Been watching rugby on TV today, and now just settling down with a glass of wine to write my fortnightly article for the Oswestry and Borders Chronicle. Never totally straightforward deciding what to write about because the Chronicle is not published til Wednesday. Whatever, here goes.
“Over recent weeks, public conversation about British politics has been focussed on two dominating subjects, Brexit and sexual harassment. This week, the main focus must surely move on to matters concerning the economy. Because Wednesday is Budget Day. And this is not easy to comment on today, because I’m writing before I know what’s in it, and it’s probably being read after it has been delivered to MPs in the House of Commons and been published. I just hope I’m not left too red faced by any big differences in my expectation and the reality.
We do know that the Chancellor, Philip Hammond is in a very difficult place. He may well want to increase public spending, but he has no money! UK public borrowing is simply too high. Far too high to allow public spending to be substantially increased. I hear some MPs, especially those on the opposition benches calling for £billions to be ‘invested’ in almost every budget area. I hear calls for an “end to austerity”. These calls are totally irresponsible. I suspect most people know this.
Let us consider the actual numbers. Our National Debt is an eye-watering £1.7 trillion (£1,720,000,000,000) - plus a variety of off balance sheet debts, that by any normal interpretation are also debts. The UK’s annual deficit is around £45billion (£45,000,000,000). This is how much more the Govt is spending this year that it has coming into the Treasury. It’s all being added to the National Debt. Describing this as “austerity” seems to me to be an abuse of the English language. The reality is that we are living way beyond our means, leaving our children and grandchildren to clear up the mess. It’s a rather selfish attitude.
But there will be increases in spending, as well as various tax changes. I expect some relaxation in the public sector pay cap. It was defendable when inflation was very low, but at present it’s around 3% which may well lead the Chancellor to act. I expect some more money to go to Universal Credit, bringing the time interval before actual payment to be reduced from six weeks. I expect more money to go to the NHS and Social Care. The warnings about winter pressures are too loud to ignore. And there will surely be public money to deliver more housing, especially for first time buyers. If all this is included there will not be muc( scope for anything else.