Autumn Statement: Hunt Does Not Rule Out Income Tax Cuts

Chancellor Jeremy Hunt has not ruled out cutting income tax in Wednesday's Autumn Statement, as he insisted economic growth was his priority.
Read the BBC aricle here.

This man is trying to take credit for bringing inflation down. He shouldn’t. Inflation is still raging. Any decrease in inflation so far has happened because energy prices have come down, prices over which he has no control. There has been little or no decrease in inflation as a result of Hunt’s efforts. He is merely trying to hoodwink the electorate.

The main reason for the sharp drop in inflation as measured by the consumer prices index was that the increase in energy prices in October 2022 was not repeated. Gas prices fell by 7% last month, having risen by almost 37% in the same month a year earlier. [Source: The Guradian]

Further, if Mr Hunt is wise, if there is any room for tax cuts, he should aim those tax cuts not at the superrich, but at the man in the street. And if economic growth is your goal, encourage spending on consumer goods, not superyachts and private jets! If you bring about tax cuts for the wealthy at this time of great hardship for the many, the elctorate will never forgive either you or the Tories.– © Mark Alexander

Hunt Will Back More Interest Rate Rises Even If It Pushes UK [in]to Recession

THE GUARDIAN: Chancellor to support Bank of England’s decisions because ‘inflation is a source of instability’

Jeremy Hunt said he will back further interest rate rises by the Bank of England, even if it risks plunging the UK into recession, in order to combat soaring inflation.

The chancellor’s comments come after figures this week showed annual inflation in April was higher than expected at 8.7%, raising the prospect of a 13th interest rate rise by the Bank of England. Markets are now predicting that interest rates could climb to 5.5% by the end of the year, up from their current level of 4.5%, putting further pressure on borrowers and the housing market. » | Kalyeena Makortoff | Friday, May 26, 2023

Chancellor Philip Hammond Responds To Economic Drop

A flash estimate for July showed a "dramatic deterioration" in the UK economy to its worst performance since early 2009.

Ed Balls 'Daunted' by Chancellor Task

BBC: Ed Balls has told me that he is "daunted" at the prospect of becoming Chancellor of the Exchequer, given the scale of cuts a future Labour government may have to make.

I put it to the shadow chancellor that he would have to make spending cuts deeper than those made by any government since the war (other, that is, than the coalition itself) - deeper than those made by Labour Chancellor Denis Healey in the 1970s and Margaret Thatcher's Tory government in the 1980s.

The Institute for Fiscal Studies estimates that Labour's plans would imply about £18bn cuts to departmental budgets, since spending on pensions, welfare and debt interest is rising at the moment.

Despite this Mr Balls insisted that the government was wrong to save £200m this year (and £400m in the year after) by refusing to give pay rises to 600,000 NHS staff already receiving automatic pay increments. » | Nick Robinson, Political editor | Thursday, March 13, 2014

Osborne Wants to Take Us Back to 1948. Time to Look Forward Instead

George Osborne, Chancellor of the Exchequer

THE OBSERVER: Plans in the Treasury's autumn statement to return state spending to 1948 levels will do permanent damage to Britain

It is an incidental sentence, but it brought me up short. By 2018, general government consumption will be proportionally no larger than it was in 1948. So declared the Office for Budget Responsibility in its report accompanying the autumn statement. The work of three generations in building the sinews of a state that support systems of health, transport, education, environment, policing, science and the rest is to be summarily withdrawn over the next five years. It is a landmark moment in our national life.

Next year the coalition – deputy prime minister Nick Clegg supporting Cameron and Osborne – is aiming to legislate that the reduction of the deficit on this scale and speed should be a statutory obligation. Stunningly – apart from some allegedly effective new measures against tax avoidance, and asking non-residents to pay capital-gains tax on the sale of their homes – all of the work is to be done by cutting spending, by a cumulative £75bn in ways yet to be specified.

