It was a promising picture of an economy damaged by recession making a strong and enduring recovery that the United Kingdom’s Chancellor George Osborne presented in his Autumn Statement — a mid-term, pre-budget report — to Parliament on Friday.
The statement is based on figures and forecasts on economic growth from 2013-14 to 2018-19 compiled by the U.K.’s independent Office of Budget Responsibility (OBR).
While the overall thrust of his presentation was focused on reducing the deficit and cutting public spending, especially on welfare, Mr. Osborne also announced small popular measures targeting cost of living crisis.
His conclusions were challenged by the opposition Labour party, unions, and economic commentators, who used the same OBR figures to come to different conclusions.
Mr. Osborne claimed a significant turnaround in the economy in respect of GDP growth, job creation, shrinking deficits, and a substantial fall in borrowings, and promised that these trends would improve year on year till 2018-19.
However, he warned that the recovery would mean having to take tough decisions on the economy, a reference to his government staying the course on implementing tough austerity measures.
He said that the U.K.’s GDP growth, at 1.6 per cent, is the highest in the last 14 years and higher than that of France, Germany and the US.
Employment is at an “all time high”, with an increase of 400,000 jobs this year, while the number of people claiming unemployment benefit fell by over 200,000 in the last six months, the “largest such fall for sixteen years” he claimed.
Actual performance
Contrasting the promises made by Mr. Osborne three years ago with the actual performance of the economy, Shadow Chancellor Ed Balls said that while the economic policy may have worked for corporations, energy companies and hedge-fund managers, “working people are worse off”.
Duncan Weldon of the Trade Union Conference in a statement said that the Autumn Statement “fits the pattern of the recovery we have experienced over the last year or so — consumption driven accompanied by weak earnings growth with the factor making the difference being a falling household savings ratio”, adding that the OBR makes it clear that this pattern will not only continue but intensify.
