Michael Meacher MP

It emerged in the Budget debate which ended today in the Commons that the need for spending cuts is far from the inevitability that Osborne has always claimed.   The independent OBR estimates of growth for the next 5 years, albeit recently scaled down, are still 1.7% this year, 2.5% next year, 2.9% the year after that, 2.9% again the following yeat too, and 2.8% in the fifth year.   That will produce, on the Government’s own estimates, an increase in national income of £185bn.   Governments always take about 40% of that in taxation.   The extra revenues therefore accruing to the Government over those f years is £74bn.    That is half of the current Budget deficit of £146bn and nearly three-quarters of the Government’s estimated structural deficit of £109bn.   What that means is that the Government, on its own estimates, will halve the Budget deficit in 5 years without making a single public expenditure cut at all. (more…)