Whatever Osborne says, there are five ways to fuel the economy

Who would want to be Chancellor this week? In my 30 odd years of analysing budgets I have never known a situation as grim as this.

Of course there have been bad times before, but what makes the current position so ghastly is the apparent lack of hope. The Chancellor may try to run the notion that once the deficit comes down then things can get better again. The trouble is that no one really believes him anymore.

TruthDestroysWorlds: The fact is, Britain is now up to its neck in debt, and we now manufacture and export very little. A situation which has actually come about over time due to an excessive growth in 'non productive' government, combined of course, with a dramatic rise in taxation that has been required in order to pay for all of that said 'non productive' government. Money that really ought to have been used by manufacturing companies, in order to both streamline and expand their businesses. Improvements that would in turn have allowed them to compete for work on the international stage, and so create jobs. The truth is, manufacturing is where its at, not MONEYLENDING. Especially seeing as we don't currently have any.

RejoiceRejoiceRejoice: "don't currently have any"… 7th largest manufacturing economy in the world. Manufacturing is worth 140bn a year to the UK, employs 2.5m people and accounts for 50% of the UK's exports. Don't talk balls.

mrreed: Voodod Chile  "don't currently have any"…  I think referred to not having any money, not to manufacturing capacity.

RejoiceRejoiceRejoice: Oh, ok. Although TDW does say "we now manufacture and export very little" early on.

dandaniels: But what you fail to mention, voodoo economics is that it's in rapid decline. The UK's actually ranked 15 in the world for manufacturing competitiveness just behind Poland and Malaysia. Strip out financial services/north sea oil which is in terminal decline and it gets worse. In another 5 years the UK's projected to be around 20th in the world with much of the world leapfrogging the UK. Everyone from Vietnam, Indonesia, Thailand, Mexico. Just so you know Greece and their magnificent economy of wonders stands at 38. Saying things like we have the 7th largest manufacturing economy in the world is complete fucking twaddle. So don't talk even bigger balls. Suggest you read the 2013 Deloitte's Global Manufacturing Competitiveness Index. The UK isn't even on the map anymore.

RejoiceRejoiceRejoice: What's with the stiffing and blinding, little man; why so angry? We are NOW the 7th largest etc, etc. In response to this inconvenient fact, you're coming up with an essentially worthless (because speculative) series of warmed-up second-hand predictions which are of unknown value and accuracy.

postkey: Here is another view? Britain will be the biggest economy in Europe with one of the wealthiest populations in the world by the middle of the century, according to leading economists. Long-term forecasts by investment bank Goldman Sachs suggest the UK will fare better than its neighbours over the next four decades. Britain is the third biggest economy in Europe behind Germany and France, but by 2050 it will have leapfrogged both countries. http://www.dailymail.co.uk/news/article-2080402/UK-economy-biggest-Europe-4-decades-say-experts.html

RicharddeLondres: Really? I don't think so. Europe's biggest companies are sitting on £445bn of cash. The cash pile of non-financials in Stoxx Europe 600 index is 16% higher than at the end of 2007.

Greenbacker84:  TDW, The scum running this place arn't even lenders, their money CHANGERS. They do nothing more than launder the money WE create in every single loan/mortgage and multiply our debts with compound interest. Under these conditions of usury, there is never enough money in circulation, taxes increase to pay this falsified national debt, and consumption/production are strangled as purchasing power is diminished. All the money we could put towards commerce is instead used to pay money changers for money we created on the spot, which could be retired principal alone. I cant see us getting a level manufacturing industry, while the means of exchange is still controlled by banks and subject to compound interest. australia4mpe

martincarter: If the EU and the Euro wasn't in its death throws, we'd be once again the sick man of Europe. I'd be happy to leave the foreign aid budget intact if Osborne pulled us out of the EU and saved all the net contributions and the red tape.  It would be the first step in taking back control of our own destiny and repairing the economy. Then there's the vast amount of money being wasted on apprenticeships.  Wasted, because most of it is going into 'training providers' and quangos' pockets for very little added value.  Reduce company taxes and they might be able to employ a few more young people and train them.  The current system simply doesn't work. Don't forget, too, the £millions paid out to councillors (and from there in part to political parties).  We don't need to pay councillors.  Pickles has stopped them getting pensions at our expense; now it's time to stop them living it large at our epense.

Carol: Cancel the workfare providers and cancel employer Nat insurance for 2 years on employing fulltime above min wage workers who haven't worked for six months or more.Do away with the bedroom tax/subsidy and cap rents in private sector to social housing rates locally. Keep the benefit caps. Sack atos and issue support on consultant or professional evidence only. Remove vat on water gas and electricity bills. Build social housing. Half vat on business petrol and diesel. Scrap child benefit and childcare costs. Open school buildings for childcare nursery after school clubs and youthclubs under one roof. Opening times from 6 in morning unto 10 at night. Provide free breakfast lunch and tea. Nhs create a non qualified ward assistant for every six patients to assist in feeding and washing each patient. Cap train and bus fares to reflect a third of car travel cost.  Tax company expenses. Half Businesses rates on non London based buildings, shops, warehouses and workshops etc. Cancel Nat Insurance and employer taxes for 3 yrs on provision of apprenticeship's for under 25 's  on company schemes lasting the full 3 yrs. And leading to full time jobs on completion. Increase non uk resident workers company taxes by 1% Cut the welfare budget by offering real work not bullying non paying stigmatizing non aspiring workfare placements which only enrich the likes of A4E

