Autumn Statement and the deficit

The Coalition came together to cut the deficit. So far they have kept their spending increases within plans, but have experienced a shortfall on receipts, so the task is half done.

The Autumn Statement provides a suitable opportunity for all main parties to set out their intentions for the next five years. Would any wish to go further and faster in curbing spending? Do any want to go faster with tax rises? Do any have a way to boost tax revenues with lower or similar rates, through promoting growth?

The UK economy needs to develop higher productivity, which in turn can lead to higher pay. The efforts going in to strengthen education and training, to improve the science base, to bolster manufacturing and to make it more worthwhile to work are all policies designed to foster more and better paid jobs, which are the key to economic improvement and to lower welfare and benefit spending.

The main policies revealed by Labour and Liberal Democrats reveal nothing of substance about how they wish to tackle the deficit. Labour’s cuts are tiny, and their tax rises all absorbed by spending pledges. In addition Labour wrongly think increasing the top rate of Income Tax to 50% would increase revenue, when history shows it would cut receipts. The Lib Dem’s Mansion Tax will not make a lot of difference to total revenue.

The Conservatives have got furthest in talking about the magnitude of public spending reductions they will need to eliminate the deficit in the next Parliament. The OBR figures today will show us where the government thinks it has reached on the long road to balanced books.

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63 Comments

  1. Lifelogic
    Posted December 3, 2014 at 5:43 am | Permalink

    “UK economy needs to develop higher productivity” indeed it does.

    When the state sector is spending (largely wasting) 47% of GDP, plus artificially pushing up energy costs, has absurd employment laws, restrictive planning, expensive housing and commercial property, dysfunction & uncompetitive banks, very high and over complex taxes, poor roads, a poor and health education system, a expensive slow legal system, endless fake equality drivel, daft divorce laws, endless other bonkers regulations, nearly everything from coming from the EU – then this is not so easy.

    Better for most businesses to go somewhere that does not have a government that holding them back in these endless absurd ways. The UK needs a real competitive advantages. It does have some: a few good universities, the English language, stability, fairly honest if incompetent government, some in pop music, film, fashion, it is fairly safe and has some pleasant places to life. In GDP (by purchasing power parity, which is what matters to most people) we are about 28th behind basket case France and just above Italy and South Korea.

    • Hope
      Posted December 3, 2014 at 9:28 am | Permalink

      Osborne was going to balance the structural deficit by now. Figures show he is way off. There is no difference between the LibLabCon. You must stop pretending there is when one of them is in govt with the Tories, who Cameron gave fifty percent of the say. This was allegedly their reason for coming together.

    • Alexei Garan
      Posted December 3, 2014 at 10:25 am | Permalink

      Couldn’t agree more – the solution to the economy (as well as all other areas of life) being suffocated by an overreaching public sector is to cut back government and the majority of the things it ‘does’. This seems blatantly obvious to anyone outside the government sector – but those within it rarely see this and continue to try and focus the populous on the marginal tweaking as being the big agenda. Unsurprising of course.

      I wonder how much more damaging to Westminster UKIP or Russell Brand or any other mode of ‘protest expression’ would be if they also adopted an explicit libertarian economic agenda of slashing government mandates.

    • oldtimer
      Posted December 3, 2014 at 3:15 pm | Permalink

      I have now listened to the Chancellors` statement. It was clearly an electioneering statement. We did not discover from his statement that the national debt is going to be even higher (by c13 £billion) than previously forecast over the next two years. That gift was left for Mr Balls.

      I heard nothing in the statement that will resolve this fundamental problem. Growth with better productivity is needed but that has been lacking over recent years. Part of the reason must surely lie with the nonsensical energy policy pursued by the UK and the EU. In this connection it is worth spending c 12 minutes listening to Dr Benny Peiser`s recent evidence to the US Senate Environment and Public Works Committee on EU climate/energy policies. He succinctly sums up the issues. They pose an existential threat or, as he quotes the retiring EU Industry Commissioner EU as saying, industry is facing “systemic industrial massacre” because of these policies which force heavy industry and CO2 emitters elsewhere around the globe.

      In answer to a question he points out how subsidies to renewable energy has led to subsidies for conventional energy generators who are forced to operate inefficiently on standby. On top of that, in Germany, heavy industries themselves are having to be subsidised through relief from energy taxes paid to discourage them from relocating elsewhere. But the consumers must pay, and twice over. He also quotes a recent Financial Times: “cheap energy is the new cheap labour”. I see no resolution for the UK`s financial problems unless and until its useless energy policy is ditched.

      • Lifelogic
        Posted December 3, 2014 at 4:02 pm | Permalink

        Exactly it is insane to have an expensive energy/job export policy. It does not even reduce Co2 emissions. But then neither does Ed Davey’s trains, wind farms, bikes, silly wind or PV cells grants – all things considered.

