Wednesday, March 24, 2010

Budget responses

Personally I thought Darling's budget was unsurprising. Some things went up, shock. Budget consistent with the "Don't cut now, cut later" ethos that is Labour's election pose which simultaneously allows them to paint their pending cuts as a good thing because they are simply further away than the cuts of the other parties.

BBC Economics Editor Stephanie Flanders summed up Mr Darling's message as "it's bad, but not as bad as we thought - and not nearly as bad as it would have been under the Conservatives".

The Tory response was equally predictable. They said that Labour nicks ideas off them, which it does. Cameron also said "We need a credible plan to cut the deficit. We need an unleashing of enterprise across the nation. We need a plan to boost employment through radical welfare and school reform." I'm fairly sure this makes no sense, how does laying off civil servants "unleash" enterprise?

Nick Clegg, who apparently leads a party called the "Liberal Democrats" responded in similarly uninspiring fashion. After trying to win a bet by cramming as many cliches as possible into a single paragraph Clegg berated the government's refusal to slash spending by saying that "Labour should stop trying to kid people about this recession. They got us into it. Only by being honest about how we got into this mess will we ever be able to get out."

There were better responses from Ann Pettifor, LEAP and the Greens, who displayed an altogether different kind of realism - one that understands that poverty is not a positive economic tool and that we should be bolstering the economy not undermining it.

Caroline Lucas, Green Party leader, said that "Unlike the other parties, we will argue that increases in taxation for the better-off are required. We will raise taxes fairly and explain them honestly. Labour's plans depend upon wishful thinking about how quickly the economy and tax revenues will recover. They are unwilling to tell you about the cuts and tax increases coming later.

"In contrast, the Green Party will be open about what we would cut, what we would defend, and about the fact that we need to raise taxation from 36% of GDP in 2009-10 to around 45% in 2013. This would halve the gap between government expenditure and revenues by 2013-14 (as the Labour government proposes) and progressively close the gap thereafter."

It's interesting that when the government proposes cuts they never consider waste like ID cards, or Trident they always cut backs in the public sector.

11 comments:

Alasdair said...

As much as I'm in favour of increased taxation to pay for services, do we really need to raise ~ £160 billion a year? And if so, what are our plans to do that? ID cards and Trident won't go nearly that far.

Jim Jepps said...

ID cards and trident wont fill that gap and we do have to be aware of the left tendency to spend that money over and again - but the response is saying we get that from raising taxes for the rich in order to "progressively close the gap".

Alasdair said...

And I'm all in favour of raising taxes on the rich, but 160 billion is a lot of money to find. Do we have a specific set of proposals to raise that much?

Jim Jepps said...

We're launching the fully costed manifesto when the election's called so the answer is... I assume so!

Matt Sellwood said...

NO mention of affordable housing in the Budget at all....

http://mattsellwoodforhackney.blogspot.com/2010/03/housing-and-budget.html

Matt

David Cox said...

Good grief Jim, did Caroline use the C word? "…the Green Party will be open about what we would CUT…” CUT– shock horror, does this mean the GP has joined the cuts conscientious?

But more seriously the tax on cider is an attack on rural communities and Devonian culture – the Grockels versus Janners dwyle flunking will have to be cancelled this year. The Conservatives announced plans to increase tax on "problem drinks" in 2008; with depressing regularity when the Tories dream up a stupid populist idea, it is only a matter of time before Labour copy it.
Savage cuts in Trident replacement and ID cards certainly, how about savage cuts in the new Aircraft Carriers programme (great for national prestige in peace-time, large floating target for enemies in war-time). The dockyards that would otherwise build the carriers could build wind turbines like that nice Mr Clegg suggested: Clegg said: "We need to make sure we come out of this recession with a rebalanced and green economy. New offshore turbines, with blades the size of the London Eye, need to be built and launched from modern docks, so we need to upgrade our shipyards to take advantage of this massive opportunity.”

Jim Jepps said...

She did. Just between you and me I thought that was a bit misjudged as, although we do believe in making cuts, I think it could have been misunderstood as cutting for the sake of the recession rather than because we're wasting money on stuff we don't need (like weapons of mass destruction).

I kept my tutting to myself though - as you noticed!

Clark said...

The fact that the government has not even considered cutting Trident is actually more serious than one would think. A recent report has shown that the declared £15-22bn on nuclear weapons will in fact amount to £97bn, accounting for hidden costs. Still think it is irrelevant?

Strgymozo said...

Cutting Trident won't fill the gap, but it will save an awful lot of money that could be used for much better purposes. Nuclear weapons are an outdated Cold War waste of money that can't protect us against the likely future threats from climate change and cyberwarfare.

See http://nuclearinfo.org/node/2053 for a review of other things we could do with the money.

Alasdair said...

To be clear, I certainly don't think cutting Trident is irrelevant. It will save a significant amount of money and I don't think we need a nuclear deterrent anyway - I'd scrap it even if it didn't waste money. But it's a one off saving and we need to be careful not to spend that saving more than once. It's really a capital saving and we need extra revenue. The same goes for ID cards, we can use that money to build something else, or to pay down our debt, which of course increases effective revenue through lower interest payments, but we can't, directly, increase benefits, or health spending, say.

Jim Jepps said...

Trident is an ongoing expense as well as a capital spend - but of course the list of schemes to scrap is rather long. We've just commissioned two new aircraft carriers costing billions, the war in Afghanistan is an ongoing drain, etc

I agree with your general point though A in that you can't save money on one specific thing and think that means you can permanently increase a specific budget line off the back of it