Out of 100 British voters, as of now, some 33 appear to have opted for both the Conservative as well as the Labour party. The real battle is to win those who are not yet committed to any political persuasion.
This budget, the last in the present Parliament, would make everyone compare the overall change between 2010 and 2015. The economic indicators can be summoned up as under:
* unemployment rate: 2010 - 7.9% ; 2015 - 5.7%
* size of the economy: improvement of 8.5%
* exports: increased by 14.8%
* imports: increased by 13.3%
* national debt: whopping increase by 44%. From £974 billion to £1402 billion
* budget deficit: decreased from £141 billion to £93.6 billion. A reduction of 33.6% falls far short of the earlier objectives
* economy: according to the Financial Times (FT) “the Office of the Budget Responsibility’s (OBR) initial forecast was honest but wrong and badly so. The biggest error was to overestimate productivity growth.
* labour market: in the words of the FT “the performance of the labour market has been one of the biggest surprises of the past five years.” Given the weaker then expected economy, low unemployment with poor productivity and wage growth was probably a better outcome than the alternative of high unemployment with descent productivity and wage growth.
But now the economy is recovering, the wages and output per hour need to rise too —
* public finances - FT wording “the Chancellor says he has halved the deficit as a share of national income.” That is true, but records are far less impressive than any planned in 2010, so the deficit reduction must be regarded as a failure —
* winners and losers: FT wording is very noteworthy “the government policy over the past five years has favoured the relatively elderly over the young” —
In a way when I was watching the Chancellor’s budget speech a lingering thought was if he was trying to bribe the voters or not. It appears, like other chancellors, he had no option but to offer several bribes. To raise money he has to dig some more - almost £10 billion - from the banking sector. Tomorrow or the day after the burden will be passed on to the citizens.
- CB
