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Autumn is the Season of Change, Unless it's an Autumn Statement

There are no forecasts that I can find for the UK that say anything other than relatively flat growth for the next few years and we are forecast to have debt as a percentage of GDP at in and around 100% for the next few years.

When the Government say that they now have room to make tax cuts in today's Autumn statement, what they mean is that to placate the right and to try and resurrect the Conservatives electoral chances, they absolutely 'have' to make tax cuts. The only economic reason to do so seems to be that tax income is better than expected, that is a good thing, but potentially only temporary.

What is clear to me is that today's expected tax cuts are the usual pre-election bribes that we see at this point in the political cycle. I am sure people and businesses will be very happy to see themselves better off for the next year or so, but we should also all understand that it is extremely likely that at the first budget or autumn statement after the election, the tax cuts we are given today will be reversed in some way or another - whoever we see in power.

Yesterday I was listening to the excellent Political Currency podcast from George Osbourne and Ed Balls (sorry - I can't recall which episode) in it George Osbourne makes the point that in the run up to the 2015 election he wouldn't have been able to resort to pre-election bribes because their Lib Dem partners in Government would not have let them. Is this yet another reason for us to consider Proportional Representation?


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