IFS: Osbourne's cuts force a "fundamental re-imagining of the state"

[ianch99]

http://www.theguardian.com/politics/...ecognition-ifs

Gulp ...

[Osem]

I think we're in for that whoever is in power. I'd just prefer it wasn't forced upon us by others as a result of reckless decisions and mismanagement of the economy.

[ianch99]

Comments by Robert Peston:

The second is that the OBR has shone a very bright light on the implications of the Tories' pledge to generate a budget surplus by 2019/20 from spending cuts rather than tax rises.

It shows that that if a new Tory government delivered on its pledge to protect spending on schools and hospitals, the cuts for other public services - such as the police, courts, social services, local government and so on - would be so big as perhaps to defy credibility.

The OBR calculates that spending per head in real terms in 2019/20 on the public sector minus health and schools would be £1,290, or 57% less than in 2009/10.

[Ignitionnet]

Originally Posted by Osem

I think we're in for that whoever is in power. I'd just prefer it wasn't forced upon us by others as a result of reckless decisions and mismanagement of the economy.

It wouldn't have been. For all the rhetoric our borrowing is very, very cheap right now and our debt has been far higher.

Unfunded obligations on the other hand... aren't really going to get touched.

[Mr Angry]

It's interesting to see how the IFS and OBR are painting the real picture here.

What very few people have picked up on - aside from perhaps the IFS - is the fact that the EFO (Economic and Fiscal Oultook) report from the OBR (Office for Budgetary Responsibility) which Osborne relied upon and used selectively in his Autumn Statement contained the following statement;

"During the week before publication we produced our final forecast, incorporating the third quarter GDP data released by the ONS on 26 November and the final package of policy measures. We were provided with final details of most major policy decisions with a potential impact on the economy forecast on 25 November.
These were incorporated into our final economy forecast. On 28 November, we were provided Economic and fiscal outlook with details of changes to spending plans in 2015 - 16 – and the Treasury’s assumption for total spending growth from 2016-17 onwards – that would have had an effect on our economy forecast had they been provided in time. This has meant that in this EFO unfortunately our economy and fiscal forecasts are not fully consistent."

[Ignitionnet]

By the time this is done we'll have a smaller state as a proportion of GDP than the USA.

With the added bonus that we have ubiquitous health care free at the point of delivery.

Well, for now.

The rhetoric over Labour's profligacy is ridiculous given their biggest spending increase was the NHS, they doubled spending on it in real terms, and the government is promising to protect that spending.

EDIT: Incidentally I think not wanting to pass huge debts onto the next generation is laudable, however cuts of this scale are likewise potentially breaking the social contract.

EDIT2: Think I'll be going to Costco to check out CCTV systems, and testing the home alarm.

So our public sector spending, as a proportion of GDP, will be back to the Labour Government's spending levels in 2002 - I don't remember the world ending then.....

But at least we know we have well-defined plan for reducing the deficit from Labour, who will (apparently) create millions of well-paid jobs in the first parliament, thus raising tax revenues....

http://www.bbc.co.uk/news/uk-politics-30417955

• Stopping the winter fuel allowance for "the wealthiest pensioners"
• Capping child benefit rises at 1%
• Scrapping police commissioners
• Selling off "unwanted government assets".

He also said Labour would make savings of £500m in local government.

This includes merging some of England's 46 fire authorities and scrapping the New Homes Bonus, which rewards councils for the amount of homes built in their area.

Asked afterwards what more Labour would do to cut spending, he said that beyond the measures announced: "The right way to make these decisions is frankly in government".

[heero_yuy]

Originally Posted by Hugh

So our public sector spending, as a proportion of GDP, will be back to the Labour Government's spending levels in 2002 - I don't remember the world ending then.....

But at least we know we have well-defined plan for reducing the deficit from Labour, who will (apparently) create millions of well-paid jobs in the first parliament, thus raising tax revenues....

http://www.bbc.co.uk/news/uk-politics-30417955

I wonder how this miracle is to be perfomed, seeing as they manifestly failed to do it in 13 years of power?

[Osem]

Originally Posted by heero_yuy

I wonder how this miracle is to be perfomed, seeing as they manifestly failed to do it in 13 years of power?

Ah but this is Miliband's New New Labour, not Same Old Labour...

Originally Posted by Osem

Ah but this is Miliband's New New Labour, not Same Old Labour...

I think you will find it's New Old Labour, not New New New Labour....

[Osem]

Originally Posted by Hugh

I think you will find it's New Old Labour, not New New New Labour....

Whatever they're called the result will be the same old...

[Mr Angry]

Originally Posted by heero_yuy

I wonder how this miracle is to be perfomed, seeing as they manifestly failed to do it in 13 years of power?

Setting aside the anti Blair / anti labour rhetoric soundbites I recall reading somewhere that in the Blair years of 1997 - 2007 there were almost three million jobs created and a 10%+ increase in employment throughout the UK.

Not too shabby by anyone's standards.

[Ignitionnet]

Originally Posted by Hugh

So our public sector spending, as a proportion of GDP, will be back to the Labour Government's spending levels in 2002 - I don't remember the world ending then.....

2001-2 or 2002-3 Hugh?

In 2001-2 total managed expenditure was 37.19% of GDP, in 2002-3 it was 37.94%.

I make managed expenditure forecast in 2019-2020 to be 35.2% of GDP according to the Chancellor's plan.

Figures from the Autumn Statement in % of GDP:

[heero_yuy]

Originally Posted by Mr Angry

Setting aside the anti Blair / anti labour rhetoric soundbites I recall reading somewhere that in the Blair years of 1997 - 2007 there were almost three million jobs created and a 10%+ increase in employment throughout the UK.

Not too shabby by anyone's standards.

Oh contreau mon ami:

Most were low paid jobs taken by immigrants when the doors were thrown open. Hardly the high paid jobs that Ed Millibrain is referring to.

[Ignitionnet]

Originally Posted by heero_yuy

Oh contreau mon ami:

Most were low paid jobs taken by immigrants when the doors were thrown open. Hardly the high paid jobs that Ed Millibrain is referring to.

Strange that, for all these low paid jobs, the median wage in real terms was rising up until the financial crisis.