No More Arguments: Austerity is Working! : Tue Dec 10, 2013 11:13 pm
NO MORE ARGUMENTS: AUSTERITY IS WORKING!Labour and the chattering classes accused George Osborne of condemning Britain to a future without growth. They have been proved wrong.
The death of Nelson Mandela meant the reporting of the autumn statement was overshadowed last week but Osborne scored a significant victory over Ed Balls-Up and his critics are on the run. As the economics editor of the Sundays Times put it “The intellectual battle is over. This may not be the best or most balanced recovery on record but it is a recovery, and is gaining strength”
Even The Guardian declared that Balls was the biggest loser from Osborne’s autumn statement. Recent rapid footwork from Miliband and Balls to shift their attacks on the government from austerity to living standards, could not cover his embarrassment. Balls had endured a n autumn statement from Osborne that started with the line “Britain’s economic plan is working” and proceeded to twist the knife deep into Labour.
The coalition had inherited a country in serious fiscal crisis with its public finances “broken” and mired in “deep-seated problems of unsustainable spending, uncompetitive taxes and unreformed public services” Osborne said.
Having resisted huge pressure to abandon his deficit cutting strategy, most notably from Balls, the chancellor was able to wallow in satisfaction. Not only had Labour – and Balls – opposed every measure to reduce the deficit, but they constantly warned that without temporary tax cuts or spending increases, the economy would “flatline”
Yet growth has returned dramatically this year. Fears of a “triple-dip” recession at the start of the year proved groundless and the earlier double-dip at the end of 2011 and 2012 was revised away by the official statisticians.
Last Thursday was the biggest upward revision of growth in an official forecast for 14 years. The OBR more than doubled its estimate for this year on the back of quarterly growth rates of 0.4%, 0.7% and 0.8% respectively.
Even more than the GDP numbers the growth in jobs has defied the gloomsters. According to the OBR employment has risen by 400,000 this year, taking the total since May 2010 to almost 1 million. Over the period 2011-2019, the OBR predicts 3,1m extra jobs, three times as many as the 1,1m public sector jobs that will be cut.
All this has come without Osborne abandoning his austerity programme. In comments aimed at the Labour front bench and his many other critics he said “Over the last three years we have stuck to our guns, worked through the plan. We have done so in the face of a sovereign debt crisis abroad. We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong”
The faces of the Labour front bench said it all "Bad news........there's good news"
Source: David Smith economics editor of the ST
