Has Osborne magicked up an economic downturn to justify more cuts?

George Osborne (left) talks to the Chinese vice-premier Ma Kai in Beijing [Image: Kim Kyung-Hoon/Reuters].

It’s the Conservative Government’s biggest U-turn yet – and to This Writer, it appears to have been planned.

Remember the Autumn Statement, in which George Osborne struck such a triumphant tone because the Office of Budgetary Irresponsibility had magicked up £27 billion of extra money for him in a prediction over the next five years.

Only three months later, two-thirds of that cash has been magicked away by the same organisation and suddenly Osborne is saying that he may not be able to deliver a budget surplus by 2020 after all.

Not only that, but the downturn means he may be unable to relax austerity in the last two years of the current Parliament, as the Conservatives promised us all in the run-up to the general election last May.

Suddenly the promise has gone from “happy days in a couple of years’ time” to “more cuts, more austerity, more pain”.

And it’ll be the poor who have to pay for it, of course.

But isn’t this what the Conservatives wanted all along?

They hoodwinked us all with some pretty figures that forecast better times, but the plan has always been to keep cutting until the NHS has been privatised, the welfare state destroyed, and everything else but the courts and defence have been sold off – not even to the highest bidder but to Conservative Party donors.

David Cameron said as much in a Telegraph interview, all the way back in 2011 or thereabouts.

Osborne is seeing it through.

George Osborne has warned he may have to impose bigger than expected cuts to public spending towards the end of the current parliament as the “storm clouds” in the global economy hit economic growth.

In a move to prepare the ground for a sharp deterioration in the public finances in the budget next month, the chancellor said the recent fall in nominal GDP numbers showed the British economy was smaller than expected.

Osborne, who signalled that the cuts would come from efficiencies in government spending, also indicated that he might adopt a flexible approach to his target of delivering an overall budget surplus of £10.1bn by 2019-20.

The chancellor made clear that he might have to embark on a change of course in his budget on 16 March when he warned of global “storm clouds” in an interview with the BBC at a meeting of G20 finance ministers in Shanghai.

John McDonnell, the shadow chancellor, said: “This is a total humiliation for floundering George Osborne. He has sneaked off to China to admit what Labour have been saying for months, that his recovery is built on sand. Far from paying our way, Osborne’s short-term economics means Britain is deeper and deeper in hock to the rest of the world.”

The chancellor spoke out after the latest nominal GDP numbers released by the Office for National Statistics showed that the cash size of the economy was 1% smaller than previously assessed. That represents a fall of £18bn.

Source: George Osborne warns of further cuts as ‘storm clouds’ gather | Politics | The Guardian

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9 thoughts on “Has Osborne magicked up an economic downturn to justify more cuts?

  1. jeffrey davies

    he takes to much of the white stuff britain hasnt risen out but gone backwards wuth the tories even selling of the silver ware was wasted

  2. Mr.Angry

    Agree totally “he is preparing the ground” this individual truly believes we are all so stupid to accept his “bull***t.

    It’s at the point where you can actually forecast his next move and destruction of the society we once were.

    Oh! and I am sure there is a lot more to expect whilst they remain in the driving seat.

  3. Rupert Mitchell (@rupert_rrl)

    If Osborne hadn’t sold off so many of OUR nationalised assets (industries and railways etc) to his pals and overseas buyers, we would not be in this dreadful state as we would still be benefiting from the productivity of our own industries.

    I notice that he makes no mention of cutting his or any of the Cabinet’s benefits, but still rubs salt into the wound by giving them even a further rise while cutting payments to those fully entitled to them; many of whom are in dire need. If the Cabinet is really so certain that AUSTERITY is necessary let them cut their own wages as a small sign of sincerity for once rather than giving themselves rises while cutting just payments to those in need.

    Well the great British Public just about managed to help this lot back in and if they want to return to a proper life with pride in their country I hope they won’t be so apathetic or make the same dreadful error of judgment a second time.

  4. mohandeer

    Mike. You might want to take a look at a blog by Richard Murphy: http://feedproxy.google.com/~r/org/lWWh/~3/07vqCfc6vDo/?utm_source=feedburner&utm_medium=email
    I refer you to some interesting comments, Kitty Sue has made some remarks and will no doubt be expanding further.
    Another blog by the Yorkshireman has some interesting facts and figures:
    BTW. One of the comments refers to Osborne’s pronouncements to the Chinese whereby he actually outlines a policy direction which would see the UK buy less of China’s exports, which must have gone down like a lead balloon.
    Your intro. on this post is almost prescient and in line with the comments of the above mentioned blogs and I’m sure KSue will back your thoughts up emphatically.

  5. Gavin Proctor

    I don’t think Osbourne has the wherewithal to “magic” up an economic crisis, I just don’t think he’s smart enough to see it coming. Confidence in the UK has dropped by just mentioning leaving the EU (I’d hate to see the fiscal damage if we actually left), China is slowing down, Canada is entering recession and Europe is dragging it’s heels still.

    Should Osbourne have seen all this coming, yes, does the fact that he didn’t see this coming act in itself as a damning judgement on his abilities as a chancellor, yes. My headline for this isn’t that Osbourne has power and can manipulate problems, it’s that Osbourne is incompetent and can’t see them coming.

  6. Spamlet

    It’s irrelevant what the ‘cash size of the economy’ is anyway. What matters is how it’s distributed: a bigger bonfire of resources, is just burning up all our descendants’ futures, just for the sake of playing childish ‘king of the hill’ games with other nations, that have equally childish leadership.

    Economics (derived from ‘house keeping’) should be about making efficient use of what you have: not seeing how much you can grab from somewhere else.

    1. Malcolm MacINTYRE-READ

      A couple of years back, a number of economists admitted that economics, as currently practiced, cannot actually predict what is going to happen, but only surmise.

      Not only does that explain Boy George’s incompetence (and “good” = ME, while ‘bad” = THEM) but also that everyone else’s, i.e., you, me, and…. ad infinitum, GUESSES are equally valid.

      Let’s all go and twiddle our thumbs… far more productive.

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