Tuesday, 29 November 2011

Osbourne's Autumn Budget Statement

I know everyone's going to be doing this today but I intend to liveblog from my lunchbreak while listening to the Chancellor's autumn budget statement. Sadly I don't have any fancy technology to help with the process so I'm afraid you'll have to keep refreshing your browser between 12:30 and 13:00. After than I'll just update it with a quick addendum and that will be that.

Don't forget, the setting for today's statement are predictions of the UK and the eurozone reentering recession but today is also a day where the markets have lowered the interest rate the UK will pay on government bonds (e.g. borrowed money). So that's the scene and the speech will be starting shortly.

12:32 Osbourne begins by saying how bad things are and that it's the fault of the eurozone and not the government.

Promisng investment and rebalancing the economy, standard guff.

12:33 Osbourne saying that OBR hasn't forecast UK returning to recession  but a slow down in growth which will then improve year on year. These figures could always be revised downwards though...

12:34 But if we do enter recession then it's all the fault of the euro crisis.

Also claiming credit for setting up the independent OBR...

12:35 Predicted low down in growth apparently due to "external factors" such as "unexpected" energy and food price rises.

12:36 And now Osbourne's shovelling more blame onto the last government for "unsustainable growth". Therefore situation is even worse than previously thought.

Now more about how bad it is and how it's all Labour's fault...

12:37 But don't worry, borrowing costs going to fall and therefore the government will spend less on interest rates than predicted

12:38 And this reduction in borrowing cost is only down to the government's action and therefore we'd be in a much worse situation.

12:39 Osbourne's saying that if we change our course then we'll be in a much worse situation.

 Admits that headroom has disappeared but claims credit for allowing headroom.

12:40 Now onto the meat. Effectively dmits that will miss deficit elimination by 2015 but will achieve surplus by 2016

12:42 More cuts coming... savings to be used for economic investment. This includes Clegg's youth job scheme.

12:43 Cuts to public pay and limiting increases to 1% after pay freeze ends. This will be well below inflation. Osbourne says will be better than private sector though.

12:44 Money saved from pay cuts will go back to treasury apart from schools and NHS where the departments will keep the money for use elsewhere.

12:45 Union bashing and telling the unions to call off the strikes. Effectively indicating that government won't change its pay offer.

12:46 Overseas aid budget to be preserved

12:47 Pensions to rise by Lib Dem triple lock

12:47 Disability benefits and child tax credits to also be increased in line with inflation

12:48 But scrapping additional previous plans rises above inflation

Hints at big increases in personal tax allowance (another LD policy) in the budget next year.

12:49 State pension age to be increased to 67 by 2026 - will save £59bn

12:51 Bank of England to be enabled to effectively do more fiscal stimulus through stuff like quantitative easing

12:51 Major programme of credit easing to be announced (leaked in yesterday's papers). Will be payed for by lowering BoE assest purchasing limit for small businesses.

12:52 Will be called national loan guarantee scheme and will be targetted at small businesses. Probably good but all measures like this take a while to see whether it worked or not.

12:53 Initiatives also aimed at medium sized businesses to boost investment in them. Will be increased if they work.

12:54 Osbourne now talking down expectations and not guaranteeing all of them will work. "Don't let the best be enemy of the good" - sounds reasonable to me.

12:54 Funds to boost development where planning permission already exists (targetted at housing marker).

12:55 Interesting stuff about increasing right to buy - each home bought will be replace by a new social house. Sounds reasonable.

12:56 Vickers banking commission report to be published soon. But will block EU financial transaction tax - stupid decision and damaging in the long term.

Increasing banking levy though - not to raise additional money but just to raise amount originally planned.

12:57 Will also clamp down on bank tax loopholes to save £.5 bn a year.

12:58 Announcing a national infrastructure plan - 500 projects to be announced. "Mobilising finance needed to deliver"

Tax cuts mentioned earlier will enable £5bn of public spending on infrastructure apparently.

12:59 Pension funds to provide £20bn of private investment.

13:00 Specifically talking about infrastructure plans which will benefit the north and the midlands. Trying to appeal to Labour voters.

13:00 South West Water prices to be cut significantly. Good news for Lib Dem voting areas...

13:01 Still no third runway to be  built, but more river crossings in London. My ex will like that...

13:02 More stuff about broadband and mobile phone expansion. Boosts for enterprise zones in northern England.

Well, I have to go now. Devil will be in the details so we won't really know what's going on until tomorrow. I like the infrastructure proposals and it's good that disabled and pensioners will benefit but the details of the cuts might dampen my enthusiasm. There's no indication that strikes will be ended soon judging from Osbourne's rhetoric.

Personally, I'm glad he's just announced (13:04) that more will be invested in scientific research and other stuff like that. I think this probably amounts as a signpost to a Plan A+ budget in April  which is what I always thought would happen. The government was always going to find that some of it's cuts and lack of investment would prove politically impossible. Giving up on this slightly was inevitable.

Unfortunately, he's also just signalled (13:06) that he'll water down green measures by £250 million tax relief measures for big polluters. Absolutely idiotic but it will appeal to the tory far right though. I'll miss the rest of his speech but I expect that it'll be a mix of good investment ideas and fairly short sighted red meat for tory backbenchers. Hopefully the Lib Dems will have limited the worst of them though.

I'll probably do more analysis later but I'm pleased that Osbourne has just announced that the worst ideas about limiting workers rights will go to further examination (where they can hopefully kicked into the long grass). Anyway. Got to go now.

As I said, more analysis later.

1 comment:

  1. Thanks for doing that George. It means I don't have to plough through endless newspaper stuff.

    It looks quite grim and on the basis that this is the forth downgrading, I'd be surprised if it doesn't get worse.

    I doubt that there won't be further strikes and demonstrations.

    Altogether not a bright future.


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