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Sunday, 9 December 2012
THE REAL TRUTH ABOUT THE ECONOMY
As ever, you had to scour the small print to find the bad news that George Osborne chose to leave out of his Autumn Statement. So here, complete with references to the OBR document, are the ten stats that the Chancellor would rather you didn't know, thanks to the New Statesman.
In deference to those who are sick of the sight of posh boy Osborne's face, I decided to use the face of his deputy, who presumably was aware of what was not being announced to the general public, and so is equally guilty of treachery. Actually, they have the same sort of smirk, don't you think.
1. The economy is expected to shrink in the current quarter, with the OBR forecasting a contraction of 0.1 per cent. (p. 48 OBR document). It states that "headline GDP growth is likely to be negative in the final quarter of 2012 as the effect from the Olympics reverses." The day before the last set of growth figures were released, Cameron boasted that "the good news will keep coming". It's now clear that it won't.
2. Despite the government's promise to "make work pay", sixty per cent of the real-terms cut to benefits (they will rise by just 1 per cent for three years) will fall on working households. (Resolution Foundation) A working family on £20,000 with two children will lose £279 a year from next April.
3. The recent fall in unemployment is expected to be reversed as the jobless total rises from 2.5 million to 2.7 million next year. (p. 83 OBR document)
4. Were it not for the inclusion of the expected £3.5bn receipts from the 4G spectrum auction - which hasn't taken place yet - the deficit would be higher this year (£123.8bn) than last year (£121.4bn). (p. 5 OBR document).
5. The measures announced by Osborne are expected to increase GDP by just 0.1 per cent over the forecast period. (p. 51 OBR document). This was no Autumn Statement for growth.
6. Earnings are forecast to rise at a slower rate than inflation until the second quarter of 2014. (p. 86 OBR document). By then, the median full-time wage will be 7.4 per cent below its 2008 level.
7. Public sector job cuts will reach 1.1 million by 2018 (p. 83 OBR document), reducing government employment to its lowest level in post-war history.
8. An extra 400,000 people will be dragged into the 40p tax band by 2015-16, paying an extra £117 per year.
9. The government is expected to lose £16.5bn on its stakes in the Royal Bank of Scotland and Lloyds, up from an estimate of £14.3bn in March. (p. 162 OBR document).
10. Osborne's decision to cut the top rate of income tax from 50p to 45p means the 8,000 people earning a million pounds or more will receive an average tax cut of £107,500 from next April.