We had the Autumn Statement last year by the Chancellor together with the last budget on 18th March 2015. Now in the televised question sessions on 26 March more information was revealed by the Prime Minister under the expert questioning by Jeremy Paxman.
For those of us who have studied these things we know the track record from 2010 to 2014 and are close to defining the numbers to April 2015. This is what has been found;-
- The Gross Domestic Product (GDP), in effect goods sold throughout the UK, has risen by an average of 1.9% per annum.
- Tax revenue has remained fairly constant at 34% of GDP.
- Contribution to the EU increased at about 10% per annum as its expenditure spirals out of control.
- Pension payments by the government have risen by 5.3% per annum as the baby-boom generation are retiring.
- Healthcare spending rose by 2.5% per annum.
- Welfare stayed fairly constant till 2015, which was a cut in real terms.
- All other departments averaged at around 1% per annum increase.
According to the Prime Minister the Welfare budget is to be cut by £12b, a further £13b to be cut from other departments and £5b to be raised by ending tax avoidance. Total savings £30b. So for those who say the numbers don’t add up, here is how to do it for 2015 and 2020, with quantities in £billions.
|2015 Where we are now||2020 With the Conservative plan|
|EU net contribution||£8.70||EU net contribution||£14|
|Energy & Climate Change||£18||Energy & Climate Change||£18|
|Sum of other departments||£144||Sum of other departments||£131|
|Overseas aid||£11.80||Overseas aid||£13|
|Interest of total debt||£53.50||Interest of total debt||£81|
|TOTAL OUTGOINGS||£721||TOTAL OUTGOINGS||£804|
|TAX & OTHER INCOME||£630||TAX & OTHER INCOME||£683|
|Overspend (or Deficit)||£91||Overspend (or Deficit)||£121|
|TOTAL DEBT||£1,389||TOTAL DEBT||£1,993|
To get the income and expenditure to balance and clear the deficit needs tax to rise to 40% of GDP from its present level of 34% of GDP.What you should notice is that the deficit has NOT gone away. The other years 2016 to 2019 are on my spreadsheets but to show them here would be too much information.
Ed Miliband was repeatedly questioned by Jeremy Paxman on the economy but did not answer the question and was even accused of making up a new question. He and Ed Balls will not say how they intend to cut the deficit at the same time as increasing borrowing and spending more on the public finances.
They are trying to make us believe that by some magic, increased spending on public service stimulates the economy and generates wealth. When they tried that before it caused the £158b deficit that was inherited by the Coalition. They do not understand that public services are wealth consumers not wealth generators.
It is only the private sector that produces goods consumed at home and exported to other countries, thereby generating wealth and improving the balance of trade. With no cuts declared and only increased expenditure the finances under Labour will look like the left hand table.
UKIP is the only party that says it will actually cut out serious expenditure, which is not benefiting the nation as well continuing the prudent approach to public service expenditure. Various measures we propose (such as exiting the EU, worldwide trade deals, reducing regulation, lowering energy costs) should enable the economy to grow and the tax-take to rise.
|2015 With the known Labour plan||2020 UKIP plan and higher tax take|
|EU net contribution||£14||EU net contribution||£0|
|Energy & Climate Change||£18||Energy & Climate Change||£0|
|Sum of other departments||£148||Sum of other departments||£157|
|Overseas aid||£13||Overseas aid||£2|
|Interest of total debt||£80||Interest of total debt||£58|
|TOTAL OUTGOINGS||£848||TOTAL OUTGOINGS||£751|
|TAX & OTHER INCOME||£673||TAX & OTHER INCOME||£759|
|Overspend (or Deficit)||£175||Surplus||£8|
|TOTAL DEBT||£2,137||TOTAL DEBT||£1,398|
The Conservatives and Labour will continue to give away our money to the EU, in foreign aid and waste it on green subsidies that will drive up energy costs, hurting consumers and manufacturing.Here are the likely options for 2020 that the electors have to choose from on 7th May 2015.
The cuts in public expenditure by the Conservatives will hurt services but still leave us with a deficit more than today and a total debt of nearly £2000b. Expenditure by Labour will not necessarily improve services but will keep down the protests against prudence. The deficit will have nearly doubled from where it is today and the total debt will be 115% of GDP.
Neither the Conservatives nor Labour can get rid of the deficit and balance the books. It is not even worth considering what damage the Greens or the Liberals could do to the economy. Only UKIP financial prudence will seriously reduce the deficit. Unfortunately even that does not go far enough and tax revenue will need to increase through having a truly successful economy to get rid of the deficit and start paying down the debt.