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What’s in the box, Gideon? Hand-outs for the rich and a phoney recovery

Osborne Liar LiarOsborne didn’t mention the most important fact about the budget. While the OBR’s growth forecast for this year has been raised to nearly 2.7% (though their previous four have each been grossly over-optimistic), they recognise that this ‘recovery’, such as it is, will fade after 2015. In other words, this is not a real recovery, but a temporary upturn prompted by such unsustainable factors as heavy consumer borrowing (yet again the boom before the bust), the ‘help to buy’ scheme aimed at buying houses up to £600,000 in value, and loads of corporate welfare.

The budget is littered with bribes for businesses to invest. For example by the doubling of capital allowances which, if Osborne’s claims of future economic growth were credible to businessmen, would be unnecessary. It’s as if the 25 per cent reduction in corporation tax from 28% to 21% this year were not enough to satisfy corporate dependence on the State, in addition to this government’s State-sponsored massive tax avoidance schemes via offshore finance companies and the big cuts in corporation tax if just a minor part of the companies’ activities were patented.

However, turn to individual welfare and a very different picture emerges. Chief executives of FTSE-100 companies on £5m a year are being given a tax break by Osborne of £664 per day, worth £200,000 a year. But no money was found for nurses beyond their 1 per cent pay rise and now in their forth year of real terms pay cuts. Osborne’s newly announced overall cap on the social security budget will mean that thousands of working families partly dependent on tax credits will be hit hard.

Money was found today with great acclaim for mending potholes in Northampton, but nothing to relieve the pressure on hard-working families whose living standards have now shrunk by £1,600 on average since 2010, with a decline in 44 out of the 45 months since the election and 24 tax rises to cope with, including VAT, child benefit, and the granny tax. Osborne made great a to-do about people in future being able to increase their purchase of ISAs to £15,000 a year, but after this huge pay and benefits squeeze only the rich will be able to afford that.

Nor have the real essentials for recovery and growth been put in place. Business investment – a key index – still remains 20% below pre-crash levels, and also manufacturing is still 1.3% below 2008 levels, construction still 2.4% below, and infrastructure still 11% down. To say that is disappointing after 6 years of austerity is the understatement of the year. It is actually the proof of a disastrously mistaken economic policy which covers for a huge redistribution from public to private sector and from poor to rich.

2 Comments

  1. Robert says:

    Yep the Tories are the Tories about time we had them doing what they do best, the problem is of course where are labour going and whom, are they going to back, i suspect it will be chasing the well off rich and upper middle class, after all most of labour front bench fit into that category.

    This is what happens when you have three political parties basically going along chasing the same group of voters, the ones in power can do more then the opposition.

    Now what for labour.

  2. Sara says:

    What happens every time one of these welfare cuts is introduced? Someone from the labour front bench stands up and says “Oh we’ll vote for that!’ or “Well we will do this and more when we get in!”.

    I am disabled and so is my husband. I have pretty much resolved not to vote next election, as it seems whoever wins, we will still be enduring the same hell. Where is the opposition to these policies? When will someone realise that it is not just numbers on a spreadsheet, and that these decisions are ruining lives, and that too many have been lost already! If labour are not going to oppose anything the condems do to the ‘undeserving’ then I shall not waste my time in voting for them.

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