Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes.
 

More financial chaos.

"The Government will have to borrow as much as £75bn more than it intended over the next five years, delivering a damaging blow to Chancellor George Osborne’s hopes of claiming that the Government has the country’s deficit under control.


In Mr Osborne’s last Autumn Statement this Wednesday before the general election, his attempts to boast of the Conservatives’ economic record are set to be over-shadowed by new, bleak fiscal forecasts from the Office of Budget Responsibility (OBR). Collapsing revenues from oil sales, stamp duty and income tax mean the Chancellor will be forced to admit his plans to bring the deficit down could be knocked off track."


Indy

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Sadly whoever is in power there are going to be cuts , cuts and more cuts to try to claw back the deficit.:(

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

if labour get back in it will be spend it like its going out of fashion till its all gone again

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Sadly most of this debt burden will fall on future generations.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Here's what happens when you deal with a demand-side shock through supply-side economics based on dogma.

The stamp duty revenue fall also explains why some attempts to inflate a housing bubble were made. Oil is outside UK control, income tax is within control but requires a set of policies somewhat to the left of this government.

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Just as the bill for the investment in the country that hasn't been getting done will.

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So long as it's in investment not current spending that would be fine.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Fat chance of any of them thinking beyond 5 years at a time..:(

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

I don't think it's that big an issue really ,maybe in the world of politics but in reality not so much .Falling tax revenues are largely due to the low pay rates and rising allowance thresholds .The government should be putting pressure on companies to raise wages which would put tax revenues somewhere near where they should be .The government have done well with the economy and getting people back into work but those people may as well have stopped on benefits if they aren't paying any tax because their wages are so low

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Within a couple of years of the last election many people had conveniently forgotten the mess this country had been left in so expecting governments to plan and act in the long term when that's going to involve pain for the electorate in the form of more tax, austerity or whatever is asking a great deal IMHO. The truth is that far too many people expect far too much far too quickly these days and the politicians who get elected are increasingly those who simply tell people what they want to hear regardless of reality.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

I suspect that was more because we were wondering just how incompetent the government could get in that it inherited a growing economy and made the easy cuts, investment and capital expenditure, leaving the economy pretty much stagnant.

Yeah, shame the deficit grew prodigiously while George, with one eye always on 2015, ran the economy for political not economic ends. Now it's politically expedient to invest, it's good to bribe the electorate without pleading national poverty, it's happening.

What we're getting now is some of the recovery this government's policies stalled by 3 years.

You didn't seriously buy that stuff about how we would've become Greece if not for cuts, did you?

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

What do you mean "gone again"? It isn't back.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

By 'we' you mean you or the majority of the electorate? When the majority of people don't even bother to vote because they're fed up with the system I don't suppose ONS pontifications mean that much. You could be entirely right about what might have happened if, but that doesn't alter the reality that people don't tend to vote for long pain whether it's long term or short term when there's an opposition which promises more for less. The political colour of the promises is irrelevant to all except those who vote for the same party no matter what. At least I can go to bed knowing 2 things - I will vote and it won't be for the party I voted for last time.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Just heard he's going to reform Stamp Duty.

Seems to be following Scotland again.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Ed Balls' response has been abysmal so far. Absolutely abysmal.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

And some think he should be running the countries fiances from next year, god help us.:rolleyes:

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Improved as time went on.

Still digesting all the discussion.

EDIT: Cutting total public spending by 10% over the course of 4 years raises eyebrows.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

"Employment Allowance extended to carers"

No details as yet... but it sounds intriguing.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

If we wern't sending in our armed forces into countries behind whoever is in the Presidents office in USA and butt kissing we may not be in such a mess.

Theres no money for us in the UK, yet they always find money to replenish our weapons or to give to other countries.

I remember when Cameron gave the we are all in this together speach and said that there was no chance in raising the overseas aid budget as the UK could not afford to and within weeks he increased it by almost £1 billion.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Yes, there's no doubt in my mind that carers could do with a bit more help. Anyone who gives up a career to care for a loved one for any length of time is likely going to suffer the consequences long after their caring role has ended.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Any idea what it means ?

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

He has an impossible task.