  2. James Winfield
    Posted December 3, 2014 at 6:53 am | Permalink

    With oil prices low, is it time to increase fuel duty? Especially given that one assumes tax revenues from North Sea Oil will be down, and inflation could do with nudging a little higher?

    Prices are 20p lower at the pump than a couple of years ago – as long as the duty does not increase prices, assuming petrol will fall lower, than I would like to think it will be acceptable.

    • Max Dunbar
      Posted December 3, 2014 at 9:11 am | Permalink

      I don’t think that you have thought this through. Fuel duty, once it has been increased, will never be reduced and when the price of oil goes up again the increase will be magnified by the proportionally higher rate.

    • backofanenvelope
      Posted December 3, 2014 at 10:07 am | Permalink

      Didn’t Mr Osborne have a neat plan before the 2010 elections? The duty on fuel would rise and fall in line with the movements in the oil market. The Treasury and the motorist would enjoy stability. Yet another unkept promise!

    • Gary
      Posted December 3, 2014 at 10:09 am | Permalink

      Sheesh, don’t encourage them ! They cannot spend wisely what they already plunder from us. The naivety of the socialist is unbounded.

    • Lifelogic
      Posted December 3, 2014 at 11:32 am | Permalink

      No it certainly is not the time to increase the rip off taxes on fuels further. The lower energy prices are a welcome boost the the private sector after all the endless mugging by Osborne. They should stop all the green subsidies and HS2 instead as these are clearly mad and are even madder as gas and oil get cheaper. Also cut the bloated & generally incompetent government.

      We are still paying double what the USA pay for energy. Jobs and industries are being exported just for the sake of the totally discredited Ed Davey warming exaggeration religion.

    • Graham
      Posted December 3, 2014 at 11:52 am | Permalink

      James,

      I think the majority,including me, would disagree with you.

      It’s our money to spend not the Government’s. To follow your argument would be a great boon to those who would steal our money to waste on follies with a one way movement in tax.

  3. Richard1
    Posted December 3, 2014 at 7:16 am | Permalink

    One thing is the total level of spending and tax. Another is how well is the money spent. What is concerning at this time of supposed austerity is to see waste on spending such as HS2, green crap, overseas aid to countries which don’t need it, and the all-pervading bureaucracy. There needs to be a relentless focus on how to get the best value for taxpayers. And that should include questions such as how do we get the best possible healthcare for our money into the NHS.

    • Lifelogic
      Posted December 3, 2014 at 8:31 am | Permalink

      Indeed not only do they spend 47% of GDP they spend it appallingly and deliver little of any real value at all.

    • oldtimer
      Posted December 3, 2014 at 9:42 am | Permalink

      For much of that you can blame those with degrees in Posturing (to the gallery), Pandering (to special interest groups) and Escapism (from reality). Too many on the front benches of both the coalition and the opposition fall into this category. with few have held down a proper job in their lives. Mostly they have been in occupations which pontificate on the fate of others – Mr Hunt is a notable exception having built up and run his own successful business. They are still in escapism mode, quick to blame and penalise those who work for a living and run a business, but all too ready to excuse themselves and the national finances for which they are responsible in piling up more and more debt.

    • libertarian
      Posted December 3, 2014 at 2:02 pm | Permalink

      Richard1

      Amen to that. As those of us who run businesses know because we are regularly forced to do it, its possible to cut spending and cost overheads by 20-25% whilst maintaining or improving services

      Every day I’m offered “free” money by various govt depts, local authorities and quangos. How about we stop the huge waste?

      Why doesn’t a single politician have the courage to stand up and say we can save £10 billion on govt waste without cutting frontline services

      • Edward2
        Posted December 3, 2014 at 5:21 pm | Permalink

        As usual Libertarian you are right.
        We have here in the Midlands several heads of local Councils,Government quangos, education and NHS trusts coming on the TV and local radio telling us how short of money they are due to the wicked “cuts”
        But when you drill down into their figures you find that each and every year they have had more money that the year before.

  4. Lifelogic
    Posted December 3, 2014 at 7:27 am | Permalink

    “The efforts going in to strengthen education and training, to improve the science base, to bolster manufacturing and to make it more worthwhile to work”

    So far (after four and a half years of the coalition) these efforts have been rather pathetic. Once again the state sector and benefit claimants have actually had increases and the 80% of workers in the private sector have been hit again by 299+ tax increases, lower pay, inflation and having their wages undercut by the open door immigration policy. Making the incentives ever worse.

    The best way to improve the science base is perhaps to stop the government loans for the bulk of the hobby subjects and the many pointless courses at universities that clearly have little real value. At least half of them by my judgement. If you want to study a hobby pay for it yourself, look on the internet or buy a book.

