Verdict on Autumn Statement 2012

(Photo source: The Guardian)

After the Autumn Statement last Wednesday, I was invited by the Guardian to critique it on an experts panel in its Comment is Free section. I discussed how George Osborne’s speech on the economy showed the defeatism of Britain’s political class.  Read the original here.

The most striking thing about today’s mis-named “autumn statement” is what it tells us about the defeatism of Britain’s political class in the face of the nation’s deepest and most prolonged depression.

Roosevelt, faced by a comparable depression, told his people in 1933 that they had nothing to fear but fear itself. Britain’s chancellor chooses instead, to fill his people with fear and depression.

Economic activity continues to collapse – that is why corporate tax receipts fell so precipitously in October. And this is wrongly presented to the nation as inevitable, as a “permanent” loss. Not true. There is massive spare capacity. The Treasury’s policy is not to utilise it.

The chancellor is faced with a crater of economic inactivity – bombed out of the economy by the banking crisis and self-induced austerity. And into that crater – a loss of about £500bn from 2010-12 – he proposes to drop a pitiful £5bn. This is about 0.3% of a single year’s GDP and consists of largely recycled capital investment.

The British people deserve better.

 

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