Glass Half Empty

 

Interesting listening to the aftermath of Osborne’s budget speech on the BBC…you’d hardly know that Ball’s got a pasting or that Labour had been soundly trounced.

You’d have no inkling that Osborne’s budget was based on a solid recovery and gave help to all levels of society….no inkling that under Labour 7.2% of the economy was destroyed.

 

Some key phrases from the OBR report upon which the budget is based:

In 2018-19, we expect the underlying balance to move into surplus for the first time in 18 years.

There is a roughly 5 per cent chance that the economy will shrink in 2014 and a similar chance it will grow by more than 5 per cent.

We  expect quarterly GDP growth to slow into 2014, gradually strengthening thereafter as productivity picks up and real earnings growth provides the foundation for a stronger and more sustained upswing. This recovery in productivity growth is perhaps the most important judgement in our economy forecast.

 

Note that ‘This recovery in productivity growth is perhaps the most important judgement in our economy forecast.‘…because the BBC doesn’t look at that….it just tells us that the recovery is a ‘false recovery based on consumer spending and borrowing’...but the OBR says that whilst there will be a slow down in 2014 after that the economy will grow based on productivity gains.

That is not something the BBC seems to want to advertise.

Here Nick Robinson and Robert Peston are carping, negative and critical of Osborne’s measures…for example the decision not to raise the car fuel duty…Imagine what they could do with £22bn – that, the chancellor revealed, is the cumulative cost of the ever-popular cancellation of planned rises at petrol pumps.

Ironic coming from Robinson…the same person who, when at ITV, took Labour to task for suggesting that the Tories would ‘cut‘ the NHS by £35 bn when the truth was they just wouldn’t match Labour’s proposed spending rise but would keep the budget at the then same level….but now Robinson plays the same game….categorising a future non-rise in income as a spending cut.

 

 

 

 

Here are some of the BBC’s key pointers for critiques of the Coalition that seem to be the editorial backbone to most BBC analyses:

First...Use the Labour narrative (contrast with how they talk of terrorism or the security wall in Israel)…Plan B is credible….and when proven not…go with the new one…the ‘Cost of living crisis‘ is real…and caused by the government’s policies….no one has ever been ‘poor’ before May 2010.

Second….Actually let’s not look back to Labour times...let’s talk about now…in other words let’s not blame Labour for the mess we’re in now.

Third…’Austerity’ is the real cause of our problems….and it isn’t necessary….‘Austerity’ is a purely ideological imposition….the Coalition is on a ‘mission to shrink the government beyond responsible economic stewardship’  That was the BBC’s Dominic Laurie…who seems to have stepped into Paul Mason’s loafers and taken on the mantle of advocate for big government, nationalisation and State intervention.

Fourth….Every government policy that is seen to benefit anybody is ‘electioneering‘ or ‘crowd pleasing populism’…whilst Miliband’s ‘price freeze’ was socially responsible policy making.

Fifth…..the recovery is a ‘false recovery’…based on consumer debt, the spending of savings and borrowing….‘BBC Political Editor Nick Robinson said the government was worried economic growth might not continue as it was mainly based on consumer spending’, (but don’t suggest going back to look at Labour’s record……after all wasn’t that the exact recipe for the leveraging up of the financial crash? Rule 1 applies…let’s not talk about Labour.)  It is remarkable how the BBC manages to ignore all those businesses who say they are doing a roaring trade and go on to paint a picture of doom and gloom.

The OBR does say consumer spending has boosted the growth, but here it explains a major factor in that spending….’Some forms of credit growth have picked up, in particular car finance, which has supported strong growth in car purchases and contributed to the unexpected strength of private consumption.’

Now it was only a few weeks ago that the BBC themselves looked at car buying and concluded that the rise in buying was due to more innovative and cheaper finance packages that gave customers more flexibility at a cheaper price…..I have to assume most people will have looked at their budgets and decided they can manage such deals….unlike the BBC who has decided that they are being reckless and spendthrift…based on what evidence they don’t say.

The OBR says that growth is coming from  increasing productivity, though still too low, but a productivity that will take over as the real driver of growth towards the end of next year….its most important judgement….and one the BBC ignores.

 

Remarkably you can hear all those points in one little interview on 5Live  (13:20) with the government’s Financial Secretary to the Treasury, Sajid Javid.…who held his own against three hostile BBC inquisitors.

 

 

Here is the Telegraph’s initial reaction…entirely different tone to that of the negative BBC:

The boot is on the other foot. Labour MPs now know what it was like for the Tories to have to sit through year after year of Gordon Brown economic triumphalism. For most of Labour’s time in power Budgets and Autumn Statements – or Pre-Budget Reports as Mr Brown rebranded the latter – were an ordeal for the Conservatives. He would rattle off great economic good news and a succession of giveaways, while they just sat there powerless to object. To this day watching Labour fritter away the golden economic recovery they inherited from John Major still rankles. Today, for the first time, George Osborne had a script he wanted to deliver, about economic success and measures that help voters and businesses. Perhaps the most telling moment, the one that caused a collective gasp, was when he revealed the updated figures for what he called the ‘Great Recession’ and a ‘calamity’: at the height of the crisis and on Labour’s watch GDP contracted by a jaw-dropping 7.2pc.

Here was a catalogue of smart, well-judged measures that MPs can deploy on the doorstep as evidence of what the Government is doing to – as Mr Osborne said – get the country moving again. These delighted his own side and left Labour looking as if they now realise how wrong the Ed Balls economic strategy is turning out to be.

His statement also completes a remarkable political recovery for the Chancellor. The economy is the only thing that matters. But it should be noted that a year ago he was in deep trouble. The economy was going against him, his reputation was damaged by the omnishambles budget and he was in danger of becoming more unpopular with the public than is normally bearable for even the most thick-skinned politician. The moment when the crowd booed him as he presented medals at the paralympics was a personal low-point. To his credit, he never faltered, or tried to win easy popularity by trying to doctor his image. Now, he can bask in the plaudits he deserves for placing a bet and seeing it pay of. As he pointed out, there is still much work to be done. But for the moment at least he has an inkling of being a Chancellor who is master of all he surveys.