George Osborne, the UK’s Chancellor of the Exchequer, has the reputation of a master political strategist in the media and in Westminster.
In spite of all the problems, he was still expected to deliver a last minute turnaround that would just be enough to defeat Labour in the 2015 general election.
However, his autumn statement on the state of play of and the outlook for the British economy backfired on the Chancellor. Osborne tried to cover up (1) the failure to meet his own targets with fluffy language and proposed to implement more of the same failed policies in the future. For those, he presented very optimistic projections, which even the Economist, a major advocate of free markets, called “nonsense”.
The main reason Osbornomics has failed to meet its targets and would be likely to fail again is the relentless focus on government deficit reduction. This has led to cuts in real terms pay, rampant job insecurity and greater demand for benefits (2). On the other hand, the government did not hesitate to increase the budget (3) deficit with tax cuts for the wealthy, which have widened inequality. Nearly five years into the Tory-led coalition, living standards for most people have decreased and the overall level of private debt has actually increased. Millions of Britons have trouble feeding themselves and food banks are booming, although the UK is still the sixth richest country in the world. Despite Osborne’s alleged focus on the budget deficit, the target set for this area hasn’t been reached either.
Why? The answer is very simple: the budget deficit cannot in fact be controlled by the government. At the level of the national economy, one person’s spending is another’s income, and vice versa. When the government, which accounts for (4) a large share of the economy, decreases its spending, people will have less money in their pockets, and the overall level of economic activity, as measured by GDP, will decline: tax receipts will fall, unemployment will rise, and the government will fail to meet its deficit targets.
In order to make headway, therefore, political attention should shift from the budget deficit to the real issues: miserably low private investment, falling wages and productivity, a broken banking system and mushrooming private debt.
- Explain the term ‘Chancellor of the Exchequer’ (1st paragraph).
- Why has, according to the article, Osborne been expected to deliver an electoral turnaround?
- According to the article, did Osborne admit the failure of his plans in his autumn statement?
- According to the article, why has Osborne’s plan failed?
- According to the article, can the government control its budget?
- What are, according to the article, the real problems that the UK is facing?
- Do you care about the budget deficit of the Czech Republic?
- Do you think that, economically, the new year will be better for the Czech Republic?
cover up (1) – to keep secret; conceal
benefit (2) – (British English) money provided by the government to people who are sick, unemployed, or have little money [= welfare American English]
budget (3) – the money that is available to an organization or person, or a plan of how it will be spent
accounts for (4) – be the determining factor in; cause
You can find additional explanation and more examples to help you understand and use English words and phrases at https://dictionary.reference.com, https://dictionary.cambridge.org/, https://www.merriam-webster.com/ or https://www.ldoceonline.com/