According to the Daily Mail on Thursday 11 September Britain ‘will be back in the black by 2018’ Budget watchdog praises Tories’ record-breaking recovery – and blasts Labour’s reckless spending.
Now I have said before that I am an Engineer not an economist but you don’t need much more than a primary school education to run the numbers and see that this is about as likely as the utopia that Alex Salmond is offering the Scots. The numbers don’t work for me.
Just look at the chart here compiled from the UK Public Spending website. Numbers are the total of Central Government and Local Government spending in £ billions
|EXPENDITURE||FY 2011||FY 2012||FY 2013||FY 2014|
You will notice that pensions have risen about £22Bn from 2011 to 2014. Health care has increased by about £10Bn in the period and pretty much everything else has stayed much the same.
If you look at the total debt though you will also notice that it rose £200Bn 2011 to 2012, rose another £85Bn 2012 – 2013, and another £93Bn 2013 – 2014. Regardless of the austerity measures the total spending is still going up and I cannot see how the government can put a brake on pensions and health care increases.
The Conservatives have likely done really well in preventing the expenditure running away faster than it has but they now intend to spend possibly £60Bn on the creation of HS2 during the next Parliament.
To meet the prediction of getting the country back into the black between now and April 2018 they will need to reduce the existing annual overspend of £100Bn plus the £60Bn cost of HS2. This will require the government finding savings or income of £50Bn per annum between now and April 2018.
It must be pointed out that the present overspend is occurring despite increased tax revenues from the growth in gross domestic product. In other words expenditure has gone up by as much as any increased income. So we cannot look to increased taxation to provide the necessary savings.
The only conclusion must be that if the Conservatives continue in power in a coalition government (because they have no hope of having a straight majority), then the austerity measures they will need to implement will be eye watering.
Alternatively the Office for Budget Responsibility (OBR) knows something we don’t and that the Chancellor has discovered a lot of fossilised money trees 2000 feet below the rolling hills of England. The only problem there is that the Greens & Liberals will continue their disinformation plan about the risks of fracking and it might never happen.
What is likely to happen is that the government expenditure will continue to rise due to pension and health care costs rising at about £10Bn per annum. If HS2 starts work from April 2015 then by April 2016 the deficit will have risen to £130Bn, by April 2017 to £160Bn and by April 2018 to £160Bn. Won’t it be interesting to see whose prediction is closer, mine or the Government and the OBR.
Now we presently are paying in excess of £14Bn per annum to the EU who kindly give us back in subsidies about £10Bn but dictating how it must be spent, and you can be sure it is not on anything to expand the UK economy, so that money is in effect wasted. I won’t even go into the costs of all the regulations and international trade agreements by the EU and their negative effect on the UK. So there is a saving of £14Bn to be made there.
Scrapping the HS2 vanity project will save an unnecessary expenditure that the government can ill afford. Removing subsidies from so called renewables (a misnomer for unreliables) and disbanding the Department of Energy & Climate Change will save a further £18Bn per annum. Together these savings of £32Bn per annum is enough the put Britain back in the black by 2018. Simple really!
I was taught that to actually save money you only have to stop wasting it. Of course it is only possible to do this if we leave the EU and repeal the Climate Change Act 2008. This and a referendum will only be achieved if a significant number of UKIP MPs are elected in May 2015.
Good reasons to vote UKIP.