Rods: Or he could take a leaf out of the Cypriot's books and tax all savings with a one off tax where Governments always seem to think they can spend our hard earned money better than we can! They have wasted almost three years of a five year term to do anything meaningful to get the economy back on track and we are too near to the next election for the Chancellor to do anything other than tinker around the edges. So the outlook for the next two years is stagflation and stagflation with falling real wages. You really can't expect anything different when the Government spends 49% of GDP, has a tax take of 43% and rising and is running a 6% deficit with a debt to GDP ratio of over 90%.

truthmatters: "In…30 years…I have never known a situation as grim as this."  Roger Bootle Can this be the same Roger Bootle who only a couple of weeks ago in this column was lambasting the Chancellor for being a prophet of 'doom' and not 'talking up' the economy enough?!

sevendeuce: For some reason the measures that would most transform the economy are not regarded as being economic policy. Leaving the EU and putting a stop to immigration would dwarf any of the measures mentioned as a boost to the economy.  Not only would we save the money we currently squander on EU membership, but we would be vastly more competitive without EU red-tape. And stopping immigration would release countless jobs to our own unemployed, with a massive effect on the welfare bill.  Chances of this happening any time soon… zero!

adamc18: High and rising energy costs and an ageing population alongside the replacement of wealth-creating manufacturing with money-circulating activities like banking, hairdressing, public expenditure and shopping mean that 'recovery' and 'growth' just can't happen. 

justareindeer: Of course any smart housewife would know what to do: With no more proceeds coming in, she has to cut spending. Will she cut lunches, dinners, winter cloths or boots for the kids - or will she insist to stop weekly outings to the leisure club and pubs, to the movies and the weekend rides into the country side? The Chancellor should also know where to cut: It can not be at the weakest cutting their £ 72 allowance, but he has to question the waste in Government quangos, as well as top pensions and pay for unnecessary cushy jobs in the administration. As said, any housewife would know those basics.

truthseekers: Your mistake is treating the economy as a household - If the Government make cutbacks while the private sector continues to moves sideways rather than up you will reduce economic demand even further - You cannot have growth by cutting spending -

fluro: If I was chancellor I would stop borrowing money to give to other countries,stop borrowing money to pay child benefit(I bet children would still be born),stop borrowing money to pay tax credits,let the employers pay a proper wage!Stop borrowing money to pay the  membership fees of the most inefficient,incompetent,bungling EU,abolish VAT,which would reduce the price of fuel and just about everything else,stop borrowing money to pay inflated London rents for unemployed people,relocate them somewhere cheaper after 6 months, stop asking power companies to run energy efficiency schemes which are financed by the customers.

FREDERICK: The bad economic times are only going to get worse as the welfare/entitlement class expands.  Nations with large welfare and entitlement segments are just starting to learn the unsustainable costs of such programs. Pensions which have really only come into being since post WWII, are already in horrible fiscal trouble, especially the public sector unions paid for by taxpayers.  Welfare in the USA has grown 32% since Obama took office to where it is now the number 1 cost in their yearly budget at 746 Billion dollars per year, surpassing Social Security and Medicare.  Those 3 programs by themselves account for all the revenue received by the US treasury each year, 2.4 trillion dollars.  They borrow an additional 1.6 trillion just to pay for everything else. Until welfare is treated like unemployment insurance and capped and recipients are made to earn that free charity by working or cleaning up our roads, public areas,  fixing potholes and other needed services, the fiscal downward spiral will continue ,as the welfare class will continue to explode at 4x times the average of workers providing all that free money for nothing!

RicharddeLondres:  If you want to see what’s wrong with America take a good look at the nauseating list of the 400 richest Americans. While the economy struggled to create jobs, it was another banner year for the super-rich. They increased their collective wealth by a whopping $200 billion, which is more than enough to provide every student in the country with free higher education. While the richest 400 Americans increased their wealth by 54 percent since 2005, the median middle-class family saw its wealth decline by 35 percent. Welcome to the new America!

mrreed: A sixth alternative. Re-direct QE. Instead of printing money and buying Gilts from the banks, he should print money and finance public sector infrastructure projects - and preferably those that otherwise would not be funded. Elsewhere in this paper there is the discussion about Nuclear power. If EDF do not agree to 8p per kilowatt hour guarantee, he should nationalise Hinkley point - paying EDF a fair price, then arrange for the UK government to fund and build the nuclear power station with QE money.  Its a project we need, it would utilise many unemployed workers, cut the welfare bills ( jobseekers/ Housing benefit/Council tax etc) and  when complete could be sold back to the private sector, and the money raised used to reverse the QE. The same argument is valid for a water grid, a high speed train network, 100,000 new homes and the Severn barrage. Given the fiscal multiplier is around 1.7, expenditure like this is nearing self financing- before resale back to the private sector. After sale to the private sector it is likely to contribute positively to the Government finances - So why not? The argument that the projects, if not funded by the private sector, cannot be economically justified, is hogwash. State involvement in these projects is essential to get through the planning/political constraints and also because of their size. Could the UK have left the Olympics solely to the private sector for example? No - huge government involvement and support was needed. In some ways this sixth proposal is similar to the second outlined above. Given that QE would not be available as it is at present to indirectly fund the Governments current spending programme, other non-growth creating expenditure would have to be cut, eg Foreign Aid, welfare payments, Afghan war, Aid to Syrian rebels, whilst the QE money would go straight into growth generating infrastructure instead. It is a question of priorities, and given the danger the UK is in, it is high time Osborne adjusted those priorities to put growth at home first.

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