When the government has cut £4000 from every home in Islington and is hitting the country with £32 billion in new taxes, it doesn’t really matter how many tricks George Osborne had up his sleeve on Budget day.
In the end, the show was all smoke and mirrors as the Tory – Lib Dem government gave with one hand and took with the other.
Take tax – Osborne claimed that more of the poorest would no longer have to pay. But this was a short-term bribe, and will be followed by a long-term tax rise. Because the government will now measure inflation based on CPI rather than RPI, after this quick increase personal allowances will go up very slowly and Islington families will end up paying more tax in the long term.
Take fuel – the idea that drivers should be grateful for a 1p cut in fuel duty when George Osborne’s VAT rise is adding 3p to the price of petrol is absurd. Osborne claims that he will make this money back from the oil companies, but there is nothing to stop them passing on the tax rise at the pumps. When people fill up their cars this weekend, they should remember that 3p of every litre is because of the Tory -; Lib Dem VAT rise.
This year families in Islington will see their child benefit frozen and pay £450 more in VAT. Next year, families earning as little as £26,000 are set to lose their tax credits too. And in the background, Islington Council is being forced to make £40 million of cuts this year -; that’s 12% of our council’s general fund budget and the highest grant cut in London.
Basically, the Governor of the Bank of England, Mervyn King, has said we face the biggest squeeze in living standards since the 1920s – while the Chancellor has given the banks a tax cut.
It is all too clear that we are not all in this together. The Tory – Lib Dem plan is hurting, but it’s not working.
There have got to be some tough choices to get the deficit down, but this government is going too far and too fast. If the government is throwing hundreds of thousands of people out of work and the economy isn’t growing strongly, we can’t reduce the deficit.
The Tory – Lib Dem government has recklessly decided to attempt to pay off the deficit in five years, instead of the more reasonable halving that Labour proposed. They are cutting further and faster than any other major economy in the world.
As a result, the number of people out of work is now at a 17 year high, and the independent budget watchdog says inflation will be higher this year and next year – squeezing living standards further. Is this a budget for growth? Well, if it is why do the government’s own analysts say economic growth is down last year, this year and next year?
In Islington we won’t be fooled. The Tories and Lib Dems are squeezing the poorest with their reckless gamble and risking the economic recovery. A budget for growth? George Osborne’s having a laugh.