OBR Discredit
Coalition Claim
The OBR [Office for Budget Responsibility]
has blown the coalition myth of a big black hole in the deficit
out of the water. Jon Snow comments in his Snowblog
on the 14th June, ‘Nick
Clegg, the chancellor and the prime minister have lately all
been claiming that their initial look at the books has unearthed
various subterranean horrors lurking in the hidden cells of
the Treasury spreadsheets, hidden by a dying, desperate Labour
government.’ Now I suppose rather than
the usual smears and half truths coming out of the Coalition,
it could be that the news that ‘When
the deficit is lower in each and every year, and the overall
level of borrowing £32bn lower than at the March 2010
budget’, That the real subterranean horrors are that
the coalition have less of a reason to increase VAT.
The trio have also been claiming that the £155 Billion
is the highest ever deficit. They also claimed a few months
ago that the projected deficit of £180 Billion was also
the highest ever deficit, and
they claimed it was also grossly underestimated.
Does this sound like the old Tory concept of mud throwing,
or do they invent these stories to hide the bad news that
the previous government got it right, as the OBR indicates.
Or is it just Open and Fair
Government misleading the Electorate. Somebody
should take the trio to one side, and explain to them that
the whole World was plunged into recession, and several countries
are far worse off than we are, and it is time they started
to act like a government, not the mud throwing opposition
they used to be.
The OBR took into account the £44billion of cuts pencilled
in by the previous chancellor Alistair Darling, but
ignored the £6 Billion announced by George Osborne.
The OBR through Sir Alan Budd have proved
their ‘independence’. The report is hardly the
smoking gun that Number 11 might have preferred.
The conclusions drawn by the OBR, are broadly inline with
those of the previous chancellors forecast, indicating that
the Labour Government had set the right course for growth.
The OBR report clinically, where as the treasury, and the
previous chancellor built in a degree of caution.
According to Jon Snow :There are also three clear areas where
Sir Alan’s script seems closer to Alistair Darling,
than that of the Coalition.
Para 4.35, page 38: “These
[deficit] improvements are driven by … the policy measures
announced by the previous Government to reduce the deficit”.
Para 3.24, page 15: “Household
income was relatively strong through the recession as weaker
salaries were supported by tax changes such as the temporary
cut in VAT’.
Para 3.5, page 10: “Another
major area of uncertainty is whether, and to what extent,
private sector spending and employment are able to fill the
gap that the cuts in public spending in our forecast leave”.
The OBR forecast that unemployment will rise towards the end
of this year. Over the last six months, five of those months
have shown a decrease in unemployment. Earnings have increased
by 1.2%, driven mostly by the financial sector.
It is widely expected that George Osborne will increase VAT,
and reduce benefits for those most needing them.
Vic
Farron RFT
Express. Download the
OBR report.
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