    I see that millions are being lost by the government in loans, mainly to fake EU students, who just vanish with the money and do not turn up to the courses. Not to mention the many who will clearly never be able or willing to pay back.

  5. JoeSoap
    Posted December 3, 2014 at 7:39 am | Permalink

    No, the Coalition came together to eliminate the deficit.
    They have failed, whatever their policies are or were.
    In the business world, they would be out of business. Your leadership, if no resigning to let somebody more competent loose on the task, should acknowledge this and take action where they have gone wrong.

  6. Narrow Shoulders
    Posted December 3, 2014 at 8:00 am | Permalink

    I have been impressed with the politics of each of George Osborne’s budgets (even the omnishambles did not unwind during the speech) and statements to date. Boxing his opponents into a corner with well delivered arguments and presentations. Arguing against his measures make opponents look profligate and unable to adapt.

    However the content of these speeches is rarely matched by the actual policies. He positons one issue but the outcome is rarely as stated.

    Mr Osborne is a talented political Chancellor but not a good guardian of our economy. He has not made one tough decision to benefit the long term instead relying on politically expedient delivery and Keynes’ stimulus.

    My plea to the ccoalition is to stop spending our money and let us keep more of it to spend as we wish

    • Lifelogic
      Posted December 3, 2014 at 8:28 am | Permalink

      Indeed because government spend so inefficiently. It would be so easy to cut the deficit yet in fact is it still going up.

      In the state sector there is so much over pay, so much waste and whole departments that do little but net harm. So much fat and waste that could be cut out. Private industry could do nearly all the things governments do for less than 2/3 of the sum governments spend doing them badly.

      Much money is spent by government arguing over which tentacle of government should pay for something. Much is spent on pure indoctrination and trying to buy votes.

      • Narrow Shoulders
        Posted December 4, 2014 at 8:35 am | Permalink

        @LL

        When contracted by the public sector, private sector organisations do not have a great record of introducing efficiencies. The IT contracts, security arrangements and the Olympics immediately spring to mind where private sector contract writing organisations have cost the taxpayer more in the private sector than keeping it in house would have.

        Better to change the public sector mindset by giving it less money but specific delivery targets. That way management could not cut the front line claiming lack of funding while awarding themselves large pay increases and wonderful pensions.

        Cigars and brandies all round!

        • Lifelogic
          Posted December 4, 2014 at 7:08 pm | Permalink

          Indeed because the state sector is as bad at contracting out as is it is at running things.

    • oldtimer
      Posted December 3, 2014 at 9:48 am | Permalink

      He has rightly claimed one significant measure – raising the age at which the state pension is collected. But I agree with you that his budgets often have been clever politically (shades of Gordon Brown) but economically ineffective. Other than that I think that much of the UK`s economic growth has been in spite of rather than because of budget measures.

  7. Mike Stallard
    Posted December 3, 2014 at 8:38 am | Permalink

    I want to say how impressed I was with Kenneth Clarke praising Mr Osborne as Chancellor on Newsnight. I stayed up specially to hear him. If he is impressed, that is enough for me.

    • Roy Grainger
      Posted December 3, 2014 at 11:08 am | Permalink

      Newsnight must have been disappointed – I assume they got him on because they assumed he’d say the opposite.

    • Lifelogic
      Posted December 3, 2014 at 11:37 am | Permalink

      Ken Clark (a pleasant affable chap who has been wrong on every major issue for most of his life) – why on earth are the Tory party not forcing him and people like him to leave the party and retire.

      He is almost as discredited as Healey, Heath, Major, Bliar, Cameron and Gordon Brown.

  8. alan jutson
    Posted December 3, 2014 at 8:43 am | Permalink

    As soon as Mr Cameron joined forces with the LibDems and let Mr Clegg hold a veto over every policy to be introduced, the so called agreed plan was doomed, simply because it then would not go far enough.

    We had a huge deficit, so why allow departments to INCREASE their BUDGETS.
    Mistake number one.

    We had huge spending by all Departments but it would seem no one other than Ian Duncan Smith (not sure if he succeeded or failed as yet) even looked at starting again from zero to clear out as much waste as possible.
    Mistake number two.

    We had The entire Government for years saying it was cutting expenditure at the expense of a massive media negative when they were doing no such thing.
    Mistake number three as it was a lie.

    We had The entire Government for years saying it was paying down the debt, trying to encourage people to think our finances were getting better due to their plans.
    Mistake number four as it was a lie.

    I will be moderated if I continue.

