The Coalition increases total public spending again this year

In 2013-14 the government plans to increase UK total public spending by 7% or £47bn. (Red Book 2013 Total Managed Expenditure). If you adjust for changes to the Post office Pension fund, the increase is still £19bn. Both current and capital spending is now rising, after the Labour cuts to capital spending earlier this decade which the Coalition largely implemented. Current spending has been rising in real terms under the current government, though at a slower pace than in the previous decade.

The continued buoyancy of public spending explains why the deficit remains persistently high, with planmned extra borrowing this year at £10 bn a month. The news that the economy is now growing faster than forecast means there should be welcome news of lower borrowing this year as tax receipts increase.

The UK in 2007 before the crash was already a high borrowing country. The cyclically adjusted deficit was 5% that year, compared to the US at 3%, Germany at 1% and Canada making debt repayments. The great recession of 2008-9 made the financial position much worse. The present government now expects it to take until near the end of the next Parliament to stop the additional borrowing.

As the last Red Book showed, the UK economy has been one of the better performers since the crash, with gross value added recovering faster than Euroland and considerably faster than countries like Italy and Spain. The USA has performed better, thanks to cheaper energy, faster deficit reduction through spending cuts and a stronger banking system to finance a private sector led recovery.The UK’s figures will look better still in the next statement, given the srong upturn in growth.

Tomorrow I will look at the action I would like to see to curb spending and cut taxes.

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  1. Leslie Singleton
    Posted December 3, 2013 at 6:21 am | Permalink

    If there is any of the much blathered about austerity around then you could have fooled me. Every day there seems more traffic on the roads (immigration hardly helps) with at each junction, even minor ones in the country in darkest Essex where I live, having 13 cars from one direction, seventeen the next and nineteen behind and hooting. Yesterday I tried to do a bit of shopping in Saffron Walden, same as for last 30 years, and literally gave up, turned round and came home. It is no wonder the annual or even daily deficit does not go down never mind be reversed. Osborne only has it about 50% right (of course what Balls has to say or at least used to say is 200% nonsense).

  2. lifelogic
    Posted December 3, 2013 at 6:35 am | Permalink

    Indeed yet more tax borrow and waste. More tax increases mooted on Thursday too and Milliband to come on state soon.

    As you say the USA has performed better, thanks to cheaper energy, faster deficit reduction through spending cuts and a stronger banking system to finance a private sector led recovery.

    The UK needs all this plus far, far fewer regulations and fewer daft employment laws. Also a state sector that spends less, but spend what is does on sensible things for a change. Not spending on pointless wars, blocking the roads, bike lanes, bus lanes, trams, renewable grants, HS2, the disaster that is the NHS, payments to the feckless, corruption, fraud, train subsidies, the green deal …….

    • Hope
      Posted December 3, 2013 at 3:17 pm | Permalink

      The UK needs to get out of the EU ASAP, this would help all aspects of our commerce and our social life. From collecting taxes, what business can or cannot do, what companies the government can or cannot help, jobs, immigration, energy, finance, pensions, criminal justice etc the EU has its finger in every pie.

      JR has, once again, pointed out why it was financially a wasted vote to put Cameron in office with the Lib dumbs. Old Labour New Labour no difference. As we see with energy, this epitomises the stupidity of the coalition. Followed Miliband and gold plated his EU led energy ideas and now following Miliband to make cosmetic changes. Who is paying for the Cameron cronies to go on the China jolly? Only the EU can make a trade agreement with China, not Cameron.

    • Bazman
      Posted December 4, 2013 at 2:33 pm | Permalink

      This is not conclusive proof and many other external factors come into play. You propose that this is the reason why there so few woman at the top? Interesting how you would apply this ‘logic’ to race income or age? Are their brains different? Eugenics and biological differences are usually the bastion of bigots and simpletons looking for a versification of their views. It’s all a bit more complicated than the ability to read a map or throw a ball. Unlike your ‘logic’ that if you ride your bike to work you will ‘waste away’ if you do not eat more calories, such as additional steak, salmon and caviare washed down expensive wines with to power the bike. Neatly avoiding the fact that people eat far more calories than required, often in the form of cheap sugar and fat in cheap food and drink. Dig yourself a bit deeper into that one if you like.

  3. lifelogic
    Posted December 3, 2013 at 7:30 am | Permalink

    I read in the independent:

    Well what a surprise! One only has to watch people or children for a day or two to work that out.

