Monday, 8 December 2014

George Osborne planning yet more austerity

My article in this coming week’s Cornish Guardian will focus on George Osborne’s autumn statement. It will be as follows:

There were a plethora of announcements in George Osborne’s autumn statement, which included future capital funding for a number of transport projects in Cornwall.

The infrastructure announcements – which have been widely welcomed – included £180 million for the dualling of two sections of the A30 in Cornwall (between 2015 and 2020) and improvements to the rail network. Nick Clegg even came to Penzance to announce funding for a study into the possibility of a breakwater near the town.

Cynics might say that there was a General Election on the horizon.

George Osborne pledged to reduce the deficit within the next parliament, but there has also been considerable focus on what he didn’t say.
Economists, journalists and anti-austerity campaigners have been lining up to challenge the Chancellor on his proposals. Many have argued that his sums simply do not add up and railed against what his plans would mean for public services across the United Kingdom.

The Institute for Fiscal Studies (IFS) challenged him to “spell out his deficit reduction plans,” which their research showed would lead to further cuts described as “colossal.” The IFS also pointed out that whereas £35 billion of cuts had been implemented, Osborne’s proposals equated to cuts of a further £55 billion. Others estimated that a further one million public sector jobs would be axed by 2020.

The Office for Budget Responsibility – a watchdog set up by the government – revealed that that the “cuts set out in Treasury assumptions” would see spending on the public services reduced to 35% of gross domestic product – a low level of spending not seen for around 80 years.

Put another way, Osborne wants to cut public spending to match that of the 1930s, a time of great poverty that pre-dated the creation of the National Health Service.

And as for Osborne’s own Business Secretary, Vince Cable, he damned the pronouncements as “implausible,” adding that the Chancellor’s “pre-election” spending commitments – which included £7 billion in tax cuts – could not be delivered.

The Government’s austerity agenda over the last five years has failed. The Coalition has failed to meet its own deficit-reduction targets– largely because it reduced investment too sharply, thereby reducing economic output and prolonging the length of the downturn.

Future governments need to change direction, to end austerity and to prioritise the protection of public services.

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