A Dark Winter - Osborne's Spending Review
The Spending review and Autumn Statement was announced a month before Christmas. This was very apt as the Robert Choate, the head of the OBR, gave the Chancellor the most generous gift one could imagine: £27 Billion of future spending. This leaves the government within it’s self-imposed (and economically questionable) framework for reaching a long-term stability in the public finances.
Where did this money come from? The answer is that OBR assumes that the Government’s cost of borrowing will be lower than previously assumed. This leaves this today’s new spending vulnerable to financial market turmoil. Secondly an increase in money coming from taxes throughout this Parliament.
So what did George spend his Christmas money on? Firstly delaying the pain of the cuts to tax credits until universal credit is introduced in late 2018. While we must thank the hard work of campaigners in the Labour movement for this U-turn, we must prepare for this fight again. Universal Credit is likely to disguise the fact that this chancellor is determined to unwind the last Labour government’s work of fighting poverty.
Secondly, he was able to slow the amount of cuts to public services on the front line. The Police budget, an area, which was going to be reduced to level that, was likely to risk public safety was reversed. But this only protected in cash terms, so any rise in inflation may create dangerous challenge for the police.
Finally, investment was made into vitally needed infrastructure in the north of England such as electrifying Trans-Pennine line and London.
It’s worth mentioning that the tampon tax funds will be given to charities supporting the needs of women; welcomed by all but why should an unjust tax fund essential services? Gimmicky politics is still under the tree at HM Treasury this festive season.
However, there were many losers from today as well. Persons with disabilities receiving Employment Support Allowance will now have more conditions imposed and cut in their payments. The conditions include weekly meetings at job centres. The purpose of having more advisor meetings is unknown. Yet the intent is clear, to achieve fiscal aims of this government at the expense of those who need oursupport the most.
The Labour movement will have to fight to defend needs of millions of ordinary workers but our nation’s direction of travel is clear. The size of state will shrink not only in the size of its resources and like the Grinch in the size of its heart.