August 2017
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We’re cutting, ooops I mean increasing, the deficit

With MPs away on holiday for two months, we haven’t heard much recently from our podgy useless economically-illiterate, financially incontinent chancellor George Osborne about how he’s successfully saving our economy by cutting the deficit.

Just as well he’s away as Government financial statistics were released at the end of last week, showing that public sector net borrowing was higher in the first third of the financial year than in any other since 2010. Yup, the deficit is starting to go up again (click to see clearly)

 deficit up

The graph shows total public sector net borrowing (the main measure of the total government deficit) for the first four months of each financial year (April to July), in billions of pounds. This figure excludes financial interventions (relevant from 2008 onwards), the Royal Mail pension plan, and the Bank of England Asset Purchase Facility (APF) (from 2012 onwards). It does not take inflation into account.

While central government receipts increased by almost £4bn compared to the same period last year (mainly due to VAT, stamp duty and corporation tax receipts going up), central government expenditure also increased compared to last year.

But given supposed public-sector pay freezes and supposed austerity, how can government spending keep going up? What’s the reason?

The increasing cost of state pensions is often blamed. But there could be one other thing that’s driving up spending – immigration and the high birth rate of immigrants.

Immigration is shooting ever upwards from about 492,000 a year ago to 560,000 during the last 12 months. Around half of immigrants claim they have a job to go to. Wonderful! That means 280,000 people a year – 5,400 a week – are signing up for benefits, help with housing, free healthcare on the NHS, free education for their children, free prescriptions and so on

These 280,000 new arrivals over the last 12 months are probably costing us around £3bn a year in benefits and services.

But even those that are working are costing us money. Anyone with a family earning less than £32,000 a year is getting more in benefits and services than they are paying in taxes. And another 560,000 or 600,000 or more will arrive next year.

Our hospitals are overwhelmed, our schools are overflowing, our police have given up and we have absolutely no control over our borders.

So, how can public spending ever go down? Dear Mr Osborne, can you explain that to us?

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