  9. agricola
    Posted December 3, 2014 at 8:48 am | Permalink

    The deficit is merely a recording of change. Are we earning more than we are spending as a nation. My verdict is that we need to earn more and spend considerably less. Just look at the amount we have borrowed and owe in the term of this government. As much in the coalitions five years as in Labours thirteen for a grand total of around £1.3 Billion. This is what you your children and grandchildren will have to pay back unless Osborne has a way to just magic it away.

    • Bob
      Posted December 3, 2014 at 7:41 pm | Permalink

      @agricola

      I think you meant to write £1.3 trillion.

      If you earned £50 per second it would take you 824.45 years to get £1.3 trillion (before tax).

      Problem is our government are adding to it every day.

  10. Brian Tomkinson
    Posted December 3, 2014 at 8:52 am | Permalink

    JR: “The Coalition came together to cut the deficit.”
    Nice play with words; the intention was to eliminate the deficit. Result – failure.

    JR: ” So far they have kept their spending increases within plans”
    This explains why they have spectacularly failed to eliminate the deficit.

    JR: ” (the coalition) have experienced a shortfall on receipts”
    Despite increasing VAT to 20% and 509 other tax increases.

    JR: “The Conservatives have got furthest in talking about the magnitude of public spending reductions they will need to eliminate the deficit in the next Parliament.”
    Really? Perhaps you would remind us of what the scale of cuts will be and in what specific areas? I think you will struggle.

    JR: ” The OBR figures today will show us where the government thinks it has reached on the long road to balanced books.”
    In 2010 the long road was 5 years. Now it is another 3 years (just reminding you that Osborne has said this). Do you expect us to believe a word of it? Spin all you like for your pals, it cuts no ice. They and you have failed us on the main issues on which you were elected – the deficit and immigration.

    • Hope
      Posted December 3, 2014 at 6:01 pm | Permalink

      You are of course right. They have not achieved their plans if they had the deficit would be balanced, it is not. They would not be spending as much on overseas aid, EU and other such wasteful issues. The bonfire of quangos might help reduce the public sector spendng. Some Govt. departments could be got rid of without any consequence to the public ie culture media and sports, DfID, Business, equality etc. The waste has continued without Cameron and Clegg exercising common sense that would help get rid of the deficit. Utterly clueless. For once Balls is right, every target missed and every promise broken.

  11. Edward2
    Posted December 3, 2014 at 9:11 am | Permalink

    There was an economist on Sky News recently, a lady who actually teaches our students in a University, arguing that the national debt and deficit was artificial and should be ignored or simply written off.
    It was not something we should worry about.
    We should just keep printing money via QE and eliminate underfunding in health education and welfare and of course climate change.
    She claimed the resultant economic growth long term, would be higher than the austerity economics we currently endure and so we would be better off overall.
    But if we were not then just default.
    Amazing.

  12. DaveM
    Posted December 3, 2014 at 9:13 am | Permalink

    “The main policies revealed by Labour and Liberal Democrats reveal nothing of substance about how they wish to tackle the deficit”.

    Absolutely. It seems that both parties’ answer is merely to tax the top 10% of earners to death. Never mind that the difference between the top 10% and the top 5% is huge. Even most Labour voters are not taken in by this proletarian rhetoric any more.

    I have to say I admire the composure of the Conservative front benchers when the opposition constantly harangues them over austerity etc. The hypocrisy of Milliband is almost breathtaking when you consider what his cronies – led by bungler Brown the people’s hero – did to our country!!

    However, as most people on this forum regularly observe, it is the waste and the apparent lack of thought with regards to spending which seems to be the real problem. I work in the public sector, and whilst we at the lower levels have to spend a lot of time and effort working out how to reduce our relatively meagre spending (whilst delivering the same output) it is utterly demoralising to read about the criminal levels of waste in organisations like the NHS and the Civil Service. Two words John – Abbey Wood. There are units in the army which haven’t trained properly for years because they haven’t even got any blank ammo to train with. And yet they will step up when they are called upon to go away and fight – no strikes, no moaning, even though the average private gets less than £20k a year – before tax.

  13. Max Dunbar
    Posted December 3, 2014 at 9:22 am | Permalink

    Labour know perfectly well that increasing the top rate of income tax to 50% will not increase revenue. It’s based on the optimum vote take, not tax take.

  14. rick hamilton
    Posted December 3, 2014 at 9:26 am | Permalink

    All these well-meaning objectives – strengthen education and training, bolstering manufacturing, improve science base, etc – will take many years to show results. I wonder how many ministers have any idea of the vast range of manufacturing and engineering skills and expertise, built up over decades, that have been completely lost through closure of industries and sell-offs to foreign ownership? And how long it will take to replace them with 21st century technologies ?

    To any business person it is obvious that government must reduce its huge expenses and its burden on the taxpayer as much and as quickly as possible. Do what NZ did years ago, ask about every department “Why does government need to do this?”. If the income doesn’t materialise it is only common sense to cut costs accordingly.

