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Reaction to George Osborne’s Budget focused on the scale of the cuts with the Chancellor announcing £40 billion in additional spending cuts and net tax rises. The Guardian heralds “Pain now, more pain later” as Mr Osborne “imposed austerity measures on every family in Britain” and “signalled a second dose of gloom in October”. In the the same paper, Larry Elliot writes that the “new champion” of austerity has made a gamble on “the ability of the enfeebled and unbalanced UK economy to withstand these draconian measures without slipping back into recession.” The Independent asks, “Tough? Yes… But Fair?” with a leader calling it “George Osborne’s economic gamble”.
The Financial Times continues the theme: “Osborne’s kill or cure Budget” with the Coalition “[staking] Britain’s economic future on being able to sustain a successful recovery while savagely cutting public spending, shedding tens of thousands of jobs, and raising consumption taxes.” The loyal Daily Telegraph dubs George Osborne “The Enforcer” with “an ambitious attempt to reduce the nation’s borrowing” while The Times calls it “Osborne’s axe-and-tax pact to balance the books.”
The Budget was billed as “tough but fair” and “progressive” but a number of commentators challenge the assertion. In the FT, Chris Giles writes, “The ‘fairness’ argument was not well-served by charts in a Treasury publication, cited by the chancellor’s advisers on Tuesday, which excluded the effect of the largest spending cuts.” Writing in the same paper, Philip Stephens says, “The pain will not, pace the insistence of Mr Clegg and a wholly misleading table in the Treasury’s Red Book, be “progressive”. Those on the lowest incomes will gain least from the income tax cut and will suffer most from the spending squeeze.” In the Guardian, Polly Toynbee calls it “a budget of ideological choice and not of necessity … a Tory budget, a very Tory budget, with only a little Lib Dem icing.” She goes on, “If these were the promised ‘progressive cuts’, then the word vanished into the realm of doublethink.” In the Independent, Steve Richards writes, “It is not progressive to plan for spending cuts on a scale that takes the breath away.” In the Wall Street Journal, Iain Martin lifts the lid on the Chancellor’s intentions and writes: “Mr. Osborne clearly wants to destroy the foundations of the Brownite settlement, alter public perceptions of how growth is encouraged and limit the reach of the state. He is seeking to arrange a once in a generation change in the terms of trade.” Left Foot Forward showed yesterday that the tax changes – when taken together – were regressive.
The Mirror reveals that, “Nick Clegg faces revolt over VAT increase” with ex-Lib Dem leader Charles Kennedy tipped to lead the rebellion that could threaten the coalition’s future. Another MP, Bob Russell, has warned he could not back the Budget and will consult constituents about joining Labour in trying to vote it out. The Guardian reports that, “A senior Liberal Democrat [Richard Grayson, vice-chair of the Lib Dems’ federal policy committee, in an article for Comment is Free] raised doubts about the coalition budget ,saying that policy concessions his party appeared to have won were “fig leaves”, describing his own party as being “led” by the centre-right.” But in the Guardian, Vince Cable – who took Chief Secretary Danny Alexander’s spot on two key post-Budget interviews yesterday – writes that the Budget will be “resented by some but understood, I think, by most”. He says he was persuaded of the need for early cuts “by the growing sovereign debt crisis”. He says, “The Liberal Democrats would not have signed up to government had we thought fiscal austerity would be pursued dogmatically whatever happened to the economy”. As Left Foot Forward showed yesterday, the Lib Dems’ u-turn will see them presiding over an extra £47bn of cuts beyond the plans they supported during the general election.
The FT focuses on the bank levy which followed George Osborne’s admission that “this was a crisis that started in the banking sector“. The paper reports that the balance-sheet tax, to be paid from next January by UK banks and building societies as well as the UK operations of foreign banks, is likely to be the first such levy globally to be implemented. In a co-ordinated statement, France and Germany (which is set to introduce its own tax from January 2012) said the “specific design” of each levy might vary given different legal and tax strictures, but that each would “take into consideration the need for a level playing field”. The British Bankers’ Association said banks were “committed to working with the government to ensure new bank levies balance tax-raising objectives with the need to keep the recovery moving” – a muted response that reflected the City’s broader relief that the levy had not been pitched at a more punitive rate.
The New York Times reports that, “President Obama will confront the fate of his top commander in Afghanistan [General McChrystal] after a firestorm over remarks the general and members of his staff made that were contemptuous of senior administration officials.” In an article in Rolling Stone magazine, General McChrystal and his aides spoke critically of nearly every member of the president’s national security team, saying President Obama appeared “uncomfortable and intimidated” during his first meeting with the general, and dismissing Vice President Joseph R. Biden Jr. as “Bite Me.”
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7 Responses to “Politics Summary: Wednesday, June 23rd”
Andy Sutherland
RT @leftfootfwd: Politics Summary: Commentators challenge "progressive Budget" assertion http://bit.ly/dfAGGk
Duncan Wiles
RT @leftfootfwd: Politics Summary: Wednesday, June 23rd http://bit.ly/dfAGGk
Trakgalvis
Politics Summary: Commentators challenge "progressive Budget" assertion http://bit.ly/dfAGGk via @leftfootfwd
Kurt
Politics Summary: Wednesday, June 23rd | Left Foot Forward http://bit.ly/96M2eC
Mr. Sensible
I see that in the Mirror they’re reporting that Cameron had a bit of a go at his staff after the BP situation:
http://www.mirror.co.uk/news/top-stories/2010/06/22/cam-rant-at-claims-he-bottled-obama-row-115875-22350462/
Turning back to the budget, in amongst all the understandable andger over VAT and the other proposals I think there are a couple of things we’ve forgotten.
First, there are a couple of good things in there; the proposals on Capital Gains Tax, and the pledges to upgrade the Tine and Wear Metro and Birmingham New Street Station.
But, other measures that are in my view bad news are the proposed sell-off of NATS, the Student Lone Book, the Royal Mail and High Speed 1. The Tote is the only one of those that I think the government doesn’t need, but the rest were wrong when proposed under Labour, and are wrong now.
This budget is bad for jobs, growth, cutting the deficit and for our public services.