Listen — Fraser Nelson on what the budget means:
Yes, it’s a recovery. The good parts of the Budget will be all over the media right now – the Treasury is very good at broadcasting its achievements. We’ll cover them too, in a bit. But for now, in the interests of balance, here are some graphs that you won’t find in the Budget, using data taken from its small print.
1. The Deficit – an improvement since last year’s forecasts (thanks to higher growth). But still far adrift from what Osborne promised initially (in yellow, below).
2. Osborne fails his own debt test. The Chancellor congratulated himself for sticking to the course. “We set out our plan. And together with the British people, we held our nerve.” Not on debt, he hasn’t. In his career as Chancellor, Osborne has set only one target in stone: that the debt/GDP ratio would fall between 2015/15 and 2015/16. He gave up on this a while back. The OBR is still required to judge him each year on whether he’s likely to hit this target. Part of the reason for setting up the OBR was that it would act as bad cop, lambasting the Chancellor if he gave up on his promises. Instead, its own small print says only “The government is still on course to miss its target”. The OBR says the debt ratio will rise (by 1.5 per cent) over that period.
Osborne’s original plan is in yellow. The published Labour plans he once disparaged are in blue. His current plan now is in red.
2. National Debt. Continued. You can see the effects on the whole debt pile here. Osborne’s still borrowing more in five years than Labour did in 13 – in nominal and real terms.
3. Yes, there are upgrades. But downgrades, too. The below compares the growth forecasts – the OBR has upgraded this year, but downgraded in later years. It’s a wash.
4. And it’s still the worst recovery in history The 2.7 per cent growth for this year comes after pretty bad growth. Put into historical perspective, Britain is still midway through the worst recovery in our history.
5. Only Italy has had a worse recovery You’ll have heard George Osborne listing all the counties we outpaced in the last quarter of last year. But look at the last few years, and how do we compare? Don’t ask…
6. Earnings – 15 years of hurt Yes, you’ll hear on the TV that earnings are expected to rise a bit more than inflation. But it depends which inflation: RPI or CPI? The below graph shows that even in CPI, it’ll take 15 years for the average wage to recover to where it was. You may get a penny off a pint, but the rest of your shopping will be as expensive as ever.
And finally, jobs – a non-scary graph. It is the one undiluted good news story of the Budget.