British austerity budget

Written By: - Date published: 6:55 am, June 24th, 2010 - 27 comments
Categories: capitalism, class war, uk politics - Tags: , ,

The first budget from the new Tory-LibDem government is a shocker:

Budget 2010: Pain now, more pain later in austerity plan

• George Osborne delivers £40bn austerity budget
• 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.

27 comments on “British austerity budget”

  1. WOOF 1

    They are a pack of mongrels!

  2. WOOF 2

    What a pack of mongrels!

  3. Bored 3

    The major tenet I took from this budget was the terror the debt mountain is beginning to have around Europe. The attempt to place the burden of debt upon the taxpayer may yield interesting results however, as the increase in VAT appears to make sure it is done at the expense of consumption as opposed to income. It would seem contradictory to cut expenditure in the public sector by 25% (thats the plan), cut benefits and services, and to then expect the people affected to have money to consume and thereby generate tax revenue.

    Overall what we are looking at is the terror of a post industrial economy, long used to income from overseas investments as a replacement to local production seeing the income dry up, and not having any productive capacity left to pay the bills. The Con / Libs with the same tired market mantra dressed up as a socially and economically responsible budget are dancing on the grave of the post war social consensus. How this plays out will be very instructive to societies like ourselves who have exported their own productive capacity and propped up the social consensus on future debt.

  4. luva 4

    Need to change the title of this thoughtful post. It is not England, this is the British government and they have jurisdiction (at least in respect of revenue) over England, Northern Ireland, Scotland and Wales.

    Calling this an English budget is a bit like calling Rudd the PM of New South Wales or the by midday the former PM of NSW.

  5. Gosman 5

    You should be positively jumping for joy at this then. The imminent collapse of the free-market capitalist system will allow the implementation of the socialist utopia.

    I can’t wait for the British Labour Party to start advocating for the nationalisation of the means of production once again.

    • Bored 5.1

      They would if there was any means of production left! Bit like here, its all made in China.

    • Now that would really be something.,If this British budget has the effect we people of the Left believe well the ideas of State Ownership of the monopolies will once again be part of the thinking in Aotearoa . However we have to get rid of this lot in power at this time.

  6. Bunji 6

    It’s a huge budget with so so many changes, but there seems very little comment on the fact that they’ve lowered corporation & small company tax rates at the same time. For all their “we’re all in this together” talk, business gets a free ride. The Libs might have got their rise in the tax free allowance, but it seems a very Tory business friendly budget…
    Education budget cut by 25% – ouch. All civil service other than health takes 25% cut – unemployment at 3 million and a double-dip recession seems to be in the offing for the poor old UK.

  7. Nick C 7

    I think the reason this is nessesary is quite simple: The last Labour government decided to spend more than it earned, putting the country in debt.

    Part of that was the bailout i agree. Another part was the massive welfare spending.

    • RedLogix 7.1

      When will the right learn that robbing the poor box is not a substitute for economic policy?

    • lprent 7.2

      Most of it was from a premature ejaculation of tax cuts. Just about the worst type of fiscal stimulus there is.

  8. john 8

    http://www.socialistworker.co.uk/art.php?id=21633

    Above link gives the viewpoint of Workers on this budget which has marked similarities to the one recently given by the key regime

  9. comedy 9

    Is it true that they’re borrowing over 150 bn pounds this year and public sector net debt is to go up to around 75% of GDP ?

    Sounds like they are on the precipice of being truly fucked and must have been pissing money up against the wall for a long time during the boom times.

    • RedLogix 9.1

      Sounds like they are on the precipice of being truly fucked and must have been pissing money up against the wall for a long time during the boom times.

      Well yes. Here in NZ it’s private debt, at around NZ$190b, that totally dominates our Debt to GDP ratio…so yes we’ve been pissing money up against walls too, but possibly not in the way you have in mind.

  10. The Lib/Deb supporters must be devastated! Just as the Maori Party voters may be.
    Unfortunatly when what should be a Left-Wing party supports the Right the Right use their majority and just ride roughshod over them . the lesson for us in the British Budget is that this is what Tories do or hope to do.There is a lesson for both our LP party , the Maori Party and the Greens “the enemy are the Tories ‘, let us all remember that fact and co-operate together .

  11. Draco T Bastard 11

    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’.

    All of which was set up by RWNJ governments around the world – Thatcherism, Reaganism, and Rogernomics here. We paid for it in the 1990s as we went into recession with wages stagnating, prices rising and the selling off of state assets that had an income and we’re still paying for it. Our present RWNJ government wants us to pay even more so that they and their rich mates can get richer.

  12. Fred 12

    British public debt is now rising by £3 billion a week

    This should be a cause for some fairly major concern

    • Fred 12.1

      and I do agree about the sentiments about the bankers bonuses. Bankers are up there with politicians as lying cheating thieving shits in the UK.

      This is the default position now.,

  13. Jenny 13

    They say that every budget deserves a name that goes into the common lexicon.

    To start the debate, I would like to suggest:

    “The Zimbabwe Budget”,

    “The Mugabe Solution”,

    “The Insulate the Elite and Sack the Country Budget”,

    “The Next National Party Budget”

  14. millsy 14

    Personally I would rather a country be in debt that throw its most vulnerable people out on the street or let them die on emergency room due to underfunding of health.

    Its a matter of choices.