    Will Cameron revisit his idiotic gender neutral insurance/annuities/pensions and the EU its whole absurd “equality” agenda. Might we just select on merit for the job please regardless of gender so industry can be efficient?

    • Tad Davison
      Posted December 3, 2013 at 4:33 pm | Permalink

      I know it’s a bit off topic, but my missus is one of the best drivers I have ever seen, (although she couldn’t navigate to the end of the street!). Were she to insure a car in her own right, she would effectively be subsidising some plonker who couldn’t care less, and that is fundamentally wrong. All in the name of political correctness. This rubbish has gone on for too long, but we can sit and talk about it all we like, whilst we are tethered to that lunatic asylum across the channel, there’ll be no end to it.


      • APL
        Posted December 4, 2013 at 7:10 am | Permalink

        Tad: “All in the name of political correctness.”

        Unfortunately, most of the PC rubbish is home grown. The French for example mostly laugh at the stupid things the British get up to in the name of ‘Equality’.

      • lifelogic
        Posted December 4, 2013 at 9:23 am | Permalink

        Indeed it is a huge and damaging distortion to the free market that will even cause deaths as people walk to work when (had they been able to afford the insurance) they would have driven more safely.

        Government knows best regardless of the statistics and the claims history. One the assume that next law will say that the disabled should pay the same premium too, so that blind drivers can then drive more cheaply.

        I see that someone in government has said cycling per mile in London is as safe as walking in London. What perhaps he should have said is walking in London is also, like cycling, some 50 times more dangerous than taking the car (in fact far, far more dangerous than driving while a little over the drink driving limit).

  4. alan jutson
    Posted December 3, 2013 at 7:45 am | Permalink

    Given all of the promises made, unbelievable.

  5. Richard1
    Posted December 3, 2013 at 7:56 am | Permalink

    Its early days but I do hope there will an opportunity for the eating of humble pie by all those neo-keynesian economists, so heavily promoted by the BBC (blanchflower, Stiglitz, Krugman etc) who were used to bolster the Miliband-Balls borrow even more policy, and who appear to have got the UK economy so wrong. By the next election, although there is much the govt should be doing which they aren’t (cutting taxes and junking green ‘crap’ etc), at least they will have trounced Labour in the economic debate.

    • lifelogic
      Posted December 3, 2013 at 9:46 am | Permalink

      Indeed do the BBC ever have sensible economists on? They are as rare and global warming realists, real scientists, optimists or rocking horse poo on the BBC.

      • Bazman
        Posted December 4, 2013 at 2:35 pm | Permalink

        The only science you see as real is the one that backs you views which are based on right wing felling and ideology it seems. FOX News tells the truth all other sources are wrong.

    • Roy Grainger
      Posted December 3, 2013 at 11:52 am | Permalink

      Did they get it wrong ? Osborne DID borrow even more and the economy recovered.

      • Narrow Shoulders
        Posted December 3, 2013 at 6:21 pm | Permalink

        Keynes did advocate borrowing to stimulate the economy which the Chancellor has most certainly done. I do not recall Keynes advocating taxing the cashcow middle earners to reduce the amount borrowed. That element of the austerity plan is pure coalition, sating Lib Dem need to punish aspiration without threatening the “wealth creators” and business whose labour costs are so heavily subsidised.

  6. Iain Gill
    Posted December 3, 2013 at 8:13 am | Permalink

    So the coalition is a failure in its main reason for existence…

  7. Acorn
    Posted December 3, 2013 at 8:52 am | Permalink

    Total Managed expenditure has been going down in real terms for the last three years??? (Table 8a Public sector expenditure on services by function in real terms(1), 1992-93 to 2012-13). Your capital spending reduction was considerably more than Labour planned, and that’s allowing for the accounting tricks in defining the word “capital”.

    Frankly, your second to last paragraph is nonsense. UK real GDP has yet to get back to the pre-crash levels! And this week we learn that households are spending there savings for consumption and taking on more debt. That is a repeat of what they did before the 2008 crash.

    Reply UK GDP figures have shown real rises in government current spending. The Coalition abated the capital cuts put in by Labour to a modest extent.

