Ten Questions for George Osborne arising from the fiscal horror show in his own document:
Times like this you have to credit Osborne hugely for creating this independent budget watchdog. Great transparency. But he’s paying in pain. As I said yesterday, the OBR document is probably the most unwanted piece of independent advice since Thomas Becket’s suggestions to Henry II.
Here’s ten questions that arise for the Chancellor from the fiscal horror show that is the OBR document. Let’s hope our colleagues at Daybreak or BBC Breakfast pin him down on this stuff.
1. You are announcing unspecified massive spending cuts for the next parliament to meet your target. Isn’t this exactly what you criticised Labour for?
2. If extra capital spending now is a good idea, why wasn’t it a good idea a year ago?
3. All your borrowing metrics are worse than every other major European country (pg 168 OBR), apart from the Italian national debt. There is a near 9 percentage point increase in the national debt in 2016. If the eurozone is to blame, why does the OBR report downgrade UK growth and upgrade European growth? Is the UK more sensitive to the Eurozone, than the Eurozone itself?
4. The Coalition Plan in June 2010 presumed 3.6% growth in the six quarters since you were elected. You’ve had just 1%. Would you have pursued this policy, knowing that growth would be so poor?
5. The Youth Contract will deliver no net new jobs, says the OBR, merely employ young at the expense of the old. Why spend a billion?
6. You claim that £22bn has been saved in lower gilt yields. The OBR show (Table 4A) that the majority of that is no saving at all because low interest rate mean lower taxation. Is a total saving of £7.4bn really enough to justify policies contributing to a huge rise in unemployment?
7. DMO head Robert Stheeman points towards Bank of England Quantitative Easing rather than the Govenment fiscal plan as the driver behind low gilt yields. Is that not the reality?
8. Fitch has just said that Britain is the AAA nation with the highest national debt. It was rather premature for you to boast about securing the AAA wasn’t it?
9. On page 73 of the OBR it says: “Its not until 2014 that we expect earnings to rise faster than prices by a significant margin”. Would it not be better to tell the British public that your policies are contributing to this squeeze?
10. in your speech you said: “RPI +3 per cent is too much…” of an increase for train fares. But isn’t that exactly what you did this year?