On 29 November an updated report by the OBR will be published and George Osborne will give his reaction to it in the House of Commons. In July, when the OBR last reported, Alan Budd was at pains to underline that his forecast was subject to massive uncertainy and that the Government’s policies to reduce the deficit had only a 40 percent chance of success. Despite these uncertainties commentators in millions of miles of typescript have confidently forecast the future whether they were predicting runaway success for the Coalition or double dip recession. Arguably, anything that has happened over the last six months should be written down to the Labour Government, credits and failures alike, but anything that happens from this point is down to the Coalition whose plans have been solidified. What will the OBR forecast reveal?
1. Uncertainty. Levels of uncertainty will be as great for our economic future is in the main determined outside the UK by happennings largely outside our control. World economic growth has slowed, currencies are in turmoil and British export growth is more precarious.
2. Growth and Employment. Alan Budd’s confident 2011 forecast of growth in the economy and high employment will be scaled back. In 2011 there will be no double dip but a churning along in bottom gear. Unemployment will rise in the immediate future before falling in later years.
3 As a consequence tax revenue will be scaled back and progress on deficit reduction will be slower.
Here is a point then of realism.This is how the pigeons will , most likely, come to roost. And what is to be done now after the gloss is worn thin? George Osborne will bluster it out. What else can he do? But this call to reckoning is not for the Coalition alone, for eyes an ears will point at Labour. The electorate will wish to know what Labour would do if the Government. If Labour wishes to be pragmatic and oppositional and take things year by it must at least come up with a clear statement of what it would cut in 2011/2 and what changes in taxation it now supports. Labour is in danger of losing public respect by obfuscation. It is time for Labour to be transparent and convincing behind a coherent policy agenda.
If Labour does this the electorate can choose. The lists will be drawn and the true battle begin. The economic future will remain murky but the issues will be rendered clearer. For Labour it is a call for Leadership.