    Unfortunately politicians only understand taxing and spending. They have no concept of motivation. With all due respect to our host, who has real business experience , most British politicians talk like social workers whereas Asian ( I mean Oriental ) pols talk like businessmen. We really have to think about ways of punishing failed ministers just like CEOs in private enterprise, instead of the easy escape from disaster exemplified by Gordon Brown who got away literally Scot-free.

  15. Ian wragg
    Posted December 3, 2014 at 9:26 am | Permalink

    We need to improve productivity. Pray enlighten us how when you keep importing half a million immigrants yearly

  16. Bert Young
    Posted December 3, 2014 at 9:48 am | Permalink

    The deficit cannot be ignored and fudging around the edges – tax modifications etc , are not going to solve it . The biggest cost to us is the EU ( the net contributions , the extra burdens that come with our membership – high cost of energy and other forms of restrictive controls ) , it has injured our pride and independence and is a cross we do not need to carry . Brexit should be our lead priority in eliminating the deficit .

  17. Sandra Cox
    Posted December 3, 2014 at 9:51 am | Permalink

    “My plea to the coalition is to stop spending our money and let us keep more of it to spend as we wish”

    I do believe that we are an extremely charitable nation. If there is just one good thing I can say about the government it is that it is generally as good as its word in fulfilling its pledges to natural disaster areas etc, unlike some other countries that seem to “pledge and forget”!

    Over the past few years I’ve decided I have to leave it to the government to give part of my tax money (or should that be part of the debt I incur) to overseas causes on my behalf because I have no choice in deciding on the cause or the amount.

    In my family, rather than buying gifts for adults, we choose to give to charities just before Christmas. We tend to give to local causes, such as hospices, children’s hospitals, Royal Marsden, and to more well known charities such as British Legion, Help the Heroes, Alzheimers and cancer research.

    It is quite difficult because we are faced, on a daily basis, with heart rending TV adverts for overseas charities, but I feel the government has taken on that responsibility. On top of that, it has gone one step further by expecting the taxpayer to provide foreign aid right here in the UK.

  18. nick
    Posted December 3, 2014 at 9:54 am | Permalink

    The way to wipe out the deficit and national debt (let us not forget that bagatelle!) would be to get rid of whole government departments,reduce the state by 90% and the remaining services ie police,courts and armed services would be funded by voluntary subscription.Not the fiddling around that the estimable Mr Redwood advocates.This could be done by evolution not revolution over a decade or two.In other words a rejection of the whole mixed economy post war model which has bankrupted Europe and beyond and caused the global economic disaster and to which failed model we persist in clinging to in classic denial mode.The time for faffing about is surely over.This is essentially a moral argument as the state exists to protect our individual rights not play mega nanny to our infantile wants and needs and mortgaging future generations to do it.

  19. Steve Cox
    Posted December 3, 2014 at 10:00 am | Permalink

    As some of us predicted back in 2011 the Chancellor has failed dismally in his primary task of getting rid of the deficit. Please spare me any vacuity about how his forecasts are in line with the OBR and red book, the goalposts have been moved so many times in the last few years that they could make anything look in line. We are approaching a general election so in effect genuine deficit reduction is stuck in limbo and has been for at least the last 18 months. Meanwhile we are still spending over £100 billion pounds a year more than the government gets in tax, and the current account is a similar disaster zone. The polls show that, barring a John Major-like 1992 sudden electoral change of heart (or an even rarer change of heart between Cameron and Farage) , which is very rare, we will have a Labour government in 2015 and all the fiscal lunacy that implies. Enjoy the supposedly sunny uplands of our glorious economic recovery while you can, people, because for me Jeremy Warner writing in The Telegraph today sums up our prospects:

    “To still be running massive budget and current account deficits at what may well be the top of the cycle is a truly dangerous place to be.”

  20. Iain Moore
    Posted December 3, 2014 at 10:05 am | Permalink

    “The UK economy needs to develop higher productivity”

    But what is the incentive to push for higher productivity when employers can tap a 500 million labour market, many of whom will work for very low wages?

    When the Black Death killed off one third of the country, low wage indentured peasants liberated themselves from their work on the land , and directed their labour to higher rewards in the towns a cities. The landowners in turn had to change their practices and the crops they grew, and in the long run moved to mechanisation. This all gave us a massive productivity boost.

    So what are we doing now? Sipping in what amounts to indentured labour, to pick crops in the fields, because the agricultural lobby is able to squeal the loudest for their ‘cheap hard working’ immigrants, so they don’t have to bother investing in mechanising these jobs.

