BUDGET RESPONSE: Britain Cannot Afford £40bn To Brussels
‘Spreadsheet Phil’, as the Chancellor is often laconically called, took to his feet knowing he had to deliver something spectacular. It was not only his but potentially the government’s future on the line. So, did he deliver? Certainly, ignoring the boorish jeering of the Labour benches, he upped the gag quota and the Prime Minister got in on the act, handing him at one point, a packet of cough sweets, to the return the favour Mr. Hammond did for Mrs. May at the Conservative Party Conference.
However, it is becoming increasingly clear that the joke may be on the government. Its reputation for economic credibility is being severely damaged by constantly missing its own targets and growth figures which are frankly tanking. Immediately, Sterling nosedived. In March, Britain’s economy was forecasted to grow by 2% – now that is down to 1.5%, next year it has been cut in the same time frame from 1.6% to 1.4%. It is the same year-on-year as the government fails spectacularly to deliver economic growth. No doubt it will point to optimistic figures showing government borrowing falling, however, these figures are in reality a triumph of optimism of will over economic reality. Borrowing is falling but it is not falling that fast and crucially, additional fiscal commitments made to the European Union are NOT included in the OBR’s latest figures. In regards to Brexit it plainly states:
We have therefore maintained the same broad-brush assumptions regarding Brexit that underpinned our November 2016 and March 2017 forecasts. [p39]
This is due to the understandable inability of the OBR to see what the outcome of negotiations will eventually be; in other words, the optimistic borrowing forecasts are based on growth forecasts that may well be once again revised down and don’t include any aspect of the money currently being offered at will to Brussels by Theresa The Appeaser. So, they are nothing more than a ballpark figure at best.
In response, John McDonnell rightly attacked the government for its record of abject economic failure, however, he was on shakier ground when outlining Labour’s even more fiscally outlandish solutions. It seems the solution to poisoning is to gleefully ingest more poison if you are to believe the Labour Party. As we well know, Mr. McDonnell and Mr. Corbyn would be even more supine when it comes to gleefully giving money to the EU, so they have little room to talk.
The shocking growth projections are in reality the headline story of this Budget as they reveal the extent of structural weakness in the British economy. It is this weakness that makes a £40bn spending splurge merely TO START trade negotiations with the EU not just treasonous but economically suicidal. Indeed, Mr Hammond has used this Budget to significantly loosen the fiscal constraints but there is no evidence any kind of clawback is being attempted.
Measures such as the abolition of stamp duty on properties, for first-time buyers, on properties up to £300,000 will surely be welcome as will the modicum of relief for public sector workers. However, nothing is being done about household debt, and still, government spending remains excessive and interest on debt payments is now at an eye-watering £49bn per year. Debt falling as a proportion of GDP has been predicated on GDP growth, growth that is now ailing.
Reduction of government expenditure need not hit the vulnerable. Bill Etheridge MEP, in his response to the Budget, pointed out:
“The Taxpayers Alliance have identified 400 quangos as expendable, yet they are seen as an easy way for a government department to pass on any blame for failure.”
As Mr. Etheridge put it, the political elites continue to have their nests feathered, and we continue to feather Eurocrats nest through excessive spending while ordinary, hard-working people pay the price. It is time for that to end and UKIP must be the Party of ending it.