UK Budget 2010

Chris Giles

The abuse of the word “progressive” continues. In his Budget speech yesterday, George Osborne said:

“Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionally less than the people at the top. It is a progressive Budget.” 

Live blog on UK Budget now running at Westminster blog.

All coverage available via Budget in-depth.

Chris Giles

Forget the waffle about cutting £12bn of waste out of government from the  Conservatives and £11bn of efficiencies from Labour. We now have a firm policy from the Tories: to cut £6bn (or 2.8 per cent) from government departments’ 2010-11 budgets. The savings will be used to fund reductions in national insurance contributions for employees and employers. What can we say about this policy:

  • Deep, clear and immediate budget cuts. The £12bn headline reduction in “waste” is, in reality, a simple cut of £6bn in departmental expenditure limits for 2010-11

 

Alistair Darling said today the Ministries would provide details on £11bn savings by 2012/13. Below is a breakdown by Ministry. But you can save yourself the detail: almost all of the departments list the same cost reduction plans (with worrying similarity). Almost all of the savings are expected to come from:

  1. Reducing the cost of procurement, often via ‘collaborative procurement’
  2. Reducing the cost of arms’ length bodies
  3. Streamlining back-office functions
  4. Reducing the use of consultants
  5. Property/estates costs
  6. Energy savings

In savings-size order:

 

Click on the chart to see some full size, interactive charts. This is Chris’s data, collected from pre-Budget Reports and Budgets over the past few years.

Chris Giles

Alistair Darling will allocate £100m to fill in potholes. That small sum got into his speech. But what new did we learn about filling in the £167,000m black hole in public finances? Nothing.

Yesterday, I wrote a courage checklist for Mr Darling to see whether he had the balls and integrity to tell the British public the implications of his own deficit reduction plan. The scorecard is as follows: 

Mr Clegg on Budget:

  1. “Phoney war” between Conservatives and Labour about the timing of cuts, to mask the agreement on making significant cuts.
  2. Conservatives have barely a “fig leaf” of details. They said they wanted £40bn cuts by end of next parliament, but spelt out how to achieve just £2bn.
  3. Chancellor should not duck blame for recession:

 

Mr Cameron’s says Budget is “pitiful”.

Claims stamp duty cut has been Conservative policy for three years. Cider plans likewise claimed as Tory policy. Labour officials have historically opposed the policies they now embrace.

  1. Conservatives will set up an independent budget board
  2. Freeze council tax
  3. Lower small business tax

On specific policies:

  1. Budget shows slew of new taxes, tax bombshells timed to go off after election
  2. Growth forecasts too optimistic -

 

Chris Giles will be posting later. Meanwhile, you can watch the budget. Or read Alistair Darling’s speech.

New/amended policies:

  1. Winter fuel payment will be guaranteed for another year -  £250 or £400 to be received by pensioners, paid for by closing tax loopholes
  2. No-one over 75 will pay tax on the first £10k of income, from next year
  3. Extra £4 per week for all children whatever the marital status of their parents
  4. Tax evasion: £0.5bn extra revenue expected

 

Chris Giles

Alistair Darling says the Budget is all about choice – choose Labour and get measures that get growth going; choose anyone else and suffer the consequences.

And what about explaining how to lower borrowing?