This was the thinnest Autumn Statement (mini-budget) in living memory. There was nothing new in it of any significance except the change from the slab system to the stepped system for stamp duty. But on the key issue which underpinned the whole statement, namely that this year the deficit is rising, not falling, there was a shock. Since admitting that the deficit will this year rise from £86bn to about £91bn, and then next year to around £100bn, was too much loss of face for Osborne to bear, he decided to resort to an enormous lie. He solemnly declared to the House that the cost of servicing government debt would fall £18bn a year by 2018-19. Economists have pored over the small print of this mini-budget, and without exception no-one has been able to find any evidence whatsoever to back up this claim. Osborne just made it up! He sought to explain this away by an admission of “an error in our forecast model” which led to “over-predicting the stock of debt over time”. Needless to say, this is gobbledigook. But this purports to allow him to bank £4bn of the £18bn this year, and thus save his fiscal bacon.
Apart from this outrageous invention which shows that, when cornered, you can’t believe a word the man says, Osborne did produce one other statement of potentially momentous significance. The slowdown and fall in tax receipts is expected to increase the deficit by £25bn during the next Parliament. The OBR then admitted that the only way Osborne could balance the books would be through shrinking the State back to the level of the 1930s. It predicted that, if Osborne’s spending cuts are carried through to the extreme degree he is now posing, total public spending will fall to 35.2% of GDP by 2019-20. The implications of this for the emasculation of public services are enormous. It is intended to return Britain to the Great Gatsby era for the top monied 5% while the bottom 50% are reduced to near-penury or forced to accept quasi-servile status in the employ of the great estates. Public services will be totally decimated and replaced by a fully privatised market system.
There is one other big lie in Osborne’s mini-budget. He constantly trumpets that he has halved the deficit since he came to office in 2010. The truth is that Alastair Darling brought in two expansionary budgets in 2009-10, the effects of which take 18-24 months to work through. In 2009-10 the deficit (at current prices) was £153bn, and by 2011-12 it had been sharply cut to £112.4bn, a reduction of over £40bn in 2 years. But 2012-13 the Osborne austerity budgets had begun to kick in, and the deficit went up to £119.4bn. In 2013-4 it fell to £98bn because Osborne eased up on austerity and launched the Help-to-Buy house price boom. This year, if as expected the deficit ends up around £91bn and then rises next year to around £100bn, Osborne hasn’t halved the deficit, he’s reduced it by about an eighth in 3 years (the difference between £112bn and £100bn). Can you believe a word this man says?