Ventriloquism?

As his nervous pupil read out his first Pre-Budget statement, the tutor sat smiling behind him, from time to time positively beaming with approval.

Pupil Darling had been so instructed that words he uttered could have been those of Gordon Brown himself. Was the speech actually written by Gordon Brown, - it has all his hallmarks.

If Darling was honest enough to warn that turbulence might be coming ( code for rising unemployment and falling incomes and growth), there was still the refrain that the Economy has been growing for so many years, even under the Conservative period by some mysterious alchemy attributable to Gordon Brown.)

As usual it was selective and calculated to deceive. The UK is not “the fastest growing major economy in the world” which he claimed. Even leaving out the economies of China, India and Russia, which are hardly minor, and the OECD expects seventeen of its members to grow more rapidly than the UK.

The UK figures are bloated by high salary increases in the very enlarged public sector, (where their salaries are heroically assumed to be the value they add!), and using an inflation figure, the CPI, which seriously underestimates the real increase in GDP which is due to inflation and not to increased output and consumption. Very worryingly, our productivity figures are declining, in part due to the low figure in the public sector, our education and training is falling below rapidly behind those of competitors, and our investment in the manufacturing sector is very low.

The claim to high employment sounds impressive, so long as the increase due to immigration is included. He was noticeably less forthcoming on unemployment, even with the figures massaged because of the number on various other benefits rather then registered as unemployed. We are familiar with the number of NEETS – young people not in education, employment of training), which would otherwise put many more on the unemployment numbers. The economic activity rate for people of working age reached a peak of 80.7% in 1990. In 2007 it is 78.8%.

As usual, it was also a matter of the things which were not mentioned. Somehow he forgot to mention that we are saving barely 3% of our personal incomes (in double figures under the last Conservative Government), and that our growth has not been export-led, but consumption-led, and consumption financed increasingly by credit! This is a very unhealthy situation, if the “turbulence” comes!

As usual, also, was the attempt to hide things away in the small print, in the hope that any initial pleasure will somehow remain when the Chancellor has been rumbled. Specifically, council tax payers, who have seen their council taxes rise by nearly 100% over the past 10 years, must expect their council taxes to rise by nearly 30% in the next five years. So a “Band D” taxpayer, on average paying £1,321, will find that by 2013 he will be paying £1,691. If those on relatively fixed incomes, like the elderly, are struggling now, they will almost certainly find it harder in 2013!

Reflection on the Pre Budget Statement will have shown that there are few gainers, for example existing widows/widowers with inheritance tax, if they had not done any tax planning. To whatever losses we calculated from the taxes he increased openly, we must now add council tax increases. The stealthy taxman lives on. The teacher has taught his pupil well!