Thursday, 14 December 2006

PERSONAL DEBT & FINANCIAL EXCLUSION

• Instead of action to prepare our economy for the new global economy, all the Chancellor gave us was reheated spin on education, a misleading description of the economy, and no action to prepare us for the challenges ahead. Incredibly he did not even mention the crisis in the NHS.
• Gordon Brown’s stealth taxes cost every family £9,000 each year. With hospitals closing, record violent crime and standards in schools still too low, no wonder taxpayers are asking: ‘where’s the money gone?’

Robert Key says...

The economic facts of life in Britain today are a long way from Gordon Brown's spin.

George Osborne's response in the House to the Chancellor's fantasy Report was hugely competent and bodes very well for a future Conservative Chancellor.

What Brown didn’t say

• As well as the £1bn in Air Passenger Duty which Brown announced in his speech, the small print of the PBR shows he raised taxes on business by £1bn.
• According to the EU, economic growth is 22nd out of the 25 members of the EU (CEBR, 3 December 2006). Gordon Brown tried to dismiss these facts as ‘absolute nonsense’. The Centre for Economics and Business Research said: ‘the UK has slipped three positions in the EU growth league to 22nd – or fourth bottom….The UK may remain in the relegation zone in the next few years. Good thing there is no second division’.
• Unemployment has risen faster than anywhere else in the developed world, according to the OECD.
• Take-home pay is falling, as earnings are rising slower than inflation (ONS, Q1-Q3, 2006).
• Brown revised down his growth forecast for 2008 (from 2 ¾-3 ¼ to 2½ -3%).
• Brown even failed to mention the crisis in the NHS, or the rise in unemployment.

The public finances are in a mess

• Brown now plans to borrow £167bn by 2011, almost £10,000 per family.
• Brown revised upwards net borrowing in each year to 2011 – up £7bn.
• He revised current borrowing up each year to 2011 – up £11bn.
• The UK structural budget deficit is larger than all the major EU countries, even Italy (EC, Autumn Economic Forecasts, 6 November 2006).
• Brown has changed the date of the fiscal rules yet again, bringing it forward to 2007.
• Next year we will have a current budget deficit, not a surplus.

Brown’s education announcement is yet more misleading spin

• Brown failed to mention his Budget pledge on raising education spending in state schools to the current level in private schools, called ‘virtually meaningless’ by the IFS.
• He repeated his highly misleading announcement on education capital investment, by overstating the real amount he will actually spend.
• But the growth of education capital investment is in fact set to fall.
• And overall net investment has been revised down from the figures in the Budget.
• The direct payments to schools are for one year only.

Brown is more interested in raising taxes than saving the environment

• Brown reversed his own cut in Air Passenger Duty.
• We do not oppose this increase in APD.
• But politicians will only persuade the public to support action on climate change if green taxes are replacement taxes, not new taxes.

Brown’s recent report provide a damning catalogue of Brown’s failure but no action has followed
Eddington: ‘the UK’s transport network is stretched beyond its capacity’
‘On average [commuters] are travelling more slowly than in 1996’
Barker: ‘6 per cent of planning inquiries took over a year to determine in 2001-02; by 2005- 06 this had risen to 34 per cent’
‘the appeal system has become slower in recent years’
Leitch: ‘A large and significant basic skills problem’
‘One in six young people leave school unable to read, write, and add up properly’