For 10 days, Left Foot Forward's contributors have been setting out there Budget demands. Join our liveblog today from 12.20 to see if their ideas were adopted.
Today Chancellor Alistair Darling delivers his third Budget and the last before the general election. Join our liveblog today from 12.20 as we analyse whether a series of critical progressive goals have been addressed.
Over the last 10 days, Left Foot Forward has published a range of articles setting out what our contributors think should be in the Budget. The economy stands on a knife edge and so while bringing down the deficit is the key medium-term priority requiring greater clarity than that provided by any party at present, it should not be carried out so rapidly that it imperils the recovery. Indeed, while the deficit should be kept below the £178 billion projected in the pre-Budget report, there is a strong case for targeting new spending on key areas.
First, Mr Darling needs to put the economy on the path to sustainable growth by investing in Britain’s infrastructure needs such as a “green new deal” and housing investment, points echoed by Richard Murphy at Tax Research UK and Varun Chandra at Progress. Second, we need to ensure that support is targeted at the “squeezed middle” and those worst affected by the recession through an extension to the Job Guarantee among other measures.
Those who say we can’t afford it are wrong. Savings can be made by cutting carbon intensive expenditure and non-essential defence procurement projects, and there will be further savings from the better-than-expected unemployment figures and from higher-than-anticipated revenues from the bankers’ bonus tax. Securing a progressive future means making tough decisions. We hope Mr Darling shares our priorities.
In summary, our contributors and guest writers made the following critical points:
• Tony Dolphin, our regular economic columnist, set out that it was likely to be a “sensible” Budget with little room for fiscal manouvre. But he outlined that because of lower unemployment costs and higher revenues from the bank bonus tax, there might be a small amount of money available: “[Darling] could simply bank this money and cut his deficit forecasts accordingly … [or] if he chose to do so, moderating the sharp drop in capital spending planned for the next fiscal year would be the best way to proceed.”
• Chris Hewitt of the Green Alliance suggested a number of ways to cut carbon and free up resources including scrapping £10 billion worth of road expansion projects, and removing the zero-rated VAT for the aircraft and shipping industries.
• Our regular defence correspondent, Marcus Roberts, suggested “suspending spending, or slowing contract negotiations, on all major areas for defence procurement spending that should be subject to the Strategic Defence Review.” This includes the “Super Carrier” project, the Joint Strike Fighter, the Future Rapid Effects System, and