    And this example I feel is being played out through out our economy, worse sustaining low wage low value jobs, that should have been shaken out from our economy and off shored to developing countries, not kept here at great cost to the tax payer as the only way to make them viable is to have the state pay a large portion of their wages in in work welfare. Nobody in work should be receiving any state subsidy

  21. acorn
    Posted December 3, 2014 at 10:29 am | Permalink

    The big problem is the rising share of national income that is going to corporate profits and the falling share going to wages. Real wage growth has increasingly disconnected from worker productivity. Hence, the workers (in aggregate), have less real net disposable income (RNNDI) to buy the stuff that is made by the corporates. The types of cars the workers make and can’t afford to buy are getting smaller. Additionally, the distribution of the increased corporate profit share is going to the top 1%

    The political elite solved that problem last time by stuffing households full of low interest debt, so they would keep buying stuff while real wages were being deliberately devalued (now called “structural reform”). Real adjusted household disposable income (RAHDI) has been steadily dropping since 2010. This is why you don’t feel any better off with headline GDP growth “higher that the rest of the G7” as you will no doubt here several times today.

    RNNDI and RAHDI are modern precision metrics, a product of the digital era. Definition at http://www.ons.gov.uk/ons/rel/wellbeing/measuring-national-well-being/economic-well-being/measuring-national-well-being—economic-well-being.html?format=print

    Reply Manufacturing wages are rising in real terms. All people in employment for more than a year had an average increase of 4% over the last year.Compare the size of today’s Mini with the size of the 60s/70s Mini – it’s a lot bigger and much better equipped.

  22. Mike Wilson
    Posted December 3, 2014 at 10:42 am | Permalink

    Because all politicians refuse to be blunt and honest about the state of the economy – most people couldn’t care less about (let alone understand) ‘the deficit’.

    Your lot, Mr. Redwood, had your chance. After the 2010 election Cameron should have gone on the box with a ‘state of the nation, national emergency’ speech spelling out how much more the government was spending that it was receiving and pointing out the start choices. This would have set the scene – and everything that followed would have had to be considered in terms of ‘the deficit’ and ‘living beyond our means’ and so on. The public sector pay freezes would have been understood and it would have cut the ground away from under the unions.

    But, no, it was business – i.e. endless spin and bull – from day one. Have never understood why the Tories, having gained a share of power, carried on with Labour’s devotion to spin.

    We have reached the point where no politician (apart from Farage) answers a question and the responses that are given are filtered through a spin machine. It is very depressing.

  23. They Work for Us?
    Posted December 3, 2014 at 11:24 am | Permalink

    Scrooge type comments.
    Why do we have gift aid at all? What is the cost to the exchequer? Should we scrap it and “save the money”. When giving to charity, which is voluntary, we could give a bit more and perhaps be more discerning so as not to support those with high management overheads and political bias.

  24. Bill
    Posted December 3, 2014 at 11:29 am | Permalink

    It seems clear to me that, as usual, the middle class are being asked to pay for the mistakes of the Labour Party. The total size of the deficit during the period Gordon Brown was in charge multiplied vastly. It is like paying for the Second World War. For this reason, presumably, savers are penalised and taxes are directed up the income scale. More or less every financial transaction we make attracts VAT (excluding food and clothes). What alarms me is the apparent paralysis of the government in the face of complex decisions with competing interests. How long is the discussion over another runway for London going to take? If these decisions are beyond us because of bureaucratic inertia, what hope is there for our long-term economic viability?

    So, it does not surprise me then that, despite the best intentions of ministers, the mountain of debt continues to overshadow us. Those who speak on behalf of the Left appear to be largely innumerate and sound utterly irresponsible whenever they open their mouths on these matters. The Balls couple, Ed and Yvette, are especially strident and unconvincing.

  25. Douglas Carter
    Posted December 3, 2014 at 11:30 am | Permalink

    Apologies in advance John – off-topic, but one intervention you may find gratifying.

    http://www.telegraph.co.uk/comment/letters/11268820/Letter-Lib-Dems-hail-Thatchers-EU-destiny.html

    Today’s Daily Telegraph gives us a letter from ninety LibDems, many of somewhat questionable actual seniority praising Margaret Thatcher for her famous Bruges Speech.

    I’m sure you’d welcome ninety new Bruges Group applicants to swell the enthusiasts ranks – and all LibDems. Who would have thought?

  26. ian
    Posted December 3, 2014 at 12:12 pm | Permalink

    It will work it self out when the country go belly up and like I said before that’s when the tax receipts go down and down. The new trade deal all about taking governments court for loss of business if they bring in new laws that make them lose money or imposes taxes on them. lots of trials that go on for years and loss taxes even if you win, will come to billions each year, that how big companies will make their living going forward out of the courts because people will have less money to spend so instead of companies working for a living their profits will come from the courts.

