29 Nov 2011

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?

Follow @FaisalIslam

11 reader comments

  1. Treatathon says:

    I stopped at the ridiculously stupid first question where Faisal is seeks specificity on cuts from 2015 onwards when Labour couldn’t deliver specificity on next week’s cuts in their 2010 election campaign.

    1. Steven Van der Werf says:

      attacking the previous government stops working when it becomes clear your own performance is utterly miserable.
      Osborne has made nothing but mistakes. His every forecast has been downgraded, none of his plans have worked.

      absolutely *none*

      you really can’t blame that on Labour. It abundantly clear that Osborne is a dreadful Chancellor – actually worse than most feared and many expected.

  2. Citizen Smith says:

    Question 11
    Isn’t Osborne just rearranging the deck chairs on the Titanic.

    Question 12
    Isnt the real problem that needs to be discussd is private debt?

    Question 14 and 15
    why did 40% of the MPs walk out of the Commons at the end of Osborne’s speech? ….. is it that they dont take this debate seriously?

  3. pierregonzalez says:

    And if you add to the picture that this is not showing the all truth , you understand why George Soros said that the real situation of the UK economy was worse than the Spanish one .

  4. Meg Howarth says:

    Question 11

    Why won’t you introduce LVT land-tax? LVT, which would replace the ludicrously unjust council tax, would:

    – reduce property-price inflation – through reduction in the social evil of land-banking (keeping property/land unused while awaiting further price inflation);

    – reduce tax evasion, something to which you say you’re committed. Land can’t be hidden or off-shored;

    – reduce second/multiple home-ownership.

    I understand LVT could be introduced within a five-year period. Meantime, will you remove completely the 50% council-tax discount on second/multiple homes? Subsidising the rich and better-off hardly fulfils your leader’s mantra that ‘We’re all in it together’.

    Question 12

    Why don’t you remove the existing builders’ subsidy and environmentally irresponsible zero VAT on demolition/new-build (refurbishment incurs VAT) instead of granting the building lobby a further tax-payer subsidy (recently announced by your inept colleague, housing minister Grant Shapps?

    1. Ian Tutty says:
  5. Philip says:

    Well done Faisal. What chance do you reckon of getting honest answers? 1 in a thousand?

  6. CEMF says:

    There must be a link between the state of the UK economy and pre-eminence of finance/landlord class in this country. That we also still have an economy that cycles from boom to bust. The tax system in this country encourages land speculation, credit booms, the use of tax havens etc. We need to move away from the current over complicated, unfair and ultimately ineffective tax system to one that recognises that a tax or payment for the environmental, social and economic benefits from land. The tax system is set up to favour big finance, at the top end they can dodge at the other end they are engaged in a land grab through mortgaging and rent.

    A Land Value Tax is the only way to navigate out of this mess.

  7. e says:

    And finally, he could be asked: what do you see as the future for politics in a market ruled economy?

  8. Andrew Dundas says:

    Your question 5 – about substituting young for older workers – suggests that Osborne is reverting to the Age Discrimination Policy of the Thatcher-Major years.
    Should this be referred to an Employment Tribunal?

  9. neighbourhood volunteer says:

    Question 11
    How can cutting more and sacking a further 710,000 public sector workers lead to growth?
    Question 12
    Why have you scrapped environment protections? building houses hasn’t resumed although you ordered that all development proposals must be allowed.

Comments are closed.