The IMF, after assessing the experience of 107 countries between 1980 and 2012, recommends that, after a credit-crunch deficit, there should be a balance between tax increases and spending reductions. In Osborne-land over the next five years more than 95% is to come from spending cuts – a global first in self-harm. » | Will Hutton | Sunday, December 08, 2013

Living Standards to Be Lower in 2015 Than in 2010, IFS Warns

George Osborne, Chancellor of the Exchequer

THE GUARDIAN: Delivering its judgment on George Osborne's autumn statement, Institute for Fiscal Studies backs claims by Ed Balls that family budgets are being squeezed hard

Britain's leading experts on tax and spending have said that living standards would be lower at the end of the current parliament than at the start as they backed claims by the shadow chancellor Ed Balls that family budgets were being squeezed hard under the coalition.

Delivering its judgment on George Osborne's autumn statement, the Institute for Fiscal Studies took issue with the way Labour had calculated its estimate of a £1,600 loss to the average family in the three years since the coalition came to power in 2010 but said it was "pretty consistent" with survey data showing a big drop in household incomes between 2009-10 and 2011-12.

Paul Johnson, the IFS's director, said there was a lack of reliable figures for the current year, but added: "We do know from household surveys that income fell sharply in 2010 and 2011. It is almost certainly significantly lower now than it was in 2010.

"And while it should start to grow it will surely still be below its 2010 level by the time we get to the election in 2015." » | Larry Elliot and Philip Inman | Friday, December 06, 2013

George Osborne: ‘Second-rate Britain’ Needs to Be More Like China

George Osborne in China

THE INDEPENDENT: Chancellor dismisses suggestions that China has a 'sweatshop' economy and wishes Britain would be more like the communist country

Britain is no longer great, is defeatist and unambitious and needs to be more like China, the Chancellor has said.

In an astonishing trashing of his country’s attitudes, George Osborne added that Britain had lost its “can do” approach and had been relegated to the status of a “second-rate power”.

He was speaking at the end of a five-day trip to China in which he had been awed by the speed and scale of China’s economic development.

Dismissing suggestions that China has a “sweatshop” economy, he said he wished Britain would be more like the communist country.

“I also feel a bit like, my God, we’ve really got to up our game as a country, and the whole of the West has to understand what is happening here in Asia,” the Daily Telegraph reported him as saying. » | Lewis Smith | Friday, October 18, 2013

Chancellor George Osborne Joins Twitter on Budget day and Is Immediately Hit with a Wave of Abuse
THE INDEPENDENT: The new @George_Osborne account launched earlier today

Not content to simply suffer the scrutiny, ranting anger and mischief-making of the House of Commons, George Osborne has used Budget day to join Twitter - and has been immediately hit with a wave of insults.

Like an army of backbench hecklers, Twitter users subjected the Chancellor's new @George_Osborne account to a torrent of abuse, despite the fact he has currently posted only one tweet: “Today I'll present a Budget that tackles the economy's problems head on helping those who want to work hard & get on.” » | John Hall | Wednesday, March 20, 2013

Coalition 'Most Unlikely' to Meet Key Economic Goals by Next Election

THE GUARDIAN: Conservative thinktank says government has no hope of eliminating deficit and only slim chance of cutting debt by 2015

The coalition is "most unlikely" to meet its two key economic goals before the general election, a conservative thinktank says.

In a report published on Monday, the Centre for Policy Studies (CPS) said the coalition had already given up hope of getting rid of the structural deficit by 2015 and that the chance of ensuring that public-sector debt is falling by the time of the next election is now slim.

The CPS, whose claims are rejected by the Treasury, also said the government's problems were exacerbated by the fact that many people do not understand the difference between debt and deficit and that they will be shocked to learn that debt (the historic total owed by the nation) will be around £600bn higher in 2015 than it was in 2010 even though the deficit (annual borrowing) will be lower.

The coalition "will be vulnerable at the next general election when opposition parties could argue that the huge increase in debt is primarily the result of economic incompetence", the CPS report said. » | Andrew Sparrow, political correspondent | Monday, August 27, 2012

George Osborne Under Attack as Britain's Recession Deepens

THE DAILY TELEGRAPH: George Osborne faced calls from business leaders to do more to kick-start Britain’s economy on Wednesday after official figures showed that the country has fallen into the worst double-dip recession for more than 50 years.

