George Osborne's definition of "intergenerational fairness" has been questioned by leading economists. They say, "risk should be shared out across generations".
George Osborne’s declaration that his first Budget was “fair” because it attempted to prevent debt being carried over from one generation to the next has been called into question by a group of leading economists brought together by the Bank of England.
Facing criticism about the distributional impact of the June Budget, George Osborne sought last week to include “intergenerational fairness” into his definition of “progressiveness and fairness”. In a speech to the City, the Chancellor said:
“And fairness extends across the generations, for what is fair about forcing the next generation to pay for the debts of our generation?”
But the summary of the Bank of England’s recent Monetary Policy Roundtable included a line which stated that:
“risk should be shared out across generations: a single generation should not be expected to bear all the costs of having the bad luck to experience a war or a financial crisis directly.”
Most of the increase in Government spending in recent years has been caused by financial interventions or automatic stabilisers such as increased unemployment benefits. Total spending was around 41 per cent until the financial crash. It stood at 47.5 per cent in 2009-10. (see Chart C5 of the June Budget)
The minutes of the meeting are reported in today’s Financial Times and cast doubt over the Bank of England’s stance on spending cuts. The paper reports that:
“Economists present at the event said there was less room for the Bank to offset public spending cuts with lower interest rates, because the accelerator pedal of monetary policy had already been pushed to the floor. Meanwhile, they said, leading economies worldwide were planning to take an axe to public spending simultaneously, potentially amplifying the pain…
“The average forecast for growth next year is 2 per cent among independent economists, but the Bank believes growth will be 2.8 per cent.”
29 Responses to “Leading economists question Osborne’s definition of “intergenerational fairness””
Anon E Mouse
Simon Landau – The point I was making was that the mess we are currently in has been accumulating for years and therefore the remarks about a financial crisis should not apply in this case or at best just the QE aspect of it.
Anon E Mouse
Chris – You’re being obsessional Chris and once again your compulsiveness is making you smearing and rude. Please stop it.
Can you also try to stop the bad language. This blog often has heated discussions but most people are polite enough to avoid swearing and I would so miss your posts if the blog rules were not adhered to.
Anyway your diatribe is as usual inaccurate; let’s just take one of your points.
I said: “There are so many different government “projects” that should never have been approved. For example The Assets Recovery Agency was set up in 2003 and cost the taxpayer £60million to recover just £8million.”
You said: “Oh please enough of the tory myths”
The numbers are here: http://news.bbc.co.uk/1/hi/uk_politics/5077846.stm
Results in it being discontinued: http://news.bbc.co.uk/1/hi/uk/6251339.stm
You are clearly insulting me and telling lies at the same time and I really think you should moderate your comments in a public blog Chris.
Don’t forget Labour lost the election for a reason – it didn’t just happen by accident you know. Oh no it didn’t…
Chris
@Mental Mouse
Oh, yawn, Mouse your disappointing me – have they coshed you again? You can talk about smearing, I’m just taking the piss, you accused Joss Garman of being a drooling apologist for the previous Labour when he was a noted critic of their policies. I note that the only point you pick me up on is my throw away comment referring to your characterisation of government “projects” being a waste of money, while they’re examples of failures with all governments of whatever party. Your trying to smear all government spending as wasteful, it isn’t, they’re many examples of “projects” that have really helped people, communities, etc but you choose to pick on the few failures.
“You are clearly insulting me and telling lies at the same time and I really think you should moderate your comments in a public blog Chris.”
I’m not insulting you, nobody knows who you are! And where am I lying? If you can’t take it buddy don’t going trolling on websites.
Redstar PCS NStaffs
RT @http://twitter.com/leftfootfwd Leading economists question Osborne's definition of "intergenerational fairness" http://bit.ly/av7Ln2
Anon E Mouse
Chris – Well since you have been shown to be comprehensively wrong on the one point I did bring up (your “Tory myth” delusion/lie) let’s try another.
The PFI schemes – You said: “No, while the a few of the first PFI agreements were cock-ups later ones are actually fairly good value for money as the PFI contractor has to maintain the builds and provide certain services for the money.”
Which ones are good value for money Chris? And please note I use the present tense for a reason. I expect things to be very good value for money or they shouldn’t be done btw.
Link to the BBC here: http://www.bbc.co.uk/news/health-10882522
So £11billion will now cost us over £65billion or are you going to say the numbers are wrong here? And what if it’s more than that?
Your normal response is to ignore the question, let your compulsive/obsessive nature take over and you’re off being rude in blogs.
By the way I opposed these things when the Tories invented them and was staggered that the Labour party continued the idea and here’s why. By putting the hospitals and other schemes into the hands of the private sector one immediately relinquishes full control over them and leaves them at risk with private commerce – and please don’t start screaming about contractual agreements on costs. Good lord I sound like a socialist…
Anyway just take a second and think about what you’re typing before you press RETURN Chris and remember: Labour lost the election for a reason…
We can do Liam Donaldson and that fiasco next time I’m sure…