  8. Brian Tomkinson
    Posted December 3, 2013 at 9:14 am | Permalink

    JR: “The present government now expects it to take until near the end of the next Parliament to stop the additional borrowing.”
    That, despite, as I have said repeatedly, Osborne’s pledge to eliminate the structural deficit by 2015. Osborne reneged on his pledge on taking office and will be lucky if he matches Darling’s counter pledge to reduce the deficit by 50% by 2015. You might like to remind us of the interest payments we are all making through taxation annually for the still burgeoning debt. The figure was about £40bn, I think, when the coalition took office and is now above £50bn and of course rising inexorably along with the debt. To your credit you highlighted this soon after the early budgets. Your party lost my support then and will never get it back. I have seen clearly that the three main parties in Westminster, despite their pretence and rhetoric, are virtually identical. As a consequence, I feel that we have government in a virtual one party state. There are some in Parliament who have ideas and abilities way ahead of their party leaders. They are ignored, expected to show loyalty to their leaders and as good party members they do.

  9. lifelogic
    Posted December 3, 2013 at 9:40 am | Permalink

    I see that the coalition, despite all this vast expenditure cannot even teach our children basic sums, maths, literacy and science according to the recent OECD study. Not too surprising as the science books are full of silly & undefined concepts such as “renewable energy”, other global warming exaggeration drivel and other green cr**.

    Of course moving to rational English spellings would release a lot of time for them to learn some far more useful things than mere absurd & very inefficient notation. Perhaps they could even be encouraged to develop some actual understanding of science, economics, statistics, engineering, computing and maths for a change.

    It seems to me that the move to “qualified only teachers” where they all went to lefty teacher train colleges and learned about chunking, enforced gender equality, lack of competition and other nonsense was perhaps the start of the problem. What sensible science person would want to teach if they have to go to a lefty teacher training college for a year of indoctrination and then have to teach lies about renewable energy, global warming exaggerations and PC indoctrination.

    • Vanessa
      Posted December 3, 2013 at 11:38 am | Permalink

      Read Neville Gwynne’s Grammar – there is hope !

    • uanime5
      Posted December 3, 2013 at 11:34 pm | Permalink

      Not too surprising as the science books are full of silly & undefined concepts such as “renewable energy”, other global warming exaggeration drivel and other green cr**.

      In other words full of real science, rather than right wing ideology.

      What sensible science person would want to teach if they have to go to a lefty teacher training college for a year of indoctrination and then have to teach lies about renewable energy, global warming exaggerations and PC indoctrination.

      All teacher training colleges have to be approved of by the state. Also just because you don’t believe in global warming and renewable energy doesn’t change the fact that the science has shown that both are real.

      • libertarian
        Posted December 4, 2013 at 1:16 pm | Permalink


        So science is yet another subject about which you know zero. NOT ONE SCIENTIST has proved a link between AGW/Co2 and temperature rise.

        Its an untested hypothesis only, there is NO evidence

      • Hope
        Posted December 4, 2013 at 1:51 pm | Permalink

        Socialist drivel once more. Lots of evidence to say the opposite and you know it.

      • petermartin2001
        Posted December 4, 2013 at 11:46 pm | Permalink

        ” NOT ONE SCIENTIST has proved a link ” That’s true. Science does not work with proofs.

        “Its an untested hypothesis only, there is NO evidence” That’s not true. The balance of evidence is that the Earth is warming and it is due to humans emissions of GH gases.
        The GH effect has been know since the middle of the 19th century. The Physicist Arrhenius, who was certainly no lefty, was the first to identify human emissions of CO2 as a potential long term problem in the early part of the 20th century

  10. Bert Young
    Posted December 3, 2013 at 9:47 am | Permalink

    It is fallacious to believe that you can borrow your way out of trouble ; equally fallacious to believe that QE can smooth troubled waters . Once the mentality exists that debt is an ordinary way of life , the more difficult it is to instil controls and discipline . I was always brought up in the mantra that if you wanted something you saved first and , when you had enough , you bought it . Credit cards and the unbelievable mountain of personal debt as a result have created a condition of outlandish irresponsible thinking ; the attitude to the acquisition of property as a natural right emanates from this debt culture thinking . The Government should be setting an example and managing its expenditure rigidly ; the targets it sets must be in line with realistic revenues and much more tightening of its belt . Christmas will not be a happier place with an overabundance of presents .

    • Tad Davison
      Posted December 3, 2013 at 5:18 pm | Permalink

      Anyone ever read about how the economy used to work in the days of the good old pre-Fed ‘greenback’ ?

      There was an old song ‘I take my hat off to you Mr. Wilson’. If only people knew what that man set in train in 1913 with the creation of the US Federal Reserve!

      By contrast, here are some words spoken by US president Thomas Jefferson.

      ‘My reading of history convinces me that most bad government results from too much government.’

      ‘Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.’


      ‘It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.’

