Is George Osborne right to look confident after 'mini-Budget'?

 

"I can tell the House that we are no closer to balancing the books than when we first promised to do it. We are not on course to meet our debt target. We now need to put up taxes and cut spending until at least 2018. We're making progress. We're sticking to our Plan."

Cue Tory MPs shouting "hear, hear" as the chancellor sits down to be congratulated by the prime minister.

Those weren't, of course, his exact words in his Autumn Statement, but they do sum up his grim message.

The politics of today's mini-Budget are very curious. At a time when his critics - and Ed Balls in particular - are able to say "I told you so", George Osborne looked and sounded confident whilst the shadow chancellor looked the reverse.

Here's why the chancellor thinks he got the politics right - and why he may be wrong :

  • The chancellor hailed the fact today that the deficit is still falling and so too borrowing, contrary to most economists (and my) expectations. I'm told that Treasury officials only saw this data a little over a week ago and couldn't believe their luck. It allowed George Osborne to claim that the government is still making progress.
  • He believes that so long as the public perceive the problem with the British economy to be borrowing they will see the government's budget hawks as the solution and Labour as the problem.
  • The government believes its chosen targets for cuts are popular. Beware when they talk of squeezing bureaucrats, benefits and the better off.
  • Alongside that pain he's offered voters some gains - the cancellation of the next planned fuel duty rise and another small income tax cut by an increase in the personal tax allowance.
  • The Treasury's latest attempt to stimulate growth is to cut business taxes and to switch £5 billion from day to day "current" spending to investment or "capital" spending. This has already been welcomed by business.

One of the oldest political clichés of them all is that you shouldn't judge a budget on the day. The reason sayings become cliches is because they are usually true.

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

Miliband lobbies for Obama meeting

Sources on both sides of the Atlantic say Ed Miliband has been lobbying hard for a meeting with President Obama.

Read full article

More on This Story

More from Nick

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +1

    Comment number 422.

    Taxes and Minimum Wage..
    If the government want to cut the social security bill, then the government should stop paying top-ups to low wages and make employers pay decent minimum wage. Why should the taxpayers have to top-up wages through paying into the system, when if public sector and private companies and employers paid a proper wage, the taxes could be better used to heal the British economy.

  • rate this
    0

    Comment number 421.

    'remember that austerity hasn't arrived yet.' - jh 419

    **

    It certainly hasn't for certain groups: top private sector pay is up 27% and the state-rescued City is starting to fizzle again.

    Meanwhile it'll be decades before our finances are back in the comfort zone and that's regardless of UK economic policy.

    The main policy goal should be that the bill is paid by those who can afford it.

  • rate this
    0

    Comment number 420.

    BBC Engineering the Liverpool Political Demographics AGAIN !..
    Tories getting aplauded in Liverpool Jog on BBC.
    Question Time IS A JOKE !

  • rate this
    0

    Comment number 419.

    #418 IDB

    Alastair Darling said, in the House of Commons, that Britain's public finances would not return to a sustainable level until 2032 (under Labour's fiscal rules).

    This was probably optimistic, but he was right to point this out. Forget 2018, and remember that austerity hasn't arrived yet.

    So at least 20 years to go. Enjoy!

  • rate this
    0

    Comment number 418.

    jh66 415
    Interesting post. 'Osborne is Continuity Brown'(Cameron is continuity Blair.) Parliament is theatre which must have a pleasing ending. So ruling out true austerity. Too scary but perhaps necessary?
    Still versions of austerity vary. I doubt mine and yours would agree right now. Perhaps why we are treading water under a coalition i.e. we couldn't make up our mind what we wanted.

  • rate this
    0

    Comment number 417.

    what people here want is more jobs more money and a clear picture of the near future.
    at the moment everything seems to be going in the other direction, the government have no faith in the recovery and is puting taxes up and the public have no faith in the government and they are cutting spending on everything. there are no plans other than austerity.

  • rate this
    0

    Comment number 416.

    The government doesn't know what to do. Because it doesn't understand what s going on. So it simply allows its friends to carry on regardless. As if they know what is going on!

    They are taking their experience, gleaned from Eton, to Parliament.

    Hence the baying and baying. It's all they know, can do.

    Perhaps we should be sorry for them.They know no better.
    Never had jobs
    Now they stop all jobs.

  • rate this
    0

    Comment number 415.

    #409 Bryhers

    "Small state rhetoric" is exactly that from this Government, just rhetoric.

