The first budget from the new Tory-LibDem government is a shocker:
Budget 2010: Pain now, more pain later in austerity plan
â€¢ George Osborne delivers £40bn austerity budget
â€¢ Controversial rise in VAT to 20% from January
George Osborne has imposed austerity measures on every family in Britain after announcing a £40bn package of emergency tax increases, welfare cuts and Whitehall spending restraint designed to slash the budget deficit by the end of the parliament.
The chancellor said the “unavoidable budget” required a VAT rise from 17.5% to 20% next January, higher capital gains tax, a levy on banks, a two-year public sector pay freeze and less generous benefits, but insisted the package was needed to prevent the financial markets from turning on Britain.
In his debut budget speech, Osborne pleased the ratings agencies and the Organisation for Economic Co-operation and Development by intensifying the £73bn squeeze already planned by the last Labour government. But he signalled a second dose of gloom in October, when a three-year comprehensive spending review will spell out the size of the cuts for individual government departments.
Osborne warned today that ring-fencing the NHS and international development meant non-protected departments would face average real cuts of 25% but that some clemency would be shown to education and defence. …
Seeking to pin the blame for the tough measures on Gordon Brown, the chancellor said: “Today we have paid the debts of a failed past. And laid the foundations for a more prosperous future. The richest paying the most and the vulnerable protected. That is our approach. Prosperity for all. That is our goal.” …
But figures produced by the Treasury purporting to show the richest will suffer most extend only to 2012-3, by which time most of the welfare cuts will not have been implemented. …
Right wing commentators everywhere will be dribbling into their keyboards about “years of incompetent Labour rule” – politics as usual. What this is really about is three things, England’s over reliance on the financial services “industry”, the failure of unregulated capitalism, and the one stupid decision that financial institutions were “too big to fail”. England committed £850 billion to bail out big banks (while around 5000 executives paid themselves bonuses up to £15 million each). Much of the bill was always going to end up shafting the ordinary people. And here’s the first instalment.