Osborne's Autumn Statement: pain, no gain, lots of blame

CHANCELLOR George Osborne delivered yesterday's Autumn Statement against the backdrop of economic gloom as the Office of Budget Responsibility revised down growth forecasts for the UK and the Government announced it will need to increase borrowing. But things could get worse.
 
Osborne makes the best of it
It was a very political package, says an editorial in The Daily Telegraph. It was "designed to reassure the country that the Government was doing its utmost to kick-start the economy while at the same time portraying the Labour Party as delusional and untrustworthy".
 
Much of the good news about economy-boosting measures had already been trailed by the Treasury, says the editorial. But the startling news was that despite the government's goal of deficit reduction, a decline in growth will mean it has to borrow more than planned. "None the less, Osborne played the difficult hand he was dealt with some skill".
 
But where is the vision?
The politicians and the pundits could say what they liked: the verdict the Treasury needed was the electronic thumbs-up from the markets, says Benedict Brogan also in the Telegraph. "As if on cue the yields on gilts dropped further, reinforcing Britain's reputation as a safe haven in the turmoil raging around us."
 
Osborne's central achievement was to produce a package that entrenched faith in British economic policy, adds Brogan. "At its core was Osborne's willingness to maintain his existing spending plans despite the siren voices".
 
In the end, the Chancellor just managed to salvage his target of balancing the books, says an editorial in The Times. But what was missing was vision. This is a Government "that exudes more determination than imagination".
 
When in doubt blame foreigners
Some of the nightmarish constraints on the Chancellor were well beyond his control, says Steve Richards in The Independent. Others were not. His early decision to cut fast and deep last year and make the removal of the deficit the defining target for this parliament are proving counter-productive. "Osborne will now have to borrow more than projected under Labour's more measured if unspecified spending cuts, a damning statistic."    
 
The Autumn Statement exposed the extent of pain we are suffering for for no gain, says Polly Toynbee in The Guardian. "Extreme austerity is causing £100bn extra borrowing, not less, while everything else shrinks – most incomes (the poorest most of all), employment, order books and exports."
 
It is the foreigners wot done it, says Martin Wolf in the Financial Times. That's Osborne's excuse for how far the economy is off track. This was also Gordon Brown's excuse for the economic crisis in 2007 and 2008. Osborne scorned Brown's excuse then. "Should we now scorn the Chancellor's?"
 
Osborne is right that global events such as the rise in commodity prices and the eurozone crisis have contributed to the current situation, Wolf continues. But so has Osborne's rigid fiscal framework. As a result, it seems the UK is set for a lost decade, with the government arguing there is no alternative. "So blame foreigners: that always works."  
 
It could be worse
Cheer up, it could be much worse, says Robert Peston on BBC News. The gloomy economic forecasts could "turn out to be optimistic". As bad as they seem, they assume that the euro area finds a way through the current crisis and eurozone policymakers eventually find a solution that delivers debt sustainability.
 
But a "more disorderly outcome is clearly possible", adds Peston, and as we move into the New Year with the eurozone on the edge of a precipice, "our economy is too close to the big drop for comfort". ·