Perhaps the Daily Mail, and Mail on Sunday, the Sun and the Conservative party, may like to explain why, when we had a hung parliament we didn't we have the "run on the pound" they repeatedly warned about?
They and Osborne may also like to explain why on the 14th November 2008, Osborne warned that the more government borrows the less attractive sterling becomes. He said: "We are in danger, if the government in not careful, of having a proper sterling collapse, a run on the pound".
It is now widely accepted that Labour would have borrowed less than the Conservatives and that the Tories in just 5 years have added over £470 billion more in debt than Labour managed to do in 13 years!
Far from reducing borrowing, chancellor George Osborne has increased it! The Office National Statistics (ONS) shows that borrowing in the first seven months of the 2012-13 financial year was £73.3bn, that's £5 billion higher than in the same period of 2011-12, which is illustrating the failure of the government's economic strategy.
Who's fault is it and who does Osborne blame this time? The royal wedding? Too many bank holidays? The Jubilee? The weather? Too hot-cold-wet or dry and perhaps took the Treasury by surprise when is snows in winter?
No according to George Osborne, it's not *his* fault at all, this time the fault for *his* increased borrowing and the decline in *his* tax receipts is the fault of a cutback in the production of North Sea gas and Oil.
But wait a minute, isn't this cutback in production in the North Sea a direct result of George Osborne's policy? Didn't he try to make the North Sea oil and gas producers pay a rise in supplementary charge in order to pay for his reduction in fuel tax in his 2011 budget? Wasn't Osborne warned that his £2bn tax raid would result in the industry coming up short by around £50 billion?
And wasn't the North Sea Oil and gas industry going from strength to strength in 2011 before Osborne interfered with it?
According to the sector's annual business survey published in February 2011 it was; UK Oil and gas said: "capital investment in exploration and production has increased by 60% over the past two years, significantly slowing the rate of production decline from the UK continental shelf."
In 2010, the UK produced 850 million barrels of oil equivalent per day. So that's OK then? Yes George?
But wait I'm confused!
In the 2012 budget of total and utter confusion, didn't then the chancellor announce a £160 million brown field allowance for those operators promising further development of mature fields? Wasn't the concession one of several measures trailed in the 2012 budget aimed at tackling fears of a collapse in further investment in North Sea oil and gas fields following the £2bn tax raid by Osborne in his previous 2011 Budget, raising the the marginal tax rate for operators to between 62 and 81 per cent?
So first of all North sea production was doing well until Osborne hit it with a £2bn tax hike to pay for trying to make himself popular with motorists? (And Rupert Murdoch and the Sun newspaper editor).
Then it wasn't doing well so Osborne had to step in and ease back on his tax take?
So as a direct result of his interference, he has all but buggered North sea production for the whole of 2011 - 2012 as well as buggered up the tax receipt in the Treasury and this is somehow the fault of North Sea oil and gas?
Meanwhile tax receipts continue to decline, production in the North sea has slowed, Osborne is borrowing £158 billion more than the previous Labour government would have done and this is the fault of North Sea oil and gas?
It's rumoured that Osborne is going to halt the rise on fuel at the petrol pumps again in his Autumn statement next week, so North Sea oil and gas better beware, as the chancellor may replace the the tax he placed on you in his 2011 Budget and then lifted in 2012, it is now in danger of being implemented again.
I bet poor Chloe Smith who Osborne threw to the lions den of Newsnight with Paxman, instead of appearing person (coward) over his omnishambles Budget on - off, on - off, on fuel price rise back in the summer of 2012 is quaking in her shoes, in case there is another almighty cock-up, which she'll end up being totally humiliated over.
One minute last summer's fuel rise was essential and the next minute it was unnecessary. One minute a Treasury minister said it would cost £1.5 billion to scrap the rise and then later said it would cost £0.5billion, and it was all Labour's fault anyway and Osborne announced that fuel was then 10p a litre cheaper than it would have been under Labour. (At this point the Tories had been in power for 2 years 3 months, and yet apparently this is Labour's fault?!)
What George Osborne the most incompetent fiscally illiterate chancellor in the history of this country doesn't want you to know, is that as well as North Sea cut in production, there is also a cut in production in the construction industry by a huge 10.8%. There is a cut in manufacturing as it tries in vain to absorb the cost of the chancellors massive 2.5% VAT hike and a total fall off in demand for goods as more and more people see their quality of life rapidly diminish under austerity cuts and the public sector in the middle of losing over one million of its workers and the sudden loss of their purchasing power in the market has led to a tanking of consumer confidence, where no one is buying anything, or having anything built. Osborne has forgotten that a thriving public sector feeds the private sector, it feeds the service industry and it also accounts for healthy tax receipts into the Treasury.
Another anomaly is this supposed "fall" in unemployment. If unemployment is falling by the rate in which the Government claim, then why is the benefits bill rising and why isn't there a rise in tax receipts into the Treasury as more people work and pay tax and national insurance? And why is government borrowing rising not falling?
Could it be because the government are pushing more and more people into low paid jobs and the benefit bill is rising because more people are having to come to claim working tax credits in order to manage? So in effect the taxpayer is subsidising the Tory supporting corporations to pay less than a living wage?
There has been an over 50% increase in the number of part-time jobs, this is because it is cheaper for employers to hire two part-time workers instead of one full-time worker and the employer is then able to keep wages down to a bare minimum, pay less national insurance and no holiday or sick pay. meanwhile the government are forcing people to work two or more part-time jobs.