The economy shrank by 0.7 per cent between April and June, the Office for National Statistics said. It is now smaller than when the Coalition came to power in 2010.

Since then, the Chancellor has pursued a strict policy of austerity – “Plan A” – in an attempt to bring down the deficit, leading to accusations that he has not done enough to stimulate growth.

Wednesday’s fall was worse than expected and means that Britain is firmly back in recession, with negative growth for the past nine months.

Amid a growing clamour from business groups for radical action, one senior Conservative figure admitted that the economy was likely to be in “intensive care” for another two years.

Vince Cable, the Business Secretary, called for a “Plan A plus” as he suggested that austerity alone was not enough to bring the country out of recession.

Business groups want extra help for companies struggling to raise money, a more radical infrastructure plan, a National Insurance holiday for employers and assistance with local business rates.

Small business organisations also called for political parties to work together in a “grand national bargain” to stop Westminster disagreements undermining the economy. Read on and comment » | Robert Winnett, and James Kirkup | Wednesday, July 25, 2012

THE DAILY TELEGRAPH: Vince Cable: I would 'probably' make a good chancellor - but I'm backing George Osborne – Vince Cable, the Liberal Democrat Business Secretary, has admitted that he would like to be chancellor but said he was backing under-fire George Osborne to stay in his job as the OECD tells Britain to stick to Plan A. » | Rosa Prince, Online Political Editor | Thursday, July 26, 2012

George Osborne Is a 'Work Experience Chancellor' Who Should Be Moved in Reshuffle, Says Senior Lib Dem
George Osborne is a 'work experience' Chancellor, according to senior Lib Dem Lord Oakeshott as Michael Fallon, deputy chairman of the Conservative Party, admits the economy is in "intensive care".

Read the article here | Christopher Hope, Senior Political Correspondent | Wednesday, July 25, 2012
THE GUARDIAN: George Osborne reeling as economy enters the disaster zone: Chancellor urged to rethink austerity plan by business, the City and opposition after shock slump in GDP » | Larry Elliott and Nicholas Watt | Wednesday, July 25, 2012

Debt Crisis: IMF Calls on Coalition to Draw Up 'Plan B'
THE DAILY TELEGRAPH: Britain’s recovery has stalled and the Government must be prepared to relax austerity to pump life into the ailing economy, the International Monetary Fund has warned.

The IMF said that post-crisis repair to the ravaged economy would take longer than expected, meaning extra effort to boost growth could take priority over deficit reduction should the outlook worsen.

It said the 2013 Budget would be an ideal time for the Government to consider further action, should policies already in place fail to make an impact.

"If growth does not take off and unemployment fails to recede even after substantial further monetary stimulus and strong credit easing measures have been given time to work, the policy response should include a further slowing of fiscal consolidation," said Ajai Chopra, the IMF’s deputy director of the European department.

"[The Budget] would be the natural time to look at the state of the economy and policy responses," he said. » | Angela Monaghan, Economics Correspondent | Thursday, July 19, 2012

IMF report on UK
My comment:

Austerity, austerity, austerity is not the answer to a severe recession, depression. What the Chancellor is doing with all this austerity is slamming the breaks on really hard when in actual fact the pump needs to be primed.

Whilst it is always prudent for a country to get its finances in order, the time for doing this is when the going is good. It is when the going is good that we save for that proverbial 'rainy day'. A family doesn't save money when the rainy day has come; rather, it saves for the rainy day when circumstances allow. So it should be for government. The coffers should be being filled when the economy is booming. What this government is doing is turning this wisdom on its head. The result will be misery for the people. Witness what is going on in Greece – austerity as we have, but in extremis.

All this austerity should therefore be tempered by a solid growth strategy. Only when the economy starts to grow again, only when there is at least a modicum of recovery can we hope to shorten the dole queues, can we hope to relieve people's misery, can we hope to encourage people to spend again. For it is only when people spend that demand increases; and only when demand increases will the economy start moving again. – © Mark

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George Osborne 'To Fight For Bankers' Bonuses' In Europe

THE DAILY TELEGRAPH: George Osborne is preparing to defend the right of British banks to pay large bonuses against EU plans to cap the pay-outs, it emerged last night.

