The Chancellor, yesterday told the country that weaker growth and higher borrowing would force the country to endure a record breaking six years of austerity. Then as soon as he had made his statement he was off. To where you might ask? To Brussels for an emergency meeting with European finance ministers.
And oh, how he needed to go there. For he knows that however miserable the prospect outlined in the House, it will be a hell of a lot worse if the crisis in the euro zone is not resolved soon.
If the European financial system goes belly up it would tip an already fragile UK economy into a double-dip recession.
As it is, the Office for Budget Responsibility painted a grim picture of what the country can expect until way past the next election. The government is on course to borrow an additional £111bn over the next five years, while unemployment will hit 2.8 million and living standards will continue falling until 2013.
But it is those in the public services that are going to take the biggest hit.They will face job losses totalling 710,000, compared with the 400,000 it had previously expected as a result of the government’s spending cuts.
But Osborne let the cat out of the bag that things could be a lot worse when he said the Treasury was now undertaking “extensive contingency planning” to cope with a possible break-up of the euro, and admitted: “If the rest of Europe heads into recession, it may prove hard to avoid one here in the UK.”
And what of Europe? The signs there are ominous. There are fears that Europe has entered the make-or-break phase of its crisis, as a sign of this Italian 10-year bond yields were closing in on the 8% level yesterday.
The EU Monetary Affairs Commissioner Olli Rehn said: “We are now entering the critical period of 10 days to complete and conclude the crisis response.”
So whether our misery becomes a whole lot worse is no longer in the hands of George Osborne but in rather in the hands of Angela Merkel and how she responds in the next fortnight to the Euro zone crisis.
What is certain is that the next General Election will be a strange affair indeed. The government will have to fight it having already committed to £15bn of additional spending cuts for the first two years of the new parliament.
So parties will approach the election with little scope to make improvements to the wealth of the country. So the arguments will be about how the limited wealth is distributed. So the language of the next election will be about fairness. What is the fair thing to do when the coffers are low. The party(s) that is most convincing on this will get the spoils.
George Orborne in his Autumn Statement has seemingly declared war on public sector workers in general and on the Welsh public sector workers in particular.
His freezing of pay packets to one per cent will hit all workers in the sector but his proposal to introduce regional wage rates will particularly hit those in Wales. Public sector workers in the country will see their future wage packets considerably smaller than those doing the same job on the other side of Offa’s Dyke.
The Chancellor’s appeal to the unions to call off tomorrow’s strike can hardly be taken seriously after such announcements. Proposing to cut wages is hardly likely to get public service unions in a reasonable frame of mind to negotiate a deal over pensions.
Why he should set about to alienate the unions without any real gain for the economy is difficult to comprehend? One can only deduce it is ideological rather than a practical economic step.
To dampens UK household expenditure and consequently growth, particularly in the retail sector at such a time makes no practical sense at all. Especially when the Chancellor was forced to concede that the UK risks falling into recession in the coming months and the economy will barely grow next year.
This freeze and the prospect of regional wages will have a disproportionate impact on Wales. A large number of workers employed in the public sector in Wales.
Wales has not done well from George Osborne’s statement. Out of the £30bn UK ’˜National’ Infrastructure Plan Wales will only get £216m.
Worryingly the changes to the growth figures in the short term show the the Government’s economic policy is just not delivering. The OBR is now predicting that Britain will expand by just 0.7% in 2012 (down from 2.5% in the March forecasts).
With such low growth figures in Britain, it is almost inevitable that Wales will either be or, maybe is, already in recession. The economy in Wales has always lagged behind the rest of the UK. Last month’s unemployment figures showed us as the country that topped this miserable league in the UK
What’s to be done? Well, if the Chancellor has not seen Wales has a high priority, the Welsh Government needs too.
The Welsh government needs to up it’s game. It needs to be far more proactive than hitherto.
Ways have to be found to get more infrastructure development in Wales. If Merseyside can get the Chinese to invest in an Atlantic gateway and other parts of England getting Middle Eastern countries and Asia countries investing in infrastructure projects, why not Wales? Why does Wales seem to miss out on large infrastructure developments?
Look at our record. No Severn Barrage. Not a mile of electric railway track in the country. Abysmal transport links between north and south of the country. No decent airport. The list is endless.
C’mon Carwyn lets get a list of major projects that Wales can take to investors. Let’s not be limited by our lack of ambition. After all your manifesto was ‘to stand up for Wales.’ Now is the time to deliver.
The government may have got their deal by offering a crumb or two the Liberal Democrats way. But the tips below will give you a great deal more that you’ll get out of the budget settlement!
Although all our budgets took a hit last week with only one winner and no placed horses. It was our worse results since starting this Saturday racing blog. This week we’ll have to raise our game.
Again it’s the terrestrial television racing that is followed and these are at two meetings, Newbury and Newcastle. Both offer some really good races and there will be plenty of excitement and my guess some upset of favourites.
2:05 Sportingbet Intermediate Hurdle (Limited Handicap) (Registered as the Gerry Feilden Hurdle) (Listed) Cl1 2m110yds
The in-form horse is Empire Levant but odds are low so the question is which horse could give you a better return esach way and Azari could just do it for you