Wednesday, 23 June 2010

The Budget

Every time there is a budget the BBC releases a useful budget calculator to work out the effect any changes announced will have on your wallet. I usually fill it in, finding that my consumption of alcohol is the only part of my lifestyle to cost me money. This time the freezing of duty on alcohol leaves my wallet untouched, but the point is that until I start earning an income, the budget has little effect on me personally. It may be selfish, but this prevents me from really poring over the detail of the budget document and coming up with a coherent argument on the key points. Instead I'll offer some basic observations:

  • The VAT rise, the headline-maker, is disappointing, being both regressive and coming without any kind of mandate. The Lib Dems especially will take a bit of a kicking on this, and is another clear indicator of the drawbacks for them of the coalition agreement
  • Some of the changes in benefits and tax credits- though popular with the right-wing press- seem particularly harsh. Examples here and here
  • The public sector would inevitably take a hit with the British economy in the situation it is. Whilst Labour would obviously prefer to be in office, it suits their narrative of 'nasty Tories' that the pay freeze for those earning over £21,000 and the pension review comes under the Tories' watch
  • The budget was worryingly sparse on green issues. As Caroline Lucas said, it 'nails the lie to any idea that if you vote blue you get green'. It's disappointing the lack of criticism the it has received on this front
Whilst many commentators declared yesterday as the defining moment of this parliament, we will not know quite how defining it is until we start to witness its effects. Balancing the books by the next election is an ambitious target, and one that, should it go wrong, could leave George Osborne looking foolish. For the moment he has the support of the majority of the press, and it is down to him and his Liberal Democrat counterparts to persuade the majority of voters that the measures taken in this budget are unavoidable.

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