The Chancellor is expected to argue against the crackdown at a meeting of European finance ministers on Tuesday, in spite of a fresh public outcry over the behaviour of bankers in the wake of the rate-rigging scandal.

Mr Osborne will argue that the proposals, to set a maximum 1:1 ratio of bonus to pay, are not the right way to curb City remuneration.

Officials insist that he had taken the same position before details of the Libor rate-fixing scandal emerged, and it has not changed, the Financial Times reported.

But the timing of the meeting is likely to make it politically risky for him to make such a case, with the Chancellor potentially facing the accusation of being in cahoots with bankers despite allegations about their reckless behaviour.

It comes amid outrage that Barclays chief executive Bob Diamond may still be in line for a multi-million pound pay-out following his resignation over rate rigging. » | John-Paul Ford Rojas | Saturday, July 07, 2012

My comment:

This is clearly a case of out-of-touch Osborne defending the indefensible. This man is not in power to serve the people, but to serve his cronies. – © Mark

George Osborne and Mervyn King Announce £80bn Lending Boost
The chancellor of the exchequer, George Osborne, and the governor of the Bank of England, Sir Mervyn King, announce new emergency measures to help British banks boost business lending. In the proposal, banks will receive cut-price long-term loans, provided they pass the benefits on to their business customers

Read the article here | Larry Elliott, Jill Treanor and Ian Traynor in Berlin | Thursday, June 14, 2012

Sir Peter Osborne's Love of Luxury

THE DAILY TELEGRAPH: George Osborne's father has risked embarrassing his son by giving details of his lavish lifestyle in an interview.

Sir Peter Osborne told the Financial Times' How To Spend It magazine [Part 2] that he wants to buy a £19,000 desk.

The Baronet, who co-founded prestigious wallpaper and fabric firm Osborne & Little, also discussed his love of exclusive holiday destination Mustique and Savile Row suits.

The comments emerged with the Chancellor struggling to shrug off Labour criticism for cutting the 50p top tax rate for high earners.

Sir Peter said one of his favourite recent purchases was a Tahiti lamp by Italian designer Ettore Sottsass, which he got from auction house Christie's.

"The thing I'm eyeing next is a wonderful Fornasetti Architettura Trumeau desk at Themes & Variations," he added. The magazine lists the price of the item as "from £19,000". » | Saturday, April 21, 2012

Stupidity Warning! George Osborne 'Can't Remember' Eating in Greggs amid Ridicule over Pasty Tax
George Osborne has been mocked by MPs over his “pasty tax” after it emerged people could avoid paying VAT on hot baked goods if they wait for them to cool in the shop.

Read the article and comment here | Rowena Mason | Political Correspondent | Tuesday, March 27, 2012,

Budget 2012: A Slap in the Face for Decent People

THE DAILY TELEGRAPH: He has eroded their savings, and now he’s scrapping the age-related allowance – but has George Osborne underestimated the anger of middle-income pensioners with his Budget?

What on earth was the Treasury thinking, as it busily leaked details of the Budget left, right and centre while failing to alert anyone to the biggest revenue-raising measure of all? George Osborne talked about the abolition of age-related allowances, which will cost some pensioners several hundred pounds a year, as a “tax simplification”. Did he think the over-65s would be grateful? Or did he just not think about the position of decent middle-income pensioners at all?

Whatever the truth, it is certainly the case that this “stealth tax” has upset a very important political group. Judging by the emails and phone calls I have already received, there is widespread anger out there.

The Chancellor’s decision to reduce the real value of older people’s personal allowances means they will have to pay more tax than would otherwise be the case. For future pensioners, the impact will be to reduce their income by around £250 a year. This only affects the middle classes – the four and a half million or so older people who did put some money by for their future. Around half of pensioners have incomes below £10,000 a year and aren’t affected, as they pay no tax. The highest income pensioners are also unaffected, as the age allowance is withdrawn once incomes rise above about £24,000 a year.