      – Thomas Jefferson

      Boy that Jefferson was a clever and prophetic man!

      Tad Davison


      • uanime5
        Posted December 3, 2013 at 11:41 pm | Permalink

        Here are some more Jefferson quotes:

        “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

        “A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.”

        “When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.”

        “For a people who are free, and who mean to remain so, a well-organized and armed militia is their best security.”

        “Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state.”

        “Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor.”

        In conclusion it’s somewhat idiotic to try and apply quotes about a society at one time to a completely different time and society.

        • Tad Davison
          Posted December 4, 2013 at 11:31 am | Permalink

          Make no mistake, and be under no illusion. I could take each and every one of those quotes and debate them with you as to how they relate to the present day, but alas, there wouldn’t be enough space, they’d drift off topic, and you wouldn’t listen to the answers anyway.

          But to keep this relevant to this thread, can I take it you’re quite ok with the situation regarding borrowing, perpetual debt, the US Federal Reserve, and poor countries being kept poor because of the way international finance works?

          • Tad Davison
            Posted December 4, 2013 at 5:16 pm | Permalink

            And just one further point, that might make you blush, ever heard of the words, ‘Thou shalt not kill’ and ‘Thou shalt not steal’?

            They come from much earlier, but I guess by your reckoning, they have no relevance in the modern context either.

            Is it not merely the case that you are consistently wrong, but try to compensate for that inadequacy by trying (unsuccessfully) to rubbish other people?

        • libertarian
          Posted December 4, 2013 at 1:18 pm | Permalink


          If what you say is true, why do you keep trotting out stuff from Marx and Keynes, both long gone? Just so we know what is the official amount of time between something being said that is true and it ceasing to be true due to the passage of time?

        • APL
          Posted December 4, 2013 at 5:20 pm | Permalink

          uanime5: ” Here are some more Jefferson quotes: ”

          Thus establishing that uanime5 can use google, well done fellow, now can I have the plot of atmospheric CO2 concentrations between 1913 and 1958 – remember, I kindly did half your homework, sourcing the plot since 1958.

          By the way, can’t see anything wrong with any of those Jefferson quotes.

        • zorro
          Posted December 5, 2013 at 4:29 pm | Permalink

          With the greatest respect, you do talk some absolute guff…..


    • petermartin2001
      Posted December 4, 2013 at 11:51 pm | Permalink

      “It is fallacious to believe that you can borrow your way out of trouble”

      I’m always puzzled as to how Governments are able to borrow back their own IOUs. If I give out an IOU I can either repay the IOU or I can ask the holder to hang on to it. But it doesn’t make any sense for me to ask to borrow it back. Wouldn’t I just be swapping an old IOU for a newer one?

  11. Pangloss
    Posted December 3, 2013 at 10:07 am | Permalink

    Although the coalition has been greatly preferable to the alternative, joy over a long overdue economic rebound seems overstated, at least for now. Real GDP is still 2.6% below peak, manufacturing 10% below peak in 2008 (or 2000 since it had only just recovered by 2008). These figures are self-extracted from the ONS labyrinth which, as others have also observed, seems designed to conceal rather than provide data. Hopefully they are correct. Outperforming Spain and Italy is hardly difficult. As for deleveraging, small amounts of ‘passive’ debt reduction by households and business has been more than matched by government deficits. It does not look too promising.

  12. Tad Davison
    Posted December 3, 2013 at 11:27 am | Permalink

    Borrowing troubles me, especially when one sees how vulnerable it makes us. We need to change to a different economic strategy altogether where we pay our way and live within our means. It wouldn’t be so bad if the coalition government were seen to be moving towards that, but I haven’t seen much evidence of it, and the title to this piece seems to support that view.

    Only yesterday evening, I was listening online to a US radio station and one guest was warning how a new financial crash could be ‘engineered’ so that assets could be snapped up at a premium. It warned not to leave oneself vulnerable by extending their debt, but as we have seen, not even countries are totally immune to the predators. It seemed that the EU actively encouraged indebtedness, as on the face of it, it made the place look bright, bubbly, and prosperous, but apart from the blinkered pro-EU people who refused to see the true picture, the rest of us always knew it was going to go pear-shaped sooner or later, because it could do no other. Debt has to be repaid, and with interest – full stop.

    The US could be facing another hurdle in the new year when they might have to raise the debt ceiling yet again, but I have read recently that China might no longer wish to hold more US debt. Thus, and to put it succinctly, if the US defaults, we could ALL be facing a new debt crisis.

