AUTUMN LEAVES AND GREEN ECONOMIC SHOOTS

 

 

 

The last leaves are falling from the trees but George Osborne will be pointing to the green shoots on Thursday in his Autumn Statement.

 

If there is going to be a turning point for this awkward coalition government, this should be it. Apart from that sunny day in the Downing Street rose garden when the two posh boys (as I called them at the time) did the coalition deal, we have lived through unremitting economic gloom. Business investment dried up, the banks went into their shell, wages were frozen, interest rates went to zero. Only inflation seemed to go up.

 

Now at last the economic indicators are looking up and the North of England will be hoping for some sensible decisions from George Osborne to help our part of the world. Although places like Liverpool have shown more resilience than in the past, the North has suffered under the ConLibs particularly in the haemorrhaging of public sector jobs and the popular squeeze on benefits.

 

Unemployment has actually been slightly rising this autumn in the North West and the squeeze on living standards continues as the controversy continues over zero hours contracts. Youth and graduate unemployment remains a real problem in the North and the shortage of new houses remains.

 

So why might this be a turning point for the government. Simply because it looks as if the Chancellor will have all the economic indicators pointing in the right direction for the election in 2015. The news on headline growth and the deficit will be good. Economists are forecasting the following growth figures: 2013 1.6%, 2014 2.3%, 2015 2.5%.

 

Its expected George Osborne will revise down unemployment and inflation figures. There may even be expectations of real wage growth. We’ll then have to wait to see if there is aresponse in terms of business investment.

 

The Chancellor is likely to make much of new figures showing a reduction in public borrowing forecasts, perhaps down to £80bn by 2015/16.

 

Sweeteners for the voters will follow the already announced free school meals and marriage tax breaks. Petrol prices are likely to be held down again and personal tax allowances are likely to rise.

 

The headline measure is likely to be the transfer of “the green crap” that the Prime Minister referred to from energy bills to general taxation.

 

So will Labour be blown out of the water by all this. Ed Balls can no longer entertain us with his flat lining gestures in the Commons. Well not entirely, the living wage issue has been well handled by Mr Ed. The real wage gap from peak remains substantial and GDP per capita in 2015 will be way below the last good Labour year of 2008. Then there is the psychological issue that the Tories fear. If people think the economic pressure is off may they feel they can vote Labour again and get away from all that nasty Tory economic rigour?

 

The Lib Dems will remain associated with Budgets and Autumn Statements right up to the election but we will increasingly hear from them the message that they prevented even more vicious cuts from the Tories and lifted millions out of paying tax which, they claim, was not a Conservative priority.

 

After his statement, the Chancellor will pray that the polls will start turning like the economic indicators. Realistically all the Tories can hope for is to be the largest party in 2015. However if the voters want to punish them for three years of misery and forget Gordon Brown’s administration, then they will hand over a repaired economy to Mr Ed.

 

 

 

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