John Baron is the Member of Parliament for Basildon and Billericay. Before entering politics, John worked in the City advising mostly charities on their investments. He presently writes a column for the FT’s Investors’ Chronicle magazine.
With the dust now settling on the Budget, it is clear the Chancellor has chosen to stick with his economic plan. Whilst a number of individual measures were welcome, the Coalition has simply tinkered by moving a few £billion around in an economy of £1.5trillion. This will have the same effect as moving deckchairs around on the Titanic – or the band changing the music – and will prove woefully inadequate. What is needed is a substantial cut in spending, allied to substantial tax breaks to get the economy moving.
It is perhaps worth reflecting on yet another set of missed targets. The original plan was that we would have eliminated the annual deficit by 2015, and even begun to reduce the national debt. But we will still be adding to the debt pile in 2017/18. The Government boasts of reducing the deficit by a third – this still means we are adding to the debt, but at one-third less the rate previously.
A common refrain used against Labour when we first came to office was that they had doubled the national debt in their 13 years of power. According to figures from the Taxpayers’ Alliance, the present trajectory suggests that by 2017/18 the Coalition Government will have more than doubled again the official national debt it inherited in 2010. And this assumes the OBR’s optimistic growth forecasts remain intact – something that has yet to be achieved.