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UK Budget: Some Responses June 23, 2010

Unfortunately I don’t have time to do a proper resonse to the extremely reactionary budget announced yesterday by the Tory/Lib Dem coalition, but here a couple of responses stolen quoted from the ICTU and The WP. Increating VAT, cutting access to public benefits, reducing benefits and pensions. Truly, the Tories and their allies have delivered on their campaign promises to be the voice of progressives. And deflationary policies have arrived. Oh joy. As usual, please add more responses in the comments.

From the ICTU

BUDGET 2010: WOMEN AND CHILDREN HIT FIRST

The Irish Congress of Trade Unions calls on all 18 MPs from Northern Ireland to vote against this budget which will drag the local economy even further from any meaningful recovery.

Speaking after the Chancellor George Osborne made his Budget speech in the House of Commons, Avril Hall-Callaghan, Chair of the Northern Ireland Committee of the ICTU, said:

“This budget is regressive and short sighted and will disproportionately affect women both as workers and as mothers, through welfare cuts and pay freezes in the public sector, whose workforce is mostly female.

“The private sector and the organisations which claim to speak in their interests have little to cheer about, either. While a handful of large businesses will profit from gradual cuts in Corporation Tax, retailers and service providers will be hit by a double whammy of the increase in VAT to 20% and the decrease in consumer spending by public sector workers. Given the importance to Northern Ireland of the public sector, this will mean more shuttered shops on our streets.

“The opportunity to stimulate the economy, especially in the regions and nations of the UK, is being squandered at the behest of the bond markets and the ideology of this Tory-led coalition. The promised firm action on the banks and on Capital Gains Tax is a limp slap across the wrist, compared to the threat of 25% cuts across most departmental budgets during this Parliament.

“We await with trepidation to see what the funding consequences are for the Northern Ireland budget. The 18 MPs we have elected now have a duty to protect the people of Northern Ireland from the regressive intentions of this “progressive alliance working in the national interest”, as George Osborne claimed today. We see little progressive in this budget and less in the interest of Northern Ireland.”
ENDS

From The WP

The Workers’ Party spokesperson Paddy Lynn has reacted with outrage to the provisions of the emergency Budget outlined by multimillionaire George Osborne.

“This has to count among the worst single attack on the working class since the days of Margaret Thatcher. The ConDem coalition has added an extra £40bn of tax increases and spending cuts to the £73bn put in place by Alistair Darling in the dying days of the Labour government”, said Mr Lynn, “and although the ConDems pretend it’s a ‘fair and balanced budget’, it is in fact a massive onslaught on the already poor and disadvantaged”, Mr Lynn continued. “The scale of the public sector cuts ahead is scarcely believable. If the Coalition gets its way in the next four years we will see public sector spending fall by 25 per cent in real terms, with the exceptions of the NHS and the international aid budget. And don’t be fooled by the so-called ‘ring-fencing’ of the NHS because the ConDems are planning £2.6bn in NHS cuts by 2010-11. Make no mistake about it: this government is opening the door to the privatisation of the NHS through outsourcing and the strengthening of bureaucratic internal market mechanisms which already exist. Honest Liberal Democrats –there must be a few- should hang their heads in shame.”

Mr Lynn also noted the Budget’s attack on welfare recipients and the unemployed. “The Tories plan to take £5.84bn a year by 2014-15 from people on benefits through lower annual rises. They will do this through the shift to the consumer prices index (CPI) from the retail price index (RPI) to decide how much benefits rise. Cuts to the housing allowance will force people to move into worse accommodation or private landlords to lower their rates. While those on benefits get ready for worse to come, private landlords all over the country are preparing for the good times”, Mr Lynn continued. “On top of this, workers will bear the brunt of the proposed increase in the rate of the highly regressive Value Added Tax to 20%.”

Mr Lynn then went on to discuss the likely economic outcome of the emergency budget. “While this budget represents a not so stealthy attack on the poor and the welfare state, the ConDems have also justified it as the only course that could be taken to save the economy. In their view cutbacks and tax increases (fiscal tightening) will create profit making opportunities in the private sector, which will put the UK economy back on course As Martin Wolff puts it in the Financial Times, “In current circumstances, the belief that a concerted fiscal tightening across the developed world would prove expansionary is, to put it mildly, optimistic.” The UK economy is going to be depressed because working people will have less to spend. The rich and super-rich will have more to spend it all but they tend not to spend most of their colossal wealth in the real economy. In other words, taking money from the working class and giving it to the rich is in itself a deflationary move. On top of this all major export markets are introducing similar austerity measures. The UK economy cannot hope to substantially improve through exports when no-one is in a position to buy UK goods and services. The Con DemBudget is a recipe for economic depression and social disaster. There is no hope of a private sector led recovery in our economy. What is needed is a massive programme of public works which will expand jobs, expand the amount of money in workers’ pockets and so expand the economy”, Mr Lynn concluded.