    We just can’t go on like this. It’s madness!

    Tad Davison


    • uanime5
      Posted December 3, 2013 at 11:43 pm | Permalink

      I doubt China will cause a US default as their economy is currently dependent on selling things to the US.

      • Tad Davison
        Posted December 4, 2013 at 11:34 am | Permalink

        Interesting, because the information was from a VERY left-wing source, so it must be true!

      • petermartin2001
        Posted December 5, 2013 at 12:49 am | Permalink

        How can China can cause a default even if they want to? The USA has paid for what they’ve imported and the Chinese are keeping their money, about a $trillion, on account at the Fed.

        It would probably be a good thing, for all concerned, if the Chinese actually spent some of this money and moved to a more balanced trade relationship with the USA and the rest of the world. I’m sure Boeing would welcome an order for a 100 or so dreamliners!

  13. Vanessa
    Posted December 3, 2013 at 11:37 am | Permalink

    When will this poor country get rid of its bloated State ?

  14. Terry
    Posted December 3, 2013 at 11:56 am | Permalink

    Surely, we must be at the point of no return? Or very close to it. The ever increasing debt pile must reach a criteria whereby total repayment becomes impossible. Just look at how long it took for us to repay the USA for our war debt. Given the free aid we had provided to them over the past 30 years I would have thought they would have written it off but alas it was not to be.
    However, I just cannot see how increasing our National debt, year on year, is going to solve our financial problems. We are surviving solely, because of just one factor. Ultra Low Gilt Yields and the subsequential 300 year lows in interest rates. It will just take the free Bond markets to take fright and liquidate their holdings to create armageddon for all debtors. The resulting fallout will make the Banking crisis of 2008, seem petty. I believe the Government already know this will happen and the are praying it does not before May 2015. Are you feeling that lucky?

    • Ralph Musgrave
      Posted December 3, 2013 at 4:29 pm | Permalink

      “It will just take the free Bond markets to take fright and liquidate their holdings to create armageddon for all debtors.” If bond markets want to sell large quantities of Gilts, what of it? That does not increase the government’s indebtedness to anyone by one penny.

      As to the fact that such a sell off means the UK government has to pay more interest on new or rolled over debt, there’s a simple solution: DON’T BORROW!!! As Keynes pointed out, if government wants to spend more than it collects in tax, it can borrow or print money. Those two options are equally good.

      And the reaction of economic illiterates when they see the words “print” and “money” in the same sentence is boring to the point of tedium: they start hyperventilating about Mugabwe and Weimar. The reality is that as long as the amount printed is not so much as to cause excess demand, then there’ll be no excess inflation.

      • zorro
        Posted December 4, 2013 at 9:11 am | Permalink

        The question is do you trust the government’s to be any better at managing this than the government’s which you previously mentioned…..


      • Terry
        Posted December 4, 2013 at 11:44 am | Permalink

        Do you not realise that a collapse in Bond prices equates in a surge in their Yields? Furthermore, the BoE and Institutions et al have been buying up swathes of Gilts at ultra high prices. When their prices drop what will happen to their “investment”? And Government is still borrowing to pay off the interest on our outstanding debt -currently at £45 Billions per year when interest rates are at just 2%. What happens when those yields on new borrowings rise to 4%? £45 Billions could become £90 Billions, in interest payments alone! And when the Bond price falls below £100, the Government will be on the wrong side of the balance sheet. They will be paying £100 for something that is worth just say, £95, on the open market. So they end up paying more interest on the new loans and paying out more than the market price for the redeemed Bonds. And you don’t think there will be a problem? If QE really worked, every country in the world would be steaming ahead and increased debt would not affect them whatsoever. QE is a pyramid, ponzi scheme. Peter, the late buyer, pays for Paul, the early exiter. The smart money goes out with Paul leaving Peter to suffer the consequences. And you are right they wont be inflation problems, yet. However, there will be serious deflation -first see Japan and the Government cannot stop borrowing. It has a £45 Billion interest payment to make each year.

  15. Chris S
    Posted December 3, 2013 at 1:33 pm | Permalink

    To see that a Conservative-led government is allowing public spending to increase at more than three times the rate of inflation is really bad news for the taxpayer.

    Heaven knows what the figure would be if there were a Labour Government or, even worse, a LibDem coalition !

    Today’s announcement simply proves that :

    The Government has completely failed to get it’s message across that there aren’t really any cuts.

    This certainly isn’t any form of “Austerity” that an intelligent person would recognise.

