In December 2013, I set a target of 3% for 2014 and 4% for 2015 if we're going to balance the books by 31/03/2016. This will enable us to reduce the National Debt to around 60% of GDP by 31/03/2019. In the March 2014 budget, the Chancellor told us the bad news - the government will balance the budget by 2018 and start to reduce the National Debt from then. In the same budget, he gave us some good news: he upgraded growth forecast for 2014 to be 2.7% up from 2.4%; and he will double the amount spent on exports to £3bn which will help the declining export industry.
Recently, the IMF said that the UK will lead the world in 2014 with growth of 2.9% - just short of the WPM's 3%; but will fall back to the trend growth of 2.5% in 2015. This is supported by other economists who claim that growth in 2013 and 2014 is due to the Help to Buy scheme. Although it's due to end in March 2016, any spare cash people have will peter out by the end of 2014. This means that, according to these economic forecasters, the WPM's target of 4% growth in 2015 is next to impossible as the current expansion is spending-led.
Growth of 4% is still possible if wage rises of 2% or more are awarded in 2014 or at least in 2015. This is necessary for the Economic Fractionating Column to work. This is where industry will generate enough wealth to pay it's employees so that they can pay their way and pay down their household debts; plus enough wealth to pay their way and pay down their own commercial debts; plus enough wealth so that they and their employees pay enough tax so that the Government can pay their way and pay down the National Debt.
Now that the Chancellor has missed his target of balancing the budget by 2015 and delayed it till 2018, growth of 4% in 2015 is purely academic. I'm hoping that, in the March 2015 budget, the chancellor will tell us that we'll now balance the budget by March 2017 and in the Autumn statement, he'll update us with the fact that we'll balance the budget by March 2016. The Chancellor will give us a clue in the Autumn Statement of 2014. This is the stuff that dreams are made of.
I'm in the process of setting up a company called FullEmploy whose aim is to reduce unemployment and the skills shortage and maintain them at low levels. FullEmploy will build relationships with 5 types of people: 1. the Unemployed; 2. the Employers; 3. the Training Providers; 4. the Skills Funding Agency; and 5. the Politicians.
I gave each of those types of people likely objectives but the most interesting set was that of the politicians. One of the objectives I set for them was for the UK to be a world leader. This has now been echoed by the IMF within 12 months of my setting it. Now there's progress. I'm still waiting for the Rating agencies to comment on reinstating the triple-A rating for the UK. All they could say is that if Scotland votes for independence, this will delay the reinstatement of the UK's triple-A rating.
By the Autumn statement, we'll know Scotland's situation and what ramifications this has for the possibly dis-united kingdom.
