Tag Archive | spending review

One Big Rip-off

Ok, so that’s not what the OBR stands for, but today’s combined UK spending review and autumn statement amounts to little more than an overdose of bollitics — straight from the Chancellor’s (neeeiiigh the Prime Minister’s, according to the Speaker) mouth:

“Since the Summer Budget, housing associations in England have been reclassified by our independent Office for National Statistics and their borrowing and debts been brought onto the public balance sheet – and that change will be backdated to 2008.

This is a statistical change and therefore the OBR has re-calculated its previous Budget forecast to include housing associations, so we can compare like with like.

On that new measure, debt was forecast in July to be 83.6% of national income this year. Now, today, in this Autumn Statement, they forecast debt this year to be lower at 82.5%. It then falls every year, down to 81.7% next year, down to 79.9% in 2017-18, then down again to 77.3% and then 74.3%, reaching 71.3% in 2020-21.

In every single year, the national debt as a share of national income is lower than when I presented the Budget four months ago.

This improvement in the nation’s finances is due to two things.

First, the OBR expects tax receipts to be stronger. A sign that our economy is healthier than thought.

Second, debt interest payments are expected to be lower – reflecting the further fall in the rates we pay to our creditors.

Combine the effects of better tax receipts and lower debt interest, and overall the OBR calculate it means a £27 billion improvement in our public finances over the forecast period, compared to where we were at the Budget.

Mr Speaker, this improvement in the nation’s finances allows me to do the following.

First, we will borrow £8 billion less than we forecast – making faster progress towards eliminating the deficit and paying down our debt. Fixing the roof when the sun is shining.

Second, we will spend £12 billion more on capital investments – making faster progress to building the infrastructure our country needs.

And third, the improved public finances allow us to reach the same goal of a surplus while cutting less in the early years. We can smooth the path to the same destination.”

… to be continued

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