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What You Need to Know About Chancellor George Osborne’s Autumn Statement on the British Economy

Posted on the 30 November 2011 by Periscope @periscopepost

What you need to know about Chancellor George Osborne’s Autumn Statement on the British economy

Chancellor George Osborne with PM David Cameron. Photo Photo credit: Andrew Parsons/Conservative Party

UK Chancellor George Osborne’s Autumn Statement contained few surprises, but that hasn’t stopped the commentariat from coming out in force. The verdict? Things aren’t looking good for the British economy.

‘Almost uniformly bad’. Looking on the bright side, at least at first, an Independent editorial led with the “mildly better” news in the Chancellor’s Statement: the rise in fuel duty will be put back; many benefits will rise with inflation; and the Office for Budget Responsibility predicted that the UK economy will not slide back into recession. But apart from that, the editorial said, “the rest was almost uniformly bad”, particularly for the public sector, as this is one of the only areas where the chancellor can tighten spending. According to The Independent, the problem with Osborne’s strategy is that it lacks a sense of urgency: “Mr Osborne’s message to his hard-pressed fellow citizens boiled down to little more than the stoical injunction to keep calm and carry on.”

The BBC published a round-up of the key points of the Autumn Statement. These include a one percent cap on public sector pay rises for two years, rise in child tax credit to be halted and extra spending for schools.

Not radical enough. The Daily Mail was also unconvinced that Osborne was bold enough to tackle the crisis, characterising the Autumn Statement as “a list of tinkering initiatives which, at best, will have only a marginal impact on jobs and growth”. Unlike The Independent, however, the Mail editorial took the opportunity to call for a cap on immigration and an end to the minimum wage, and accused striking public sector workers of “strangling” the private sector.

Class war. “George Osborne’s autumn statement blatantly declares itself for the few against the many,” thundered Polly Toynbee on The Guardian’s Comment is Free, arguing that the poorer sections of society are bearing the brunt of the chancellor’s austerity drive while the rich few remain untouched. Toynbee branded Osborne’s public sector policies “a declaration of open class war”, particularly in light of the strike.

Banks to benefit. “The government is committed to subsidising, bailing out and rewarding the City of London – at grave cost to public sector workers, pensioners and private firms,” was Ann Pettifor’s verdict on the Autumn Statement, writing on The New Statesman’s Staggers Blog. Pettifor argued that Osborne has got it wrong: Britain is not facing a eurozone crisis or a debt crisis but a banking crisis, and unless the country’s political leaders recognize this, the economy will only get worse.

George Osborne announced that the stamp duty holiday will not be extended beyond March 2012, putting pressure on first-time buyers, according to The Guardian.

Cuts are brave. The Telegraph’s Jeremy Warner was concerned that the Autumn Statement focused more on stability than on encouraging growth. However, he praised Osborne’s decision to suggest further spending cuts by the end of Parliament as “remarkably brave”, given the potential reaction from voters. Warner argued that Shadow Chancellor Ed Balls is wrong to criticize the government’s debt reduction strategy: “It is a curious political argument that faults the Government on the one hand for borrowing far more than it had planned, while on the other suggesting that the solution is to borrow even more.”

Cuts are bad. By contrast, Robert Skidelsky declared on The Guardian’s Comment is Free that he agreed with Balls. “Trying to reduce the deficit by cutting spending and raising taxes means taking spending power out of the economy, when what a depressed economy needs is more spending,” he wrote.

Voters need results. Pointing out that less than half of respondents to a recent survey actually knew who George Osborne is, Daniel Finkelstein argued in The Times (£) that the details of the Autumn Statement will pass most voters by. “People judge how the economy is doing by their own experience and that tells them the situation is grim. Statements about growth are therefore seen mainly as providing an index of how in touch politicians are,” said Finkelstein.

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