millions of pounds worth a missiles etc at Libya...? Why did D.C. promote this action. A very expensive diversion from trouble at home.. he should be ashamed of himself. The Yanks and the French could have sorted it out... but no, we have to waste millions upon millions taking a pop at a dictator, when there are so many to chose from. It is nonsense.

    Give us our money back.

  • Comment number 94.

    I will be first in line to congratulate Mr Osborne if all of this works and against all odds he manages to rescue to British economy and get it on the road to recovery in time for the next election. But I'm not holding my breath.
    As for the idea Labour are sitting back a gleefully waiting for everything to come crashing down, are you serious Nick? Do you think anybody in this country, whatever their political agenda, wants to see a bad financial situation made worse? You do Mr Milliband a great disservice with such comments.

  • Comment number 95.

    wirralwesleyan wrote:

    I could be back at Uni in the 80's, enterprise zones, rising inflation, decreasing growth forecasts, unemployment that kept rising and rising and rising. G Howe and MT saying we will stick to our plans and they did, to be fair, for 3 years or so even though inflation went up to the mid 20's and interest rates into the teens. Then followed huge public protests and a war and then a hasty backtrack leading to a couple of cycles of boom and bust and the poll tax.

    I think your memory of the 80's is blinkered - 1980 Inflation peaks at 20% mid-year. (MT had been in power 1 year), 1981 - down to 12%, The annual inflation rate remained under 5 percent throughout most of the 1980s and into the 1990s.
    I actually agreed with the Poll tax, was much fairer and a whole lot cheaper for some than the Council Tax is!

  • Comment number 96.

    77. At 12:36pm on 24th Mar 2011, RedandYellowandGreennotBlue wrote:

    "Apologies for my perceived confusion over debt and deficit. Please replace 'burly debt collectors' with 'not-so-burly deficit collectors followed by burly debt collectors'."

    Wonderful; now you've been wrong twice. Deficits aren't debts. They are the amounts we are adding to debt stocks every year. There's no such thing as a debt collector for a deficit, and you still don't seem to understand the concept.

    "Is there a critical mass moment when our deficit gets too high? Maybe that's already happened. Is the growth of our economy (albeit small) enough to offset the ever-reduing amount of deficit?"

    Simplistic nonsense. You have (albeit you probably haven't realised it) implicitly assumed that the deficit at the current level was necessary and therefore has to be replaced by growth. This just isn't the case; the amount of money that comprises the deficit that was pure waste or an overstretch of the government's role is huge. You could properly rationalise the public sector and still come out with the same level of services, just for lower costs.

    "Amateur questions, but ones which I get the feeling the government conveniently ignores."

    And ones you can't be bothered researching for yourself, preferring instead to wait for a government whom you display an irrational prejudice towards to tell you the answers - which you would then reject anyway because of the source.

    Anyone who's red, yellow and green at the same time clearly doesn't know enough to actually discern between distinct positions. It's like calling yourself Jewish, Christian, Hindu, Muslim, Scientologist, but not Buddhist. They're mutually exclusive positions, so really you just hate Tories without knowing anything. Be a big boy/girl and admit to the fact that you have no interest in contributing to the discussion.

  • Comment number 97.

    71 Fairly

    Not much for Pensioners in the budget Fairly. Thought you may have something to say on that?

    "And we all know how that ended, dont we? Y'all should have thought an awful lot more about where you put your ticks in the boxes last year...."

    Yes I meant to ask how your move to Hamstead Heath went. Glad you met up with Saga.

    "In my view, it's stupid to demolish so much of the military capability. (And plain daft to have aircraft carriers without aircraft...)"

    A real cracker that one, Fairly. A real cracker. Every time I hear it I can't help falling around like one of those old mash potatoe men.





  • Comment number 98.

    NR: 'If the world oil price continues to soar, Portugal has to be bailed out and hundreds of thousands take to the streets this Saturday to protest the chancellor's problems will only just have begun.'
    --------------------------------------------------------------------------------
    Nick, the Chancellor's problems began in the 1970's, were compounded in the 1980's, added to in 1990's and multiplied from 2000 onwards.

  • Comment number 99.

    81# notverygoodatmaths wrote:
    50# Stuart Reader
    "More of our poorer elderly people die earlier from cold or just the stress of finding the money for their heating bills, reducing overall pensions payments and social care costs."

    Do you have evidence for this? Do you have any facts?

    ===================================================================

    Yes, there's lots of evidence, try Googling 'cold elderly'. To save you time, here's a report of some research: http://news.bbc.co.uk/1/hi/health/1641665.stm

  • Comment number 100.

    86. At 12:55pm on 24th Mar 2011, Cynicall_Sid wrote:

    "What can you expect from an unelected, dogmatic Government. All the cuts to the public sector are totally unnecessary. Reducing the budget deficit so quickly will keep this country in recession for a considerable period. two or three years at the very least."

    The sky is purple. Grass is blue. Donkeys can fly. See my point? All you're doing is mindless speculation on a topic you most likely have no understanding of. Anyone can field a list of claims with no rational reason nor evidence for them.

    "The only way to restore growth is start making goods the rest of the world wants."

    Well it's a good thing manufacturing and export confidence is booming, isn't it? This is what I mean - you criticise the government, state what you think should be happening, yet are blissfully unaware that precisely that IS happening. Can you explain to me why it's so important to have your say, rather than to research your opinion?

    "Had it not been for the decisive action of the Government of the day, we would have been in a far worse situation than the one we were in last year."

    Quite correct. Yet, had it not been for the actions of the government of the 10 years prior to that - the same one you're crediting with success - there wouldn't be a gigantic deficit to neutralise. There wouldn't be an overinflated public sector. There may not have been the same pathetically incompetent regulation of the industries.

    It's like poisoning someone then giving them the antidote - if someone did that to you, you wouldn't be desperate to let them carry on.

 

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