Wednesday, 23 June 2010

The Budget

I was going to write a long post about yesterday's budget and what it means for Cambridgeshire - but it was a bit too long - so I have split it into two.   The other post is here.

Overall, given everything we have seen and heard since the General Election, the budget was better than many could have thought.  It is interesting that the BBC are highlighting that families earning £40k a year or less are better off and families earning £50k are not - that is a bit of narrowing the gap that Harriet Harman of course will conveniently forget (especially given that the gap between rich and poor widened under New Labour).  However, it is quite clear that when the VAT increase comes into effect in January this will not be the case.  It is the one measure I would prefer not to have seen in the budget, but those like me that recognise the dire financial situation that was inherited from the Labour Government know that it was unavoidable.

But I am pleased that alcohol and fuel taxes were not increased.

Harriet Harman called the budget one "that will throw people out of work, hold back economic growth and damage the public services we all rely on."

It is a really strange quote - she made the point that the Office of Budget Responsibility predictions for unemployment as the basis for part of this, but as the Spectator points out - there is much about her claims in that respect that are open to question.  As for holding back economic growth - can someone please tell me how lowering corporation taxes will have a negative impact on growth?  Those tax cuts are important, that is money that will allow businesses to invest and grow.  It is important that sort of incentive is used; we are going to see a shrink in the public sector - and quite rightly so, but as that starts to effect jobs, it is important that we have an economy that is creating jobs to mitigate the problem; moving new employment opportunities away from the wealth eating public sector and transferring them across to the wealth creating private sector.

I have to say that during the election campaign Labour proved it was in denial about the mess it has created.  You would have thought losing would have woke them up a bit, but they seem to have taken a step further away from reality instead of making the much needed leap towards it.  The Labour Party are encouraging supporters to use a form email to write in to local papers encouraging them to oppose the budget (link deliberately not provided).  Every time you read those letters - just recognise they are written by people who choose, for whatever reason, to ignore these facts:

1.   The current Government inherited the worst peace time debt ever from Gordon Brown's failed administration

2.   The level of taxation of New Labour was about 40% of GDP, the level of spending was at 50% - they were borrowing 25% more than they were spending.

Now some of this can be blamed on the banking bail-out - but not all of it by a long, long way.  Without making changes and making them quickly we were heading to disaster.  I hope our normally conscientious local newspapers decide not to publish any letters where the words are written by the Labour Party.  I am all for people making their own views known about the budget - but these letters will not contain individual views but the centralised opinions of a party that were just voted out of Government.

No comments:

Post a Comment