Little Christmas Cheer From Osborne
Updated: 3:29pm UK, Sunday 02 December 2012
Borrowing costs up, growth forecasts down. Little wonder, then, that George Osborne’s Autumn Statement will look more like January’s credit card bills than Santa’s stocking.
And there’s a rare degree of unanimity across Fleet Street about what form the nasty fiscal news will take.
This seems to point to behind-the-scenes briefings of a kind Lord Leveson would like to outlaw.
But for now it’s everywhere.
The expectation is that George Osborne will announce tax rises on the pension pots of the wealthiest AND a freeze on many benefits.
It’s also predicted there’ll be a lowering of the annual limit of tax relief on pension contributions from £50,000 to £30,000. Alongside this, it seems, we can expect a freeze on out-of-work benefits.
However, any form of mansion tax – or splitting council tax bands – is likely to be ruled out. That’s a battle the Lib Dems have lost.
A battle that Tory backbenchers appear to have won, by contrast, is agreement to delay the 3p per litre rise in fuel duty planned for January.
While that last one will come as some comfort for many, the overall picture is bleak.
No surprise there, given that economic experts from the independent Office for Budget Responsibility to the Governor of the Bank of England agree that unless the Chancellor’s prepared to let his debt reduction target slip further into the future, he has no choice but to make himself deeply unpopular.
Though he knows this as well as anyone, he’s sticking doggedly to his script.
Speaking to The Sun On Sunday, he said: “We are still all in this together. Everyone must make a contribution to dealing with our debts, from the richest in our society to those living a life on benefits.
“The road ahead may be longer than we thought, but it leads to a better future. Let’s have the courage to stay the course.”
Labour say that course is made that desperately more uphill and potholed by HIS actions. Trying to cut the deficit too far and too fast.
But they know that if THEY’D won the election there’d still have had to be deeply unpopular austerity measures following the economic meltdown of 2008.
Governments across Europe have been falling like dominoes for precisely that reason.
But, in the short term at least, Mr Osborne’s offering will be judged on the basis of fairness. Or otherwise.
Research by the consumer group Which? suggests that almost one in four UK households are already feeling “financially squeezed”.
For them at least, any talk from the Treasury of discomfort (that favourite doctor’s euphemism) will mean what it really means. Pain.
Which is why, for the Chancellor, the political stakes this week could hardly be higher.
Article source: http://news.sky.com/story/1019428