Unemployment is going down, employment is going up, the economy is growing. You can argue that it should have been better than this, but Labour spent the first three years of this parliament predicting that it would be a whole lot worse - and it hasn't been. They don't look like a credible government-in-waiting and Balls know it.

edit

Oh, and all the carping about Tory cuts, Tory cuts, Tory cuts is about to come home to roost as well. You can't easily spend 5 years making out that cuts are the definition of evil, when you know you're going to have to go into the 2015 election acknowledging that you will ... er .. have to make quite a lot of cuts.

Of course, Labour bet the farm on things going so horribly wrong between 2010 and 2015 that they could get back into power almost by default. I wonder how they think that might work out for them now.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Yes just been listening to Balls being interviewed by Andrew Neil and when he wasn't answering questions about Labour policy with remarks about Tory policy, he was making quite a lot of fuss about all the cuts they're going to make. How very odd... :rolleyes:

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Not at all, just one line in the BBC report.

With the end of DLA looming and the "more directed" PIP taking its place, I fear a lot of disabled people and their carers are suddenly going to find themselves unaided by the State because many disabilities will be downgraded as "not severe enough" especially when the company replacing ATOS gets its orders (and loads of cash).

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It now says

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

I`m still no wiser to what it means. I`m only asking cause I`m a carer. Does it change anything for me I wonder.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

My carer and l at the moment cannot understand what this exactly means but its highly likely that the devil is going to be in the detail when we get that.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

It means that you can now employ somebody. and if you pay them less than £2,000 a year. then you don't have to pay NI contributions.

dog walker? cleaner? maid? escort?

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Except it's not true.....

From the BBC

https://www.cableforum.co.uk/images/...2014/12/45.jpg

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

For some strange reason every time I hear George Osbourne's voice I want to punch him in the throat.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Hugh, which part isn't true?

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

The extra £75 billion of borrowing.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

How so? (Sorry, this isn't my forte).

The BBC report you link to states "The forecast for borrowing next year has been raised from £68.7bn to £75.9bn, but the predictions for the years after that have improved."

Osborne was cited in 2010 as having said "...that he would commit to a mandate of removing the structural current deficit - which adjusts for the effect of the economic cycle and ignores investment spending - and start cutting into the national debt by 2015/16. However, he added that he would achieve this goal a year earlier than expected."

As far as I am aware he has not achieved this goal and will, as the BBC appears to confirm, have to borrow an addititonal £75bn to continue in his attempts to do so.That is, by definition at least, £75bn beyond what he had anticipated needing to borrow to get the job done. As I say, not my forte but happy to learn.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

The article stated he was going to borrow an additional £75 billion over the next five years - he has borrowed an additional £7 billion, bringing it up to £75 billion.

£68 billion difference.

The article implied that this was an additional £75 for the next five years, not comparing it to something he said in 2010.....

Also, the "new, bleak fiscal forecast from the OBR" - did they mean the ones that stated It's not good that we aren't going to meet the supplementary target, but not sure how meeting the main target is "bleak".....

Some more 'bleak' snippets from the report (which also shows some negative points as well).

In headline terms, the UK economy has outperformed our March forecast, with GDP expected to grow by 3.0 per cent this year and unemployment already down to 6.0 per cent.

GDP has increased more strongly this year than we expected in March, which has led us to increase our forecasts for growth in calendar years 2014 and 2015

We have also revised our inflation forecast down significantly, due to lower-than-expected outturns in recent data and the effects of lower oil and food prices. We now expect CPI inflation to remain below the Bank of England’s 2 per cent target until 2017. Meaningful real wage growth is expected to resume in 2015, although the measure of real earnings in our forecast does not return to its pre-crisis level within the next five years

On the Government’s latest plans and medium-term assumptions, we are now in the fifth year of what is projected to be a 10-year fiscal consolidation. Relative to GDP, the budget deficit has been halved to date, thanks primarily to lower departmental spending (both current and capital) and lower welfare spending.

In our first formal assessment, we judge that the Government is on course to keep spending on social security and tax credits (excluding the state pension and those benefits that vary most with the state of the economy) within the permitted margins of the ‘welfare cap’ it set in the Budget.


And for a bit of light relief...

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Doesn't sound so 'bleak' or 'chaotic' when you put it like that... ;)

On balance I'd prefer that to Balls' version of Brown's 'prudence'.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Thanks for that Hugh. The fact remains though that he will borrow, in the next year nevermind five years, £75bn more that he forecast he would be required to do to address the deficit in this parliament (which was his own target).

