After my comparatively upbeat view of the Autumn Statement, I was barraged by readers saying that the underlying position was really much worse than both the Chancellor and I were implying.

One refrain was that the fiscal forecasts from the Office for Budget Responsibility (OBR) were incredible and it was surely wrong to go easy on spending cuts on the back of its revenue forecasts. It was certainly a shock that the OBR raised its forecasts by a total of £27bn.

Even so, it is quite wrong to complain about spending plans being based on mere forecasts.

What else are they to be based on? The key thing is that the forecasts should be unbiased. The OBR is not perfect, but no one should imagine that it “found” this £27bn on the Chancellor’s instructions. That is just the sort of thing that happened before the OBR was established – but not now.

A second refrain from my correspondents was that the deficit figures are just plain wrong.

Why, they ask, do economists and commentators (including me) allow the Chancellor to get away with the idea that the deficit is “only” about £70bn? The true figure, they say, is more like £130bn.

It is true that this year the Treasury will need to raise some £130bn in total, because in addition to financing the gap between income and expenditure, it will have to raise funds to redeem maturing bonds. But so what? This extra amount represents the refinancing of existing debt, not the deficit, which is indeed about £70bn.

A third refrain was that the total government debt is too large and the Chancellor is being complacent in allowing it still to rise. As one correspondent said: “How are my grandchildren going to be able to bear this burden?”

But we don’t need to pay the debt off – ever. A state is not like a person or a household. It has a continuing existence. Moreover, you must be careful about the “we” word. To whom is government debt owed? For the most part, it is owed to ourselves – that is to say, British citizens or institutions who hold gilts. The stock of public debt is a very different thing from net national indebtedness to foreigners.

David Fuller's view

Here is a PDF of Roger Bootle’s column.

All Chancellor’s of the Exchequer need an element of luck, as I last mentioned on Friday.  Nevertheless, I share Roger Bootle’s cautious optimism and believe that the US-led economic recovery is a positive development for the UK. 

Moreover, this country with its moderate one-nation Conservative government looks more attractive for multinational companies and skilled immigrants, despite the uncertainty of Grexit.      

The UK is in a strong position to create most of its own luck by maintaining a competitive and productive environment for more firms such as Nissan (see below) which is developing a new plant in Sunderland.