  27. The PrangWizard
    Posted December 3, 2014 at 12:17 pm | Permalink

    I’m getting a little tired of hearing the PM saying ‘the deficit is down by a third’. He’s been saying it I think for a number of years. Is it ever going to be anything else but a third?

  28. turbo terrier
    Posted December 3, 2014 at 12:32 pm | Permalink

    All the talk and vote catching projects do not take away one hoot that we are still £1.5 trillion in debt. So let us get a leader and government with experience in the private sector industry and business. The only things we will spend money on will be the answer yes to the following question. ” Will it add value and profit to the business?” Too many departments were formed when the UK was a totally different place. As the country moves on so must the governmental departments. Are they all really necessary? To add to the mix most local authorities operate along the lines of their party dictat and dogma. The country has to start looking outside the box in every area. We need to be the masters of our own destiny and the politicians have got to start hearing and listening to the electorate. There are a few on the back benches with our host but the leaders talk a good act but actually do nothing. If Poland, Germany to name but a few have made it clearly known that our PM is very unlikely to get change, then what the hell are we still doing in the EU. It is the referendum on our continued membership that should be talked about today. Politicians talk as if it ain’t broke don’t fix it. Well it is more than broke the country is beginning to fall apart very rapidly and in reality the leaders do three fifths of nothing just talk a very poor act. Still, they have us the loyal taxpayers to bail them out at great expense to ourselves.

  29. eeyore
    Posted December 3, 2014 at 1:45 pm | Permalink

    Four things I think should be in every Budget or Autumn Statement, by law:

    1. The percentage of GNP the government intends to take;
    2. The date of Tax Freedom Day;
    3. A breakdown of how much of the total income tax is paid by each income decile;
    4. A warm and heartfelt thankyou to the taxpayers, personal and corporate, who make the whole thing possible.

    How about it?

  30. The PrangWizard
    Posted December 3, 2014 at 2:17 pm | Permalink

    Quick response – I liked the Autumn Statement – am delighted that we should now hear the PM say the deficit has been cut by half. But for Goodness sake, do keep cutting and keep to the plan outlined. I liked the reform of stamp duty.

    I do wish though your leaders would mention England when matters relate only to England instead of ‘our country’. Are they afraid of the Scots? – answer ‘most definitely yes’.

    So, the case for ‘English Votes …’ is unanswerable. But when is something going to be done, what will it be, and when is it likely to be applied?

    Reply Mr Osborne reaffirmed English votes

    • Hope
      Posted December 3, 2014 at 6:06 pm | Permalink

      JR, politicians are talking about regions of England. Darling was quite clear about it today. We see from Manchester that Osborne does not listen to the electorate which did not want a mayor. He is now imposing and funding his regionalisation plan or rather the EU regionalisation plan.

      • CdBrux
        Posted December 3, 2014 at 8:44 pm | Permalink

        That’s not quite the case: the city of Manchester rejected a mayor, the deal is to have an elected Mayor for the ‘city region’ of Greter Manchester (10 local councils). At the same time the elected police comissioner will have their role taken over by the elected mayor so no overall increase of politicians.

    • The PrangWizard
      Posted December 4, 2014 at 9:42 am | Permalink

      I heard his words, but my question was clear – when are we to see some action? We are now in December, the end of November when we were told to expect something has come and gone. Have I missed something?

      Tell me sometime how will it work with no First Minister or any dedicated Ministers? Are we to see Cameron dragged kicking and screaming into the House and being forced to say the word England which we know he avoids like the plague? How will the administration of government be restructured? Will your party produce a Manifesto for England?

      I heard Mr Rosindell, introducing your Constitution Reform Bill say he does not believe English MPs should sit on the green benches in the House, he wants them to be elsewhere in another building. He’s right. And if you don’t between you do the job properly ‘English Votes…’ will be the joke many people expect it will be, and an insult to the English and to democracy.

      Reply I backed Mr Rosindell’s Bill though I think we need the first step of English votes for English issues and I do not want to create an expensive new political class of English MPs. Mr Osborne reaffirmed support for English votes yesterday.

  31. ian
    Posted December 3, 2014 at 3:50 pm | Permalink

    Wet&mad just said he has fiddle the books so the debt is only 91.3 this year which 50% down on 2010, going forward I can see more fiddling with the books, I like the one 16/17 only 40 billion pounds debt. Growth was forecast at 3.2 to 3.4 this year but now only 3.0 per cent and will go down as the year go on to may be 2.8% and way down as we go forward, all smoke & mirrors. PFI is the big one about 220 billion in 2010 now 300 billion in 2015 that’s 15 billion extra a year. he has put the NHS budget up by 600 million a year to 3.1 billion. stamp duty went up for the 125,000 pounds to 250,000 pounds bracket to 2 per cent from 1%. 3 billion cut to tax credits for the poor. and rolling cuts to Whitehall & service of 10 to 14 billion a year. The money he said he be getting from offshore companies you can forget that and non doms. a bit for small business, banks you will lucky. Scotland the big one, not a word, will put up debt interest and inflation, EU debt 34 billion 8 billion a year over 5 year, not a word, is that right john. T rade deal not a word, look for high courts costs and lots of work for accountants & barristers. Steady as she rolls. Oil was a nice one.