    The story about the New Zealand lady who lived in the bushes for 10 years in Hawaii really hit home for me. Why in hell would a country leave an eldeley woman live in the bush homeless for 10 years. But I suppose for many that is the price of ‘prosperity;.

    As for Cameron’s cuts, there is nothing that wouldnt have been done by Labour under Blair, but still, the British people are going to have to put up with crumbling roads, homlessness, run down infrastructure and people not being able to get health care for a long while let

    • equality watcher 14.1

      I vaguely remember in the 90s an old lady living in some park in New Zealand who was murdered.

  15. john 15

    The other Major factor in the UK’s economic woes is the decline in oil from the North Sea, they now import oil once again. It was North Sea Oil which boosted their economy for 25 years, where for awhile Brits seemed the rich people of Europe going over to France, Spain, Italy and doing up old properties and commuting between both Countries. Thatcher deindustrialised the UK, it was the oil bonanza which kept the whole show working ,now it’s going going gone the rich will have to use their positions to hold onto what they have got meaning regressive taxation such as VAT.
    http://www.socialistworker.co.uk/art.php?id=21633
    Most Brits I have met prefer here, a much simpler lifestyle without the rat race they have over there.

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  • The return to guerrilla war in Colombia
    by Gearóid Ó Loingsigh On August 29th a video in which veteran FARC (Revolutionary Armed Forces of Colombia) commander Iván Márquez announced that they had taken up arms again was released. There was no delay in the reaction to it, from longtime Liberal Party figure and former president Uribe, for ...
    RedlineBy Admin
    1 week ago
  • Air New Zealand identifies this enormous plot of unused land as possible second airport site
    Air New Zealand couldn’t believe its luck that this seemingly ideal piece of real estate had so far gone entirely unnoticed. Air New Zealand’s search for a site to build a second Auckland Airport may have made a breakthrough this afternoon, after employees scanning Google satellite imagery spotted a huge, ...
    The CivilianBy admin
    2 weeks ago
  • Redline on the Labour Party
    No-one on the anti-capitalist left in this country today puts forward a case that Labour is on the side of the working class.  There are certainly people who call themselves ‘socialist’ who do, but they are essentially liberals with vested interests in Labourism – often for career reasons. Nevertheless, there ...
    RedlineBy Admin
    2 weeks ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s failure
    When National was in government and fucking over the poor for the benefit of the rich, foodbanks were a growth industry. And now Labour is in charge, nothing has changed: A huge demand for emergency food parcels means the Auckland City Mission is struggling to prepare for the impending arrival ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Ardern attempts to vaccinate Clarke Gayford live on television to prove that it’s safe
    Gayford, pictured here on The Project, before things got wildly out of control. A bold public relations move by the Government to encourage parents to vaccinate their children has gone horribly wrong. Prime Minister Jacinda Ardern appeared on tonight’s episode of Three’s The Project, where the plan was for her ...
    The CivilianBy admin
    2 weeks ago
  • Has Mr. Whippy gone too far by parking on our front lawns?
    Mr. Whippy’s business model has driven it down a dark road of intimidation. Residents in major centres around the country are becoming disgruntled by the increasingly aggressive actions of purported ice cream company Mr. Whippy, who have taken to parking on people’s front lawns and doorsteps in a desperate attempt ...
    The CivilianBy admin
    2 weeks ago
  • Cleaning up the water
    Today the government released its Action Plan for Healthy Waterways, aimed at cleaning up our lakes and rivers. Its actually quite good. There will be protection for wetlands, better standards for swimming spots, a requirement for continuous improvement, and better standards for wastewater and stormwater. But most importantly, there's a ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Fronting up
    Today I appeared before the Environment Committee to give an oral submission on the Zero Carbon Bill. Over 1,500 people have asked to appear in person, so they've divided into subcommittees and are off touring the country, giving people a five minute slot each. The other submitters were a mixed ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Politics of science – making a silk purse out of a sow’s ear
    Anti-fluoride activists have some wealthy backers – they are erecting billboards misrepresenting the Canadian study on many New Zealand cities – and local authorities are ordering their removal because of their scaremongering. Many New Zealanders ...
    2 weeks ago
  • Democracy – I Don’t Think So
    So, those who “know best” have again done their worst. While constantly claiming to be the guardians of democracy and the constitution, and respecters of the 2016 referendum result, diehard Remainers (who have never brought themselves to believe that their advice could have been rejected) have striven might and main ...
    Bryan GouldBy Bryan Gould
    2 weeks ago
  • Government says it will now build just one really nice home
    Following publication of this article, the Ministry has requested it to be noted that this supplied image is not necessarily representative of what the final house will look like, and it “probably won’t be that nice.” As part of today’s long-anticipated reset of the Government’s flagship KiwiBuild policy, Housing Minister ...
    The CivilianBy admin
    2 weeks ago
  • Imperialism and your cup of coffee
    Over the next week or two we will be running three synopses of parts of the opening chapter of John Smith’s Imperialism in the 21st Century (New York, Monthly Review Press, 2016).  The synopsis and commentary below is written by Phil Duncan. Marx began Capital not with a sweeping historical ...
    RedlineBy Admin
    2 weeks ago
  • Still juking the stats
    The State Services Commission and Ombudsman have released another batch of OIA statistics, covering the last six months. Request volumes are up, and the core public service is generally handling them within the legal timeframe, though this may be because they've learned to extend rather than just ignore things. And ...
    No Right TurnBy Idiot/Savant
    2 weeks ago

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