30 Sep 2013

Tory conference: eye-popping Osborne

It transpires  that “turning the corner” on the British economy doesn’t change the view that much. George Osborne told his conference today that there is “no feeling of a task completed” and many more years of cuts ahead.

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His speech earlier this month declaring “a corner turned” was riddled with caveats, many of them echoed today. But in the coverage something got lost.

The deficit as an issue continues to slide down the list of voters’ concerns and there’s a view at the top of the Tory party that that speech on 9 September gave Ed Miliband the space to make a speech that barely touched on the deficit and promised frozen energy bills instead.

George Osborne is trying to put that right and to put some new rules to Labour which he hopes they will struggle to match. He says in years when there is growth, governments should operate in surplus.

The only years in the last 50 when a government has managed that are: 2000/01, 1999/2000, 1998/99, 1989/90, 1988/89, 1970/71 and 1969/70. And further back: 1955/56.

George Osborne suggested that Ed Miliband’s analysis that capitalism meant a race to the bottom was pure Marx.

But you have to wonder if the fuel duty freeze announcement (an aspiration to keep fuel duty frozen to the end of this parliament) was a late addition to the speech to counter Ed Miliband’s “retail offer” to voters on energy bills.

The truth is that no-one thought the Chancellor would use his last two budgets before the general election to let fuel duty merrily rip.

Quite what the new surplus rule would mean in reality and hard numbers isn’t clear but it means tight public sector spending rounds continue to the end of the next parliament.

The Institute for Fiscal Studies called the existing published plans “eye-wateringly tight” so the new plans are “eye-popping” maybe?

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