Politics Summary: Tuesday, June 22nd

The front pages are dominated by today’s Budget with speculation mounting that George Osborne will spend £3.7 billion cutting income tax. The Guardian writes that the Chancellor will announce a £200 tax cut for 20 million basic rate taxpayers in an attempt to show that the toughest budget in a generation is “tough but fair”. According to the paper, Vince Cable has been the chief architect of the scheme while his aides are apparently willing to see a VAT rise tomorrow to help pay for the reforms.

Raising the personal income tax allowance by £1,000 to £7,475 will lift 880,000 people out of income tax altogether, according to The Times. According to the Financial Times, “[Mr Osborne] will insist that the Budget is ‘progressive’ in intent, and will ensure that the poor and Britain’s economic future are not sacrificed in his attempt to balance the books.” A report for Left Foot Forward earlier this year showed that raising the tax threshold in this manner would do nothing for some 3 million households in the poorest quarter of the household income distribution. Any rise in VAT to pay for these tax cuts would hit this group disproportionately.

On its front page, The Independent asks “What has the public sector ever done for us?” before answering its own question: “apart from provide an education for seven million children every year, perform six million NHS operations, collect 28 million tonnes of household rubbish, keep our streets safe from crime …” The paper’s economic editor, Sean O’Grady writes: “According to the Chancellor, the public sector has put the nation on ‘the road to ruin’. The Prime Minister insists that it is “fair” that public workers on £18,000 should have their pay frozen when inflation is running at 5 per cent. The Deputy Prime Minister argues that public sector pensions are ‘unfair and unaffordable’.” He continues: “The Liberal Democrats have now apparently undergone a Damascene conversion to Tory fiscal principles.”

The Times reports that Nick Clegg “moved to pre-empt any revolt by Liberal Democrats last night by insisting that his party’s values were at the heart of Mr Osborne’s assault on the deficit.” In an e-mail to party members, Mr Clegg wrote “This is one of the hardest things we will ever have to do.” Metro reports that the deputy prime minister urged his party to stay united for the sake of the country, after shadow foreign secretary David Miliband labelled him a “dumb waiter” serving up Tory cuts. The FT reports a concerned Lib Dem minister: “The Tories seem to think that only the feckless and workless should pay.” City AM says Bob Russell, the Lib Dem MP for Colchester, has warned his “principles and conscience can’t be parked elsewhere … I supported the formation of the coalition through gritted teeth but I have never voted for big cuts in welfare benefits and I am not going to start now.”

The Daily Mail reports that, “Cameron backs EU treaty deal in move that could block another referendum”. The paper says, “In a statement to MPs, the Prime Minister said Britain will not stand in the way of eurozone governments if they want to pass control over their budgets to Brussels bureaucrats … That could allow the Government to push through yet another EU treaty without the need to offer a referendum to the British public – a move likely to spark a row with grassroots Tories.” Mr Cameron said, “We will back measures that help sort out the Eurozone. We will not back measures that pass power from the UK to Brussels.” Mats Persson, of the Open Europe think tank, said: “This is an opportunity for David Cameron to seek to repatriate some powers to Britain or reclaim some of our budget rebate.”

The New York Times reports the findings of a new poll showing “deep concern about energy and economy”. Overwhelmingly, reports the paper, Americans think their country needs a fundamental overhaul of its energy policies, and most expect alternative forms to replace oil as a major source within 25 years. Yet a majority are unwilling to pay higher gasoline prices to help develop new fuel sources. The proportion of people approving of the way President Obama has handled the BP oil spill is 43 per cent compared to 47 per cent disapproval. The numbers who approve of the way he is “handling his job as president” is the exact reverse 47:43. Nearly two-thirds believe the temporary shutdown of offshore drilling is a good idea.