[Copied and pasted from my external blog. Please do take a look. I'm trying to update regularly, every few days or so]
So, it’s happened. Chancellor of the Exchequer, The Right Honourable George Osborne (MP for Tatton), has stood at the dispatch box, and delivered his “emergency budget”. And despite some speculation in the press, pretty much everything that was feared has come to pass.
Now, I know there are a lot of blogs on the budget already going up on the internet, and I’m going to endeavour to make sure this isn’t a knee-jerk reaction to the proposals. It won’t be a politically neutral one (anyone who knows me, will know that political neutrality is not one of my strong suits), but it won’t be indiscriminately critical. Because it isn’t entirely bad. There were gestures made, concessions given.
The expansion of the Child Tax Credit is a good thing. The banks taxis a good thing. The declaration that we won’t join the Euro is a good thing (though puzzlingly unnecessary, since I don’t think anyone was seriously proposing joining). But what was given with one hand, has been taken away with the other. The Child Tax Credit expansion is countermanded by the child benefit freeze. The banks tax was countered by the cut in corporation tax which they will enjoy. And as I’ve already said, the Euro declaration was fairly meaningless on a grander scale.
But the worst part is the VAT hike. David Cameron has been widely quoted today and in the previous few days, and I think I’ll jump on that particular bandwagon right now: “[VAT is] very regressive, it hits the poorest the hardest. It does, I absolutely promise you.” He was right. It does, and it will. The 2.5% rise will raise further revenue to cut the deficit, but at the expense of the poorest and most vulnerable sectors of society. A fair trade? Apparently it is, if you’re a Tory.
Or a Lib Dem, for that matter. Throughout the delivery of his budget, Osborne was flanked by Nick Clegg and Danny Alexander, his Liberal Democrat scapegoats, and as Alistair Campbell said, they looked like nodding dogs- even despite looking slightly sick at the VAT announcement. The fact is, that this is their budget. They have supported it, and allowed it to happen, despite the fact that they specifically campaigned against a Tory VAT hike. How short the yellow memory is.
The fact is, that cuts are necessary. The deficit does need to be cut down. There is a reason that we have it, and that reason is that we spent ourselves into debt to get ourselves out of recession. But that sacrifice will be rendered meaningless if overzealous cutting takes us right back into economic decline. Cuts must be counterbalanced with the growth of the economy, today downgraded from previous estimates in the wake of this new budget. Cuts will increase unemployment, which will lower tax income, and thus make the whole damn mess a whole lot worse.
The real travesty of this budget to me, is that it was lauded as a “fair” budget. Everyone would share the pain. We were all in this together. It was awfully hard to take all of that seriously, when the budget was delivered by a government front bench crammed with millionaires, whom these new austerity measures won’t scratch. I will bear the burden of these measures, when I can’t find a job after university. Poor families will bear the burden of these measures, with less of the vital benefits they need, whilst being forced to pay more for everything due to the VAT hike. George Osborne has taken a 5% pay cut, that amounts to his pocket change. That is not fair, and that is not evenly shared pain.
But hey, cider duty has been cut, so everyone can get drunk to celebrate not being able to afford anything else any more.
(The full text of the budget is available on the HM Treasury Website)
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