    Put simply, after three years in power, David Cameron has not succeeded in reducing the size of the State in any meaningful way.

    How has this been allowed to happen ?

    We all know the answer, Cameron has not been tough enough to take the necessary steps to ensure that the Civil Service implemented the required reductions in public spending.

    Put it another way : Sir Humphrey has won.

    How very depressing.

  16. The PrangWizard
    Posted December 3, 2013 at 7:35 pm | Permalink

    Don’t worry. The Cameroon is in China with his begging bowl, and on his knees too before the Communist Leadership. At the same time as they are flexing their military muscle and beginning a policy of intimidation of their neighbours. They will come to our rescue though, all will be well. And it looks as if they may pay a big chunk towards HS2 Mr Redwood, how do you feel about that?
    I feel ashamed. That he and his like, and I do include the previous government, have brought us to this level of desperation. No doubt he will spin it as a triumph. We should all feel ashamed at his double standards too, but that’s another story. I’m not sure if he should be despised or pitied.
    I’ve been watching the debate in the Commons on the persecution of Christians around the world, and here too. At least there are some MPs who have principles and firm beliefs and are prepared to stand up for them. Cameron’s ‘principles’ are infinitely variable.

    • zorro
      Posted December 4, 2013 at 9:09 am | Permalink

      ‘Cameron’s ‘principles’ are infinitely variable’…….or more likely non existent.


  17. margaret brandreth-j
    Posted December 3, 2013 at 8:09 pm | Permalink

    This country would not be this country without it’s state. Give me any private interest which is loyal to Brits; globally all these companies would laugh, they would call us provincial in its derogatory interpretation.

  18. uanime5
    Posted December 3, 2013 at 11:50 pm | Permalink

    As the last Red Book showed, the UK economy has been one of the better performers since the crash, with gross value added recovering faster than Euroland and considerably faster than countries like Italy and Spain.

    Most of Euroland has recovered more of their pre-recession GDP than the UK, so the UK has been one of the worse performers. While we’re currently having stronger growth than Euroland we’re also having this growth three years later than much of Euroland. As this recent growth is also partially due to the chancellor ploughing billions into the housing market to encourage people to continue taking out larger mortgages, rather than a large increase in employment or manufacturing, it’s not sustainable in the long term.

    • Bazman
      Posted December 4, 2013 at 2:41 pm | Permalink

      Interesting that a short time ago we where like Greece and bankrupt but are now well on the way to recovery. As if.

      • Edward2
        Posted December 4, 2013 at 6:00 pm | Permalink

        We were never in debt as much as Greece were and thank goodness we had not joined the Euro, so our exchange rate and interest rates and money supply were still able to be adjusted by our own Government, rather than by the European Central Bank who may well have had the requirements of Germany and France as as a first priority.

  19. matthu
    Posted December 4, 2013 at 12:17 am | Permalink

    This is going to be a vote winner. I particularly like the new slogan:

    “No tax cuts until end of decade. Only when public finances are in surplus will ministers be able to cut taxes on middle class, Prime Minister says”

    That’s great! Now you can keep the green subsidies in place after all. Keep HS2 on track too. Keep a bail out in your back pocket for the EU as well.

    Don’t worry: that slogan is really going to catch on!

    (By the way, did you see the polling in Great Grimsby and Dudley North? Tories are neck and neck with UKIP and 70% of UKIP Voters did not even vote Consrvative at the last election.)

    Keep reciting that catchy slogan!

  20. Lindsay McDougall
    Posted December 4, 2013 at 2:39 am | Permalink

    Tax cuts? Only those that are likely to increase tax revenue because of reduced avoidance. These are reducing the top rate of income tax to 40%, capital gains tax to about 15% and corporation tax to 20%.

    Sorry to be such a spoilsport, but we are still running a huge fiscal deficit and the Coalition seems to be reluctant to cut spending further.

    • zorro
      Posted December 4, 2013 at 3:42 pm | Permalink

      The real reason why they will not tackle the deficit/debt is because they are petrified of being unable to deal with the social consequences…..


  21. Peter Martin
    Posted December 4, 2013 at 8:43 pm | Permalink

    “The UK in 2007 before the crash was already a high borrowing country. The cyclically adjusted deficit was 5% that year, compared to the US at 3%, Germany at 1% and Canada making debt repayments. ”

    There is a theory that the crash was actually caused by deficits worldwide being too low. The correct course of action when private debt looked to be increasing out of control would have been to increase interest rates and increase Govt spending.

    see for example:

  • 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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