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Failure looms for George Osborne

The Chancellor will be forced to face facts in his autumn statement — there’s no other way of plugging the £190bn hole in his Budget than chasing after “plan B”.

Among Conservatives, George Osborne is known as “the submarine” for his habit of surfacing only for set-piece events such as the Budget and retreating under water at the first sign of trouble (for similar reasons, Gordon Brown was nicknamed “Macavity”, after the cat who wasn’t there).

Unfortunately for the Chancellor, on those occasions when he does appear, it is invariably to deliver bad news. When Osborne presents his autumn statement to the House of Commons on 5 December, he will again be forced to announce that growth is lower than expected and borrowing higher.

In March, when the Office for Budget Responsibility (OBR), the independent fiscal watch­dog established by Osborne, last published forecasts, it predicted that Britain would avoid a double-dip recession and the economy would grow by 0.8 per cent this year. Yet, a month later, the UK returned to recession (the only G20 country, with the exception of Italy, to have done so) and went on to suffer a third consecutive quarter of contraction. Independent forecasters now expect the economy to shrink by 0.4 per cent this year (see bar chart below).

As a result, Osborne’s deficit reduction plan, which was premised on a steady recovery, has been thrown off course. The Chancellor is fond of boasting that he has reduced the deficit by a quarter (from £159bn in 2009-2010 to £119bn in 2011-2012) since taking office, but the disappearance of growth makes this trend unlikely to continue. Borrowing so far this year is 22 per cent (£10.6bn) higher than in the same period last year and forecasters expect the government to miss its deficit target for 2012 (£120bn) by as much as £30bn. In total, it is predicted that the coalition will borrow £190.8bn more than originally intended (see graph below). At the time of his emergency Budget in June 2010, Osborne declared that “unless we deal with our debts there will be no growth”. But he has learned that the reverse is true – unless you stimulate growth, you can’t deal with your debts.


Golden rule

The parlous state of the public finances makes it likely that Osborne will announce the abandonment of his golden debt rule in the autumn statement. The Chancellor’s “fiscal mandate” requires public-sector debt to be falling as a share of GDP by 2015-2016, an aim that appears increasingly unachievable. In March, the OBR forecast that debt would fall from 76.3 per cent in 2014-2015 to 76 per cent in 2015-2016, but the IMF has more recently predicted that it will rise from 78.8 per cent to 79.8 per cent.

Although Osborne could announce billions more in spending cuts and tax rises in an attempt to meet his target, even he recognises that it would be both politically and economically reckless to do so. Instead, he will partly accept the Keynesian argument that debt reduction must not be given priority over growth.

The governor of the Bank of England, Mervyn King, with whom Osborne has an unspoken alliance, has prepared the ground for the Chancellor by stating that it would be “acceptable” to abandon the target if the economy continues to struggle. But even though Osborne, an arch-pragmatist, accepts such logic, the decision will cause him no small pain. He will, indisputably, have failed on his own terms.

George Eaton is political editor of the New Statesman.

This article first appeared in the 08 October 2012 issue of the New Statesman, Conservative conference special

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When will the government take action to tackle the plight of circus animals?

Britain is lagging behind the rest of the world - and innocent animals are paying the price. 

It has been more than a year since the Prime Minister reiterated his commitment to passing legislation to impose a ban on the suffering of circus animals in England and Wales. How long does it take to get something done in Parliament?

I was an MP for more than two decades, so that’s a rhetorical question. I’m well aware that important issues like this one can drag on, but the continued lack of action to help stop the suffering of animals in circuses is indefensible.

Although the vast majority of the British public doesn’t want wild animals used in circuses (a public consultation on the issue found that more than 94 per cent of the public wanted to see a ban implemented and the Prime Minister promised to prohibit the practice by January 2015, no government bill on this issue was introduced during the last parliament.

A private member’s bill, introduced in 2013, was repeatedly blocked in the House of Commons by three MPs, so it needs a government bill to be laid if we are to have any hope of seeing this practice banned.

This colossal waste of time shames Britain, while all around the world, governments have been taking decisive action to stop the abuse of wild animals in circuses. Just last month, Catalonia’s Parliament overwhelmingly voted to ban it. While our own lawmakers dragged their feet, the Netherlands approved a ban that comes into effect later this year, as did Malta and Mexico. Ringling Bros. and Barnum & Bailey Circus, North America’s longest-running circus, has pledged to retire all the elephants it uses by 2018. Even in Iran, a country with precious few animal-welfare laws, 14 states have banned this archaic form of entertainment. Are we really lagging behind Iran?

The writing has long been on the wall. Only two English circuses are still clinging to this antiquated tradition of using wild animals, so implementing a ban would have very little bearing on businesses operating in England and Wales. But it would have a very positive impact on the animals still being exploited.

Every day that this legislation is delayed is another one of misery for the large wild animals, including tigers, being hauled around the country in circus wagons. Existing in cramped cages and denied everything that gives their lives meaning, animals become lethargic and depressed. Their spirits broken, many develop neurotic and abnormal behaviour, such as biting the bars of their cages and constantly pacing. It’s little wonder that such tormented creatures die far short of their natural life spans.

Watching a tiger jump through a fiery hoop may be entertaining to some, but we should all be aware of what it entails for the animal. UK laws require that animals be provided with a good quality of life, but the cruelty inherent in confining big, wild animals, who would roam miles in the wild, to small, cramped spaces and forcing them to engage in unnatural and confusing spectacles makes that impossible in circuses.

Those who agree with me can join PETA’s campaign to urge government to listen to the public and give such animals a chance to live as nature intended.


The Right Honourable Ann Widdecombe was an MP for 23 years and served as Shadow Home Secretary. She is a novelist, documentary maker and newspaper columnist.