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

No, if I'm understanding the graph properly, he is saying he will borrow £75.9 billion next year whereas he previously forecast he would borrow £68.7 billion.

That is not "£75 billion more than he forecast". It is £7.2 billion more than forecast. He has required, very roughly, about 10% more borrowing than he forecast. Given the already vast size of our national debt pile, and the fact that Labour would cheerfully have borrowed rather a lot more than this in order to 'stimulate' the economy, I really don't think this is the howling great piece of incompetence the Tory hat3rz want it to be.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

I think what Mr. A is pointing out is that in 2010, the Chancellor said the budget would be balanced (so no borrowing required) - instead, the facts are he is borrowing £75 billion.

Two different ways of looking at it...

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Thanks for that Chris. I'm still somewhat unclear about this.

According to the Telegraph in 2010 Mr Osborne stated that he would commit to a mandate of removing the structural current deficit - which adjusts for the effect of the economic cycle and ignores investment spending - and start cutting into the national debt by 2015/16. However, he added that he would achieve this goal a year earlier than expected. The emergency Budget committed to some £40bn of annual cuts in the deficit by the final year of the Parliament, on top of the £73bn inherited from the previous Government.

As far as I can tell, and I'm happy to be advised to the contrary, he has managed neither of these stated goals and is continuing to borrow in an ongoing attempt to do so.

Therefore is it not a fair point made by the independant and others that this is additional borrowing beyond that which the chancellor obviously thought he required back in 2010 to honour his undertakings?

EDIT:

Sorry Hugh, I was posting as you posted. Yes, that's my line of thought on it - thanks for condensing and clarifying for me. I was getting bogged down trying to explain. As I said, not my forte. Thanks, sir.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Well it depends which forecast you want to refer back to. As Hugh pointed out, it transpires that if you go back to 2010, he did indeed predict he could balance the books by next year, and in that case, borrowing in 2015 will be £75 billion higher than predicted in 2010.

However, that forecast has long been superseded. Nobody today has been stunned by borrowing £75 billion higher than they were expected. Everyone has known for years that the books would not be balanced next year. Osborne has acknowledged that. Referring back to a forecast made in 2010 and abandoned (IIRC) in 2012 is just political posturing for the gallery by a shadow chancellor who has nowhere else to turn.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

It wasn't a forecast Chris, it was a committment. His first committment as Chancellor.

You're quite right, nobody is stunned at the Government having to borrow an additional £75bn - we're used to the financial incompetence and chaos of the current and past administrations.

Irrespective of what Balls or anyone else may or may not say the fact remains that that the target, whether superseded or not, was missed and, in all probability, was most likely never achievable by even the most optimistic of measurements.

That said, I'm not defending Balls or any other Government official, I'd just like to be clear about that.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Blue, red or yellow none of them have the ability to quickly resolve the countries problems because none of them have the courage to do what's needed and all of them always have one eye fixed on the next election. Osbourne has not been a good chancellor at all just because he may have been better then a worse option doesn't make him good, he's failed on everything he said in 2010 and I have zero reason to take him anymore seriously now. What were seeing is the fundamental flaw in our political system and no I don't know how to fix it but it would be good if those with the power at least started too.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

What is needed?

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

To just do the cuts in one phase covering no more then one parliament people can handle things a lot better if they know exactly how long the pain is going to last rather then this drip drip approach and I'd much prefer he just cut welfare to the extent he wants too in one go so I can then work things out and decide a course of action. We all know welfare is going to get hammered just get it over with instead of making every claimant worry all the time.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

Had they done that they'd have never had any chance of re-election. They'd also have devastated economic growth.

A slower approach to deficit recovery was required. The big thing that annoys me is that it took so long for them to realise that investment in capital expenditure was important having completely butchered it because it was politically expedient back in 2010.

I don't object to cuts per se, I object to where they were made and the rhetoric surrounding them. I'm also far from convinced that 88% cuts and 12% tax rises is the right ratio.

While previous generations' politicians completely failed to save for the ageing of a big demographic bulge and the current generation are going out of their way to save said generation from cuts where possible to gut the services some of the current working age population rely on while carrying on the current rhetoric is churlish.

Re: Autumn Statement: Bleak borrowing prediction rocks George Osborne’s deficit hopes
 

It's all bs and has been for a while we have growing problems that at best get temporary patches but we all know welfare is going to be hit so hit it and be done that won't cause too many problems as most of the public will cheer in the streets.