    • Edward2
      Posted December 3, 2014 at 5:25 pm | Permalink

      Gets my prize for the world’s longest sentence.

  32. Robert Taggart
    Posted December 3, 2014 at 4:15 pm | Permalink

    Gideo gave a good ‘account’ – considering, but, he needs to crack down hard – after next May that is !
    Alas, still no ‘relief’ – for us scrounger savers – no increase on the paltry £6K lower savings limit.
    Still – it does make for a more comfortable nights sleep !

  33. Kenneth R Moore
    Posted December 3, 2014 at 4:38 pm | Permalink

    Sorry I just think John Redwood is in a complete state of denial or he has concluded the truth is too unpalatable for his followers. On the ‘long road’ to balanced books he doesn’t mention that debt interest is going up all the time (up by £19bn in this parliament alone). How John are you going to balance the books when the population and demand for services is rising at 0.7% per year, revenues are flat and debt obligations mounting ?
    Growth to this government means growth in jobs which unfortunately for you and me isn’t delivering any revenue because they are of such poor quality.
    The official policy is to oppose mass immigration but quietly the treasury welcome it and are hoping it will dig them out of their hole – well it won’t.
    Spending is high because the economy is in such a bad way that the Chancellor is having to plough huge amounts of borrowed money in just to keep us out of recession (and him in office) .
    Please recognise spending £1 of borrowed money to produce less than £1 of growth isn’t a healthy economy. It is a Ponzi scheme.

  34. ian
    Posted December 3, 2014 at 4:39 pm | Permalink

    deficits not to go away till 2027, debt about 1.5 trillion pounds PFI 300 billion pounds that’s 1.8 billion pounds. Over next 5 years with Scotland the EU and PFI I see the debt going to at best 2.2 trillion to 2.6 trillion. If they go out of control the sky the limit, default will be on the way.

  35. BobE
    Posted December 3, 2014 at 4:48 pm | Permalink

    Cut Hs2
    Cut Trident
    Cap public sector pay to a max of £150k per annum
    Cap public sector pensions to £75k per annum max
    Charge companies a turnover tax.
    But nothing will happen will it.

  36. CHRISTOPHER HOUSTON
    Posted December 3, 2014 at 5:00 pm | Permalink

    Viewed Mr Osborne’s performance on TV. It was an Election Broadcast on Behalf of the Conservative Party and truth to tell it was a good deal less patronizing than usual but no more durable.

    So there is a new way to calculate economic performances which coincidentally makes the Chancellor’s waistcoat buttons shine all the brighter. There were projections of year by year successes which Mr Balls surprisingly countered with year by year failures.

    Basic honest economic analyses always warn except in this case it seems that past performance is no guide to future performance. But I guess government has to keep its backroom girls and boys busy doing something or other whilst failing to provide even rudimentary totals and analyses of capital outflows via migrants’ earned income and benefit income. Also the outflow of capital from businesses owned by migrants and former migrants in the shape of various forms of accommodation even to hair-styling salons of which Britain can never have too many and, in some cases exclusively staffed by their own managers who despite obviously being schooled in a foreign accounting system with its own peculiarities appear nevertheless to be doing a sterling job.

  37. Richard
    Posted December 4, 2014 at 10:03 am | Permalink

    Mr. Osborne said about the public finances :

    “And I can tell the House that by 2019-20 Britain is now predicted to have a surplus of £23 billion.

    Out of the red and into the black for the first time in a generation – a country that inspires confidence around the world because it seeks to live within its means. “

    Is Mr. Osborne claiming he can turn our national debt, currently at £1.5 trillion, into a surplus of £23 billion by 2019-2020 ?

    Reply NO, he is talking about the deficit, not the debt. Debt will be falling as a percentage of GDP.

  38. Richard
    Posted December 4, 2014 at 10:16 am | Permalink

    Mr. Osborne’s Autumn Statement did not contain :

    A total figure for the National Debt.

    Any figures for how much the country is paying in debt interest each year.

    Any figures for how much we are paying the EU each year.

    Any figure for our EU liabilities such as the building of HS2 (transport being an EU competency) or the £250 billion Investment Plan proposed by Mr. Juncker.

    Reqply Try reading the full Statement – it does of course record the important figures including debt interest which he referred to in the speech and EU contributions

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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