Chancellor facing criticism from left and right

6th December 2012


Mindful Money brings you a round up of what the papers and magazines are saying about George Osborne’s Autumn Statement and the state of the British economy. The reviews are not good, and mix criticism with warnings for the future from both left and right.


In the Guardian economics editor Larry Elliott is ever faithful in his opposition to the Chancellor’s strategy.

“Osborne's excuse for the late arrival of the train at its deficit-free destination is that he inherited some clapped-out rolling stock and that exports have been hit by problems in the eurozone, the US and China. This all sounds wearyingly familiar to the long-suffering public, rightly cynical about those who seek to explain away failure by talking about leaves on the line or the wrong kind of snow.”

In the Telegraph, Jeremy Warner suggests that it is the Coalition government which is stymieing the adoption of a bolder strategy.

“The compromises of coalition government prevent the kind of radical, supply-side, tax-cutting agenda that might stand some chance of breaking the mould. What we seem to have is a kind of “New Labour-lite” approach to government in which the Treasury constantly shrinks away from what really needs to be done.”

In the Spectator magazine’s excellent Coffee House blog, Isabel Hardman notes a political problem for the Chancellor is the UK loses its rating.

“Ratings agencies aren’t the be-all-and-end-all by any means, and Osborne could quite easily point to just how wrong they were before the crash, giving collateralised debt obligations high ratings. But the problem is that the Chancellor tends to wheel out their approval to shore up his own position, pointing to the UK’s AAA rating as a sign that he is pursuing the right economic policy.”

Jumping over the political fence to the New Statesman , its leader column is also in critical mode, although interestingly it agrees with the Telegraph’s Warner on tax cuts.

With a genuine strategy for growth, including the establishment of a National Investment Bank, a major house-building programme and significant tax cuts, the UK could recover. But as long as Mr Osborne’s destructive reign continues, it will become ever harder to do so.”

Across the pond, in the Wall Street Journal’s Heard on the Street column Simon Nixon is worried about the deficit and the fact it will soon rival those in the eurozone.

“Mr. Osborne is still taking a big gamble. Even if the economy grows in line with the OBR's new, more sober forecast, the U.K. will be running a bigger budget deficit than any euro-crisis country by 2014 and will still be running a deficit of 1.8% of GDP in 2018. And if Mr. Osborne's judgment on what ails the U.K. economy turns out to be wrong, his strategy will have been comprehensively derailed.”

North of the Border and the Scotsman is pleased with an extra £331m for capital projects. But it quotes Scottish finance minister and SNP MSP John Swinney saying: "After two and a half years in office the Chancellor has finally heeded Scotland's calls to boost capital spending. The steps he has taken are welcome but they only take us half way towards common sense in terms of investment and there is still a lack of a coherent plan to return the economy to growth.”

Finally in the Daily Mail, James Coney asks why pensions have to bear the brunt of cuts.

“The message that this Government keeps reinforcing is that savers’ nest eggs are fair game when it comes to getting the economy back on track.”


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