It is those with incomes between about £10,500 and £24,000 a year – the “squeezed middle” – who have just been squeezed some more. These are people who saved to provide themselves with a decent income in retirement; not a lavish lifestyle, but enough to enable them to look after themselves and their families. So it is from this particular group that the Chancellor intends to take over £1 billion a year in extra tax.

These are the very people who have already been hit by the recent policy of ultra-low interest rates, which took away much of the savings income they had been expecting to live on. And then the Bank of England’s money-printing, gilt-buying spree – called quantitative easing – hurt them again as it led to high inflation and falling annuity rates, as well as hitting people in income drawdown very hard, too. Many of these pensioners feel they have already suffered a series of stealth raids on their incomes and they were outraged that the Chancellor announced so casually yesterday that he was piling on yet more pain. Read on and comment » | Ros Altmann | Thursday, March 22, 2012

My comment:

Excellent article!

George Osborne has shown that he and his cronies have nothing but contempt for all the little people. For this public school cabal, if you are not mega-rich and probably working in the financial sector, you're worthless. The little people be damned; we're going to look after the fat cats.

One of the things that troubles me greatly is the ultra-low interest rates which we now have. For pensioners and those dependent on generating an income from their savings, this is a catastrophe.
These idiots believe that capitalism is about rewarding the high earners with ever more tax breaks and bonuses. They seem to have little understanding that paying interest on accumulated capital in the form of savings belongs every bit as much to capitalism as rewarding risk-takers.

Any responsible government should be rewarding savers. People who save can look after themselves on rainy days and in retirement. Financially-independent people are not going to become a burden on the state. This budget did nothing for savers; in fact, it sent out the message that saving is a worthless pursuit.

The day of reckoning will surely come for this reckless and irresponsible government. And it should be noted that I write as a lifelong Conservative voter. No more! – © Mark

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Related »

Granny Tax Backlash: Fury as Full Scale of Chancellor's Raid on Pensioners Emerges
MAIL ONLINE: Around 700,000 people turning 65 next year will be hit the hardest / The tax will take £3.5billion from more than 4.4million pensioners / Senior Tories say the move is the Chancellor's biggest blunder

The full extent of George Osborne’s stealth tax raid on pensioners was laid bare yesterday.

Around 700,000 people turning 65 next year will be hit the hardest – losing £323 annually with the end of age-related income allowances.

In all, the ‘granny tax’ will take £3.5billion from the pockets of more than 4.4million pensioners. Senior Tories have denounced it privately as the Chancellor’s biggest blunder.

The new rules are so arbitrary that some OAPs will lose far more than others born a day before them.

Ros Altmann of Saga said: ‘Middle-class pensioners are outraged. My inbox is full of angry emails from those who did save for their future but are now hit.

‘The message of this Budget is, don’t bother to save for the future and if you’re too old to work any more you don’t count.’ Read on and comment » | Tim Shipman and James Coney | Friday, March 23, 2012

Budget 2012: Ed Miliband's Response
Labour leader accuses government of unveiling a millionaires' budget and says it marks the end of 'we are all in it together'

Osborne: UK Has Run Out of Money

THE SUNDAY TELEGRAPH: The Government 'has run out of money' and cannot afford debt-fuelled tax cuts or extra spending, George Osborne has admitted.

In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy.

Mr Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers.

“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.”

Mr Osborne’s bleak assessment echoes that of Liam Byrne, the former chief secretary to the Treasury, who bluntly joked that Labour had left Britain broke when he exited the Government in 2010.

He left David Laws, his successor, a one-line note saying: “Dear Chief Secretary, I’m afraid to tell you there’s no money left”. » | Rowena Mason, Political Correspondent | Sunday, February 26, 2012

My comment:

Time to start taxing the Non-Doms then! They've got lots of dosh. In fact, they're awash with it, Mr. Osborne. They can help you out. Remember: "We're all in this together." – © Mark

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