Osborne buries bad news as OBR predicts extra 130,000 unemployed


Ed Miliband’s response to the Budget focused heavily on the OBR’s downgrading of the growth figures from 2.6% last June to 1.7% in the Budget. But Osborne failed to mention a further piece of bad news: the OBR anticipates an additional 130,000 people will be unemployed in 2012.

Table C2 of the June Budget estimated that the claimant count would be 1.5 million in 2011, 1.4 million in 2012, and 1.3 million in 2013. The revised figures in Table C1 of today’s Budget – reproduced below – estimate that the claimant count will be up 40,000 in 2011, up 130,000 in 2012, and up 130,000 in 2013.

Detailed-summary-of-OBR-central-economic-forecast-Labour-market

Meanwhile, the ILO measure of unemployment jumps 0.2% in 2011, 0.5% in 2012, and 0.6% in 2013.

So much for a Budget for jobs and growth.

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  • jonnyprice

    A few points:

    1. Budget decisions can take a year to have any impact on growth figures. Today’s figures are due to the decisions made by the previous government.

    2. Surely VAT has had to rise to 20 per cent to pay back what was lost when it was cut to 15 per cent?

    3. How can Labour blame the cuts for stalling growth when nothing has been cut yet?

  • Mr. Sensible

    Tonight, my local Tory MP said this in her email newsletter:
    “I have avoided the party political spiel as to the state of the country’s finances…”

    Now we know why…

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  • Anon E Mouse

    jonnyprice – Absolutely correct on the cuts. In social services in South Wales there will be no cuts to children’s services and in fact no one actually knows of any real cuts – just speculative rumours and the unions trying to justify their existence by scare mongering.

    Thatcher claimed to be cutting public services and wasn’t and it seems to me that this is almost a rerun of the 1980’s.

    The unions will be shouting and marching. Labour will be becoming more and more desperate – especially with their flawed leader and the Tories will quietly preparing for the next general election as this budget shows…

  • scandalousbill

    Jonnyprice,

    You ask:

    “How can Labour blame the cuts for stalling growth when nothing has been cut yet?”

    For this statement to be true you would have to demonstrate that consumer spending is a collective description of mass spur of the moment whims. This would perhaps apply to the purchase of a Mars bar, but not for larger ticket items such as an automobile, new cooker, etc. Consumer confidence, on the other can and does have a forward looking component, and can last longer than the events which have engendered its lowering.

    It has been argued that the stimuli provided by the previous government has run its course, and with a stagnant economy and lack of government supplied incentives to consumer spending, (the budget provided specific incentives for business costing, not new business i.e. sales promotion, such as the previous government in the case of the auto industry, consumer spending has, and will continue in the short term at least, to flounder.,

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  • Anon E Mouse

    scandalousbill – This is a budget to win the next general election – not one designed to be popular in the short term.

    Leave aside the (relatively) poor poll leads (Blair jumped Labour’s popularity up by 21%) Labour have every possibility of being ahead by at least 20% within the year…

    And they will still lose the next election. Not just because the cuts aren’t believable. Not just because of having a leader no one will vote for but because irrespective of the governments popularity, Margret Thatcher who was extremely unpopular (not to Gordon Brown’s historic low level obviously) still won election after election.

    It is no good Labour keep saying how good the leader is and it is just an extension of their blind support for Brown.

    The public are not stupid scandalousbill and until Labour start admitting their mistakes they will remain unelectable – it’s time to ‘fess up and move on…

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  • scandalousbill

    Anon,

    You say:

    “This is a budget to win the next general election – not one designed to be popular in the short term.”

    While I would not dispute the likelihood that Cameron, Osborne and the Libdem hangers on fondly hope that all this negative Karma of rising unemployment, economic stagnation in continually downgraded growth estimates, inflation, etc. will all go away by the end of this parliament, I doubt that this budget will be a building block to their ongoing and rather dubious current electoral success. The Tories did not get a majority in the recent election despite the worst electoral circumstances that Labour could undergo. You continually berate Ed Miliband’s in electability, but overlook the fact that Cameron was and is no shining star.

    Osborne boasts that his reduction of corporate tax will stimulate business growth. I do not accept the automaticity that equates a location where profits are declared and were production is undertaken. I do not feel that the announced tax concessions will translate into business growth and greater employment. The cash gained from a lower tax on profits is just as likely, (I would even say more than likely), to simply be siphoned off by shareholders in the form of larger dividends as opposed to providing a cash reserve to hire additional staff. For me, business growth comes from maintaining existing orders and adding new business. Given the global situation, euro zone meltdown etc., it is difficult to see where this business will come from. As well, the announced support for new technologies has about the same relative significance as his money set aside to fill potholes.

    Secondly, there are a number of critical issues the Coalition has yet to address. The prime issue, in this context, for me, is the restructuring of the Banking sector. Do you think that the public you say you understand and champion will gleefully accept the return to the bonus culture, perseverance of the casino style system which largely got us into this mess if the forecasted 2% growth rate is achieved? If Project Merlin is any indication, the Tory coalition will have much to answer for.

    You must also consider that other proposed Tory Coalition policies, such as the NHS and local government restructuring, among others, may not be the howling success the Tories claim, The Big Society is a joke. The pain caused to a great many of the public will not soon be forgotten

    As for Labour, is it a matter of Mea Culpa or explanation of their actions? I think a bit of both. I believe that much of Labours economic spend did much to dampen the worst effects of the Global recession in the UK. On the other hand, the invasion of Iraq and Afghanistan were, for me, a needless drain of human lives and financial resources.

  • Anon E Mouse

    scandalousbill – I wouldn’t vote Cameron – too public school for me but he is in a different league to Miliband. With the exception of Tony Blair, who was a fantastic communicator – just brilliant, Cameron has to be one of the best MP’s I have seen for a long time and he ‘looks’ like a Prime Minister. Ed Miliband looks and sounds like a frustrated student debater.

    Regarding the chancellor. We have a bill on the interest alone of £120million a day that simply has to be paid back and anyway look at Ronald Reagan – he lowered taxes and launched America onto an upward trajectory and I believe, along with most serious financial commentators, that it will work here.

    Labour supporters need to see the big picture and just grow up. Socialism isn’t coming to the UK – it’s been rejected almost everywhere in the world – so anything involving big state stuff is a losing proposition.

    On the banks; does it matter to governments what the public think? We wouldn’t have gone to Iraq had that been the case and the politics of envy will only go so far. Making the bankers poorer will not make others richer. Besides which I want the banks to do well so when they are sold off and a profit is realised we will benefit.

    Four years from now you can see the giveaways already. That’s why I say it’s a budget for the long term.

    I don’t believe there will be as many cuts as they say and once the unions are on strike they will get the blame anyway – there’s history here. I was in favour of both Iraq and Afghanistan but in fairness being a massive Blair supporter I would have believed that the moon was made of cheese if he had said it was.

    I think there may be some agreement between us here on your other points but regarding Miliband I know a dud when I see one and if you’re honest scandalousbill so do you…

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