“TODAY, we take decisive action to deal with the debts we have inherited.” So declared George Osborne, Britain’s chancellor, in 2010 when announcing his plans to close Britain’s structural budget deficit by 2015. He did indeed take decisive action, but it did not deal with the debts. When Mr Osborne delivers his final Autumn Statement of this parliament on December 3rd, he will be less than half way to achieving his goal.The problem is no longer growth, which is roaring ahead at an annual rate of around 3%, nor spending cuts, which have largely gone to plan, but income-tax receipts. They were meant to grow by £11 billion this financial year, but have managed only an eighth of that. That’s mostly because many higher-paying jobs have been replaced with lower-paying ones, and tax cuts for low earners have therefore left the Treasury short. As a result borrowing, which was meant to fall in 2014-15 from £108 billion to £96 billion, has risen by £4 billion and debt will grow as a percentage of GDP this year. At 5.3% of GDP, Britain’s deficit is bigger than those of France, Italy and even Greece.It doesn’t add upThe Conservatives’ latest plan is to deliver a...
from The Economist: Leaders http://ift.tt/15D2RpC
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