Posted on December 2, 2011 by Phillip Lee

This week in the House of Commons, Chancellor George Osborne delivered his Autumn Statement on Tuesday 29^th November to update MPs on the Office for Budget Responsibility’s (OBR) growth forecast for the UK economy. The economic outlook is rather gloomy and I fear that we have inherited a worsening situation. All the evidence from economic history suggests that due to the overhang of debt, recoveries from financial crises are slower and choppier than recoveries from other kinds of recession. So, while we have all had to revise down our short term expectations over recent weeks, the only people who should be fundamentally re-examining their view of the world are those who considered this time was different.  I have never thought that this time would be and right from the beginning understood that our period of boom had changed beyond recognition to one of bust.

The UK economy has had a number of shocks – higherthan expected inflation slowed the economy; then the crisis in the euro increased instability and uncertainty, which in turn affected household and business spending. These are tough challenges. Tackling these challenges is the concern today – do we add even more to spending and borrowing, or should your Government deal with the debt? The only option is clear – we have to tackle the debt.  In his speech, The Chancellor highlighted the Government’s investment of £30 billion of private and public funding in roads and railways, high-speed broadband networks, science labs and free schools. He announced an active enterprise policy to help businesses expand and create jobs, with a £20 billion National Loan Guarantee Scheme, new tax breaks for investment in start-ups and cuts to red tape. Also a plan to help families and young people by doubling the number of children who will receive free nursery care, and investing nearly £1 billion to help young people get jobs and training. What we have to understand is that as a country we are not immune to what happens in neighbouring countries but a sovereign contingency plan will help ease Britain’s involvement in the eurozone crisis.

Fiscal responsibility will bring unsustainable government borrowing under control, so that monetary activism can allow interest rates to stay lower for longer.  It has delivered a safe haven in the sovereign debt storm while keeping record low interest rates for families, businesses and taxpayers. Borrowing too much is the cause of Britain’s problems, not the solution. The amount we pay on debt interest this year could be used to fund 1.5 million nurses, 1.2 million teachers, 1.1 million police officers or 0.4 million doctors. Because of the Government’s firm expenditure controls the cost of UK borrowing is as low as Germany’s which ensures repayment costs are reducing significantly. This means future taxation can be for worthwhile public services rather than high debt repayments. Labour’s irresponsible legacy is a burden on today’s taxpayer and this Government will make sure it is less so for the next generation on whose backs the Brown boom and bust has been carried. Because this is essential for the future well-being of Bracknell families – I shall fully support The Chancellor’s proposals.

(Published in the Bracknell News, December 2011)