Friday, 2 December 2016

Autumn Statement – austerity revisited

Sober reflection on the Autumn Statement confirms that the last six years of the Conservative’s (with Liberal Democrat support) so-called ‘long-term economic plan’, with austerity at the heart, have simply been disastrous for the short-, medium- and long-term health of UK plc.

George Osborne’s unique triumph as Chancellor of the Exchequer was to have missed each and every one of the economic and fiscal targets. These weren’t targets imposed by outsiders. These were the targets he had set himself.

The Autumn Statement ditched every one of the key forecasts that George Osborne had asserted in March this year:
  • Economic growth was revised downwards for both next year and 2018
  • Wage growth has been revised downwards, not just for this year and next but also for the three years to 2020
  • The National Living Wage is now going to be lower for the next 4 years, with an estimated 2.7 million workers seeing a direct total cut in their incomes of up to £1,324 by 2020
  • Business investment has been revised downwards for each year to 2020, and
  • Productivity has been revised downwards for next year and then in each year to 2020.
If all that weren’t sufficient bad news, the Conservative Party 2015 Manifesto pledged to double UK exports to £1 trillion by 2020. But the Office of Budget Responsibility has now confirmed that the Government is set to miss this target by £329 billion.
It isn’t surprising, therefore, that the UK deficit is expected to rise by £122bn by 2020/21, of which some £59bn is being directly attributed to Brexit.

Further, there was no additional money for
  • the NHS, experiencing its first real-terms cut since it was founded. It is no surprise that waiting-times and waiting-lists for out-patient and in-patient services are rising each and every day;
  • adult social care, which is approaching a crisis and exacerbating NHS problems as discharges from hospital are being held up because of a lack of community care support;
  • education, suffering its first real-terms cut since the 1970s. Little wonder that, in most schools, teaching and teaching assistant numbers are falling. It is just disgraceful that £60m pa is being diverted to the grammar school’s vanity project, which will do nothing for raising achievement or for social mobility.
It is not hard to understand why so many people are angry, concerned and worried about the prospects for themselves, their families and their communities.

To turn our country and our economy around will require a patient long-term investment strategy focused on exploiting our strengths in science, technology, and the creative industries. There is no sense that the current government has either the will or the policies to make this happen.