Tag Archives: Govt tax take falls

Osborne checkmated by his own austerity

Politics has a curious way of coming back to haunt politicians in a way they never intended or expected.   Osborne is a case in point.   The whole thrust of his austerity strategy, as he repeatedly told us, was to eliminate the structural deficit in this Parliament.   On that basis he predicted in 2010 that the deficit would be down to £40bn this year.   It is actually around £100bn.   Worse, the deficit is no longer shrinking at all, it is rising.   Alasdair Darling’s two expansionary budgets in 2009-10 set in motion economic stimulus which reduced the budget deficit from its peak of £165bn (at 2013-4 prices) to £115bn, a cut of no less than £50bn in two years.   Osborne’s austerity budgets then kicked in  and the deficit actually increased to £121bn in 2012-3, before falling to £98bn last year.   This year it is set to rise again to either just below or just above £100bn.   The whole deficit reduction programme, after all the impoverishment and pain it has inflicted, has gone pear-shaped.   It is worth asking why.
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