Also part of the reason for falling tax receipts into the Treasury is because the government are forcing people on the government work fare programmes to work full-time for nothing in big companies like Tesco, Poundland, Argos etc. Although they are classed as technically employed and taken off of the unemployment register, they are not really employed and the state, (us taxpayers), still have to keep them and pay them benefits to live on, despite the fact these people are actually working full-time? The taxpayer is once again subsidising the Tory supporting, Tory doning corporations and giving them free labour. So unemployment is not falling at all, in fact it is probably rising.
I have warned repeatedly on this blog that in the end the chancellor's hens will come home to roost and unemployment would cause a huge problem in this country and it is now starting to happen.
So as Osborne is actually increasing borrowing, can he tell us when we should expect the run on the pound he once warned about if borrowing was not not brought under control and we had a hung parliament or kept a Labour government?
Could the chancellor also explain the anomaly of why, when he is borrowing far more than Labour, has more unemployed than Labour, and is paying out far more in benefits than the Labour government did and is taking in less in tax receipts than under Labour (even under the dire circumstances of the worse global recession for 100 years and the global banking collapse), how come the deficit is going down and not up? Could it have something to do with George Osborne borrowing QE money from the Bank of England and paying the deficit down with that? So we are now in the crazy situation of the Conservative government borrowing money from itself in order to pay for borrowing more money to cover its excess spending on benefit bills which were incurred by its own draconian cuts, austerity measures and a massive hike in VAT. The whole idea of QE is to stimulate the banks lending and get the economy moving, but there is no evidence of this happening. The wealth gap between rich and poor in this country is widening and the way this Tory chancellor as managed QE has probably done more to widen it! Mervyn King at the Bank of England estimated that printing all this "funny money" has inflated everyone's assets, which is brilliant for those who actually have assets, but it isn't so good for those who do not! QE figures imply that the richest tenth are better off to the tune of £126,000, while the poorest tenth are almost £300 *worse* off. Once again we are seeing Osborne and the Tories pandering to the rich while kicking the poor while they are down and starving!
Either the Tory controlled government is playing politics with the British economy, or they have maneuvered the economy into such an appalling position that they are panicking and haven't got a clue what they are doing, or the first idea to get it back out again. We are stuck in a fiscal dead end with a sheer drop on each side and just a tattered and frayed rope bridge to return by. What is clear, is that this Tory controlled government are in no way competent for the return journey and before long, they will drive us off the edge of a financial cliff.
It's worth remembering that when Labour left office they handed the Tories an economy in recovery and growth, which Cameron and Osborne turned into a "double dip recession made in Downing Street" we have one small reprieve in Q3 a tiny 1% growth, which was mainly due to the Olympics and personal debt soaring as Osborne tries to force householders to pay their bills through their credit cards and payday loan companies. Now we are enduring the weakest recovery from recession in living memory and we have been left behind by our rivals, even in crisis hit Europe, and the US economy which is still taking the same path out of recession that the UK was on under the previous government their recovery continues to strengthen and slowly improve. As I have explained above about artificially reducing unemployment, which I believe is drastically affecting our living standards as they plummet and wages are being forced down as people struggle to get by on low paid part-time jobs, which in turn is having a catastrophic effect on growth.
Next week we have the chancellor's Autumn statement and it is already rumoured that the chancellor is going to once again attack welfare benefits, forcing the poor to pay for the richest tax cuts, and forcing the poor to pay for free labour for big corporations that can easily afford to pay their staff a proper decent living wage. And to pay for the greed of the Tory supporting bankers that caused the problems in this country and helped to cause the world's economic problems. It's now reached the stage where Osborne's insane measures are not only hurting the poorest, the disabled, the most vulnerable in our society, but it has reached the point where it is going to start affecting so called "middle England".This will have a devastating effect on Osborne's plans for the foreseeable future.
There is absolutely no way out of this because Osborne refuses to acknowledge he is totally wrong and has made the wrong choices and taken the wrong decisions, while he does this, this country will continue to flounder. Osborne and Cameron believe they are iron men, they are not, they are tin men and neither have a heart (or a brain), they are obstinate and totally ridiculous. We need a complete change of government and we need it soon, unfortunately, the only realistic prospect of this would be for the Liberal Democrats to grow a spine and walk away from this coalition and I honestly do not see this happening, they too, cannot admit they called it wrong, blithering idiots! Because of the Liberal Democrats we are losing our NHS to privatisation and losing our state education too. Nothing is being done about the cost of utilities and the poor and elderly are having to choose between eating something or heating their homes. The Tories are returning this country to the dark Victorian days, next we will have work houses and debtors prisons, probably called something new, but this is what they'll be!
One more sobering thought is that Osborne has put much in store of the cheap borrowing rates the UK supposedly enjoys because (he says) of his austerity measures etc (even though Labour managed to keep our AAA credit rating through the worse global recession for 100 years and a banking collapse and returned the economy to growth and recovery without these insane measures of Osborne's). Well apparently the UK's AAA credit rating depends upon Osborne reducing the debt, and if this isn't happening then we are likely to see our AAA Credit rating reduced by all the major credit rating agencies in the New Year.
No doubt right wing papers like Murdoch's Sun will go easy on the chancellor after his statement as some kind of pay off for Cameron being a coward and not implementing Justice Leveson's proposals for the press but if the total confusion of the Budget in 2011, and then the omnishambles of the pasty tax, the granny tax, the caravan tax and the charity tax,, the skip tax and the longest u-turn Budget in 2012 is anything to go by, then we should prepare ourselves for a very bumpy ride as Osborne's fiscally illiterate Budget unfolds on daily basis and more u-turns come along. We have an economically illiterate chancellor and those around him are not much better, time for the rats to leave a "Drowning Street"!
Even Murdoch will not be able to save this tawdry incompetent omnishambolic Tory controlled government of over privileged, out of touch total economic illiterates.!