Autumn Statement Readjusts Economic Vision.

Amidst continuing economic misery and the prospects of further strike action, the Autumn report from George Osborne was quite the focal point of the week inside parliament, no matter what happened throughout the rest of the capital and the country.

With repeated promises of grand strategies and new hope, PM David Cameron has made several hints in recent interviews that this would be an announcement which would once again set Britain along the path to recovery and financial stability.

As expected, the statement did little to improve positivity, yet it is difficult to deduce how far there are failings in this report or its predecessor.

Shadow chancellor, Ed Balls, reacted to the speech by declaring Osborne’s plan was in tatters and concluded that it had been “a colossal failure”. And whilst the announcements in the House of Commons were far from a success, a colossal failure appears somewhat extreme a branding.

A shift in direction has been long overdue: and by employing such a course of action, the current government may have been able to steer clear of certain failings that are current plaguing the Eurozone dominated by Merkozy.  

Indeed, as expected and reported heavily on earlier in the year, forecasts have shrunk and growth is expected to be minimal for the coming two years (which is all the more concerning considering the Olympic Games should provide a boost that is not at all evident in the statistics). Add to this the fact that instead of reducing the deficit, the government is set to borrow an extra £111bn over the course of four years: a projector that means it will have spent more than Darling did previously.

However, it is difficult to condemn the move as liberally as Balls challenged. Without a change in tact, there would have been serious risk of falling into the Eurozone problems of cuts vs stability.

No doubt, the balance between the two is difficult to attain, but this statement goes some way to redress the issue. Money has been released for key areas of growth: infrastructures such as motorways, rail systems and housing complexes all benefit as well as several key industries. The idea is to promote growth that will outlive excessive government spending. By starting the process, it is hoped a momentum of trade and commerce will begin to build and the government can gradually ease spending.

So whilst this means a temporary boost in spending, it remains the long term objective to reduce the deficit. It is interesting that the government has now altered its plans so as they appear a mix of election policies from Labour and the Conservative. Whilst the advocation of more spending is present, there are still harsher cuts.

Whilst the Chancellor accepts that this method actually means more pain now and more pain for longer, it appears that he has chosen this revised plan because, in fact, it will move at a gradual and steady pace: without sudden shifts, confidence will once again overwhelm markets as long as they continue to show signs of future prosperity.

In his retorts, Mr Osborne pointed out that Labour is the only mainstream party in Europe promoting spending extra money. Moreover, Mr Balls’ statements appeared somewhat unfounded as he said the deficit was still too high and yet more needed to be spent.   

      

 His comments, whilst sweeping, could in fact be a sign that this is a move that could save the current government and win them an extra term in office come 2015. There are certainly times of austerity ahead, but economic collapse here seems slightly more distant than it does in centralised Europe… at least for now. 

George Osborne's report at a glance (BBC)

  

Miliband's War.

Labour once again proclaims itself new as the annual party conference gets underway in Liverpool.

In the largest speech of his leadership so far, Ed Miliband announced that there should be action taken against those companies who could be described as “predatory” and “asset stripping”. Mr Miliband outlined his latest vision for a greater Britain, by rewarding smaller companies and “grafters”, whilst also tackling a great number of issues either side-stepped or taken in the wrong direction by the current coalition.

Being elected leader of the party just over a year ago, Miliband is having to make a name for himself and trying to re-establish trust for his party. Although there are no explicitly new policies or announcements, his interview prior to the conference with Andrew Marr suggested that there need be a new stance.

Of course, this is to appear as contrary to the Tory opposition as possible: support for the coalition recently having plummeted according to some polls, particularly for Nick Clegg’s party.

Naturally, as Nick Robinson pointed out, opposition leaders - whether Labour or Tory - declare that they are on the side of hard working people who do the right thing.

In this way, Ed Miliband is pushing ahead with a revival of responsibility.

Almost as if the heralding of a new period of enfranchisement, the Labour leader introduced the initiative fully at today’s conference.

From companies to average citizens, the need to act for one’s community has never been clearer or on such an impressive scale of undertaking. Miliband has argued that companies who offer long term reinvestment and training should have tax rewards: and pointed to Rolls Royce as an example of such an enterprise that should be encouraged.

In addition, the speaker added that “Our first duty should be to help the person who shows responsibility.” He followed up on this by suggesting that those who helped out in their community should reap the rewards through such things as jumping up priority in the housing chain. There need be an introduction of the something for something ideal.

However, many are dissatisfied with this brash approach, insinuating that it was the Labour party themselves that adopted a doctrine of a “something for nothing” ideology and that mantel has continued to spread and debilitate Britons past their spell in Westminster power.

Whilst the speech appears well placed following the backdrop of riots and banking crises, there is belief that the Tory party only served as powderkeg to problems that had been bubbling under Labour administration.

A ComRes poll in the Independent on Tuesday showed 37% of the 1,000 voters questioned said they backed the Conservatives, against 36% for Labour and 12% for the Liberal Democrats. Just 24% agreed that Mr Miliband was a credible prime minister-in-waiting, against 57% who said he was not.

Although Miliband’s speech pledges Labour party to remain the politics of the people and to never again to advantage of the system, Baroness Warsi claims Mr Miliband is not able to promise such.

The Conservative co-chair brought forward the idea that Labour had latterly strangled the small business owners in 2008 through 2010 in particular. Furthermore, the Baroness proved poignant in the statement that "Ed Miliband can't deliver on these promises because his party left the country on the brink of bankruptcy. This is opportunistic rhetoric from a weak leader."

Meanwhile, Ed Balls has unveiled a five point plan for dealing with debt.

The scheme, which he would see introduced following the next elections, would include a VAT cut to encourage growth (similar to schemes trailed by Darling), tax breaks for small firms (not exactly reflected on having economic responsibility) and reinvesting bank bonus taxes in the community.

Whilst Mr Balls acceded to Labour’s previous mistakes, he described the current state of the economy, “the worst in his lifetime” and pointed to current Chancellor, George Osborne, as having the wrong “prescription”. He argued that having a growth plan, rather than a plan of spending cuts, could quickly put a stopper in the vicious circle of deficit and “secure an economic future”.

However, the Labour party has once again affirmed that great swathes of the Tory changes would continue even if they are revoted to power. In this sense, Labour is hiding behind the curtains on a great many of its policies: letting other people carry out the changes and then afterwards showing sympathy without action.

Should the party truly wish to get into power once more, they need stick firm to their principles and act on changes that would not have been introduced. Otherwise, confidence, as well as the economy, will not grow in any forecast. A war of principles vs popularity is underway.