Thursday, 17 March 2016

Pre-budget letter

How ironic that a chancellor, who constantly criticised the previous government for "failing to fix the roof while the sun was shining", now finds himself having to make a further £4bn of cuts, in order to reach his target of a budget surplus by 2020. Why didn`t Osborne think of this before selling off some RBS shares last year at £1.1bn less than their value? Even after six years of being in charge, the economy is £18bn smaller than was thought, despite a monetary stimulus of £375bn of quantitative easing, which failed to kickstart the economy.
  In order, as Steve Richards says, "not to alienate voters before the referendum", this week`s budget will undoubtedly include announcements about long-term investment plans, like Crossrail 2, northern transport links and increased housebuilding, but such investment is years overdue; the truth is that the current state of the economy is the result of his misguided, and ideologically driven, economic policies (The only figure that matters this week is the majority of 12, 15/03/16). What his speech will not include is an admission that public spending on infrastructure is 50% less than what it was in Labour`s last year of government. Of course Osborne will blame a "cocktail" of foreign problems, for which, again, he should have planned, but there is no doubt where the responsibility really lies.
   With "a leadership contest to fight", there will be yet more privatisation outlined, but such a short-sighted "fast-buck" policy is typical of a chancellor, who should have been concentrating instead on preparations for the next, inevitable recession, by, for example, raising billions by reducing tax avoidance. His diverted profits tax is only intended to raise £600m, and not until 2019!

   Almost certainly, Osborne will repeat his "country can only afford what it can afford" mantra, but when interest rates are near zero, only the economically inept refuse to borrow. How "morally repugnant" is it to find that the roof is still leaking, and that the chancellor`s personal ambition dictates the country`s economic policy?

Additional anti-Osborne letter:
With your front page focussing on Osborne`s pensions` U-turn, because of "Tory fears of backlash from affluent voters", and the editorial concentrating on Facebook`s feeble fiscal attempt at "being thought cool" again, one thing is clear ( Chancellor backs down on pensions, 05/03/16): fairness is not going to return to our society, until our democratic system is reformed. As long as a government can gain an overall parliamentary majority with only 24% of the electorate`s support, it will always legislate with an overriding purpose of benefiting its supporters. Banks will still be considered too big to fail, there will still be "continued boardroom excess", and tax avoidance will remain rife (Facebook turns a new page but it`s too little too late,05/03/16). Facebook`s change of tune will neither make a significant impression on the Treasury`s coffers, or the firm`s profits.
     Despite the "common response" of disgust, Osborne knows his perpetual policy of promoting unfairness will keep that 24% on his side; the despair of the remaining 76% matters not a jot!


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