    Spending has hardly been cut so far, and abolishing the deficit is a 5-year moving target that is never reached.

    Osborne is Continuity Brown, using Keynesian debt financing to win power at the next election (probably in vain).

    Real austerity is found in a few eurozone economies, not here.

  • rate this
    0

    Comment number 414.

    sagamix@402
    "more valuable"?

    What recognition is 'owed' to implicit general belief / acceptance / collusion with respect to 'existing inequality'?

    If there is 'a problem with inequality', is it just lack of efficient multi-dimensional real-time retrospective & anticipatory reward??

    Admitting impossibility (?), content to beg 'more equality' or 'less inequality'???

    Clue? Care Budgets save money

  • rate this
    +2

    Comment number 413.

    The only thing worrying both George and Cameron at the moment is the lack of any sizeable amount of money to finance tax cuts in time for the 2015 election. The rest is all smoke, mirrors and pandering to the right wing of the Tory party. Guess what George most people can see right through you!

  • rate this
    -1

    Comment number 412.

    Is George right to look confident - YES. The economoy is heading the right way in a world where not many are. Things are not moving as fast as we would hope but given the state of the EU and USA it's probably as good as it's going to get. Its frightening to think what would have happened had labour been in power, no doubt France will now give us a few clues.

  • rate this
    +1

    Comment number 411.

    How these people prioritise the spending of money is totally beyond me!

    How can foreign aid be judged more important financially than the countries armed forces?

    Also how can the governments own watchdog be wrong regarding the increase or otherwise in N.H.S. Spending.

    How? Why? and for how long do these madnesses go on?

  • rate this
    0

    Comment number 410.

    Osborne's failed plan of "expansionary fiscal contraction" is exactly what it sounds like - an oxymoron.

  • rate this
    +3

    Comment number 409.

    Osborne`s presentation was politically astute but economically vacuous.He has learnt from the omnishambles but still pretends there`s only one viable economic model

    Keynesian deficit financing has one big drawback,it erodes the decision making power of private capital in favor of government with consequences for wealth and income distribution

    And they know it,hence the small state rhetoric,

  • rate this
    0

    Comment number 408.

    399 ToryBoy

    "According to James Landale the 'confident' pasty man's plan announced yesterday is designed to take benefit away from expectant mothers."
    ===
    Your post is somewhat factually chanllenged. He actually stated :
    "Labour pointing out 1% benefit uprating applies to maternity & paternity pay."

    This actually came from Labour not JL himself and isn't taking anything away.

  • rate this
    0

    Comment number 407.

    You cannot borrow your way out of debt and anybody who proposes this approach is a fool. Take note Mr Balls! UK needs to find a way of earning its way on the world. We have destroyed our manufacturing capability as the cost of labour in the UK and Europe is far to great. Until UK can make and sell things at a competitive price we are doomed to bumping along the bottom. Take note Mr Osbourne!

  • rate this
    -2

    Comment number 406.

    292.Brangy
    279 Nautonier
    If you quote statistics please get them right!
    Here are some that are verifiable

    +
    Rubbish
    IMF says UK in budget defict in 2007 & you're looking at the wrong figures anyway as should include govt spending & debts & deficits
    Keep trying - do some proper reserach & get some advice before you post.
    All Labour govts leave with debt higher - Sham-Balls is a LIAR

  • rate this
    +2

    Comment number 405.

    @ 104.

    "Having just witnessed Osbourne's robust and confident performance in contrast to Balls' bumbling inadequacy (look at the faces of his colleagues!), there can be no doubt whatsoever as to who is better equipped to steer the UK's economy through this dreadful period."

    Both are incompetent, do not take the glibness and self-assurance of one conman as a sign he's more use than the other.

  • rate this
    +1

    Comment number 404.

    The Chinese Rating Agency Dagong has already downrated the UK's credit rating to A+, the same as Malaysia but below Canada, Australia,Canada and several European countries including France. But it's above the US. It's an interesting way of looking at things since it may influence countries that actually have some money to lend.

  • rate this
    -1

    Comment number 403.

    Seems to me the comparison between Balls and GO needs to define its terms.

    Is anyone claiming the CoE should be the main economist behind policy in his own right? Or is he mainly a parliamentarian, but one who should be very wise in his choice of advisers?

    I certainly don't think there's any room for complacency on EB's part, on the basis of his academic edge over GO. He knows now too.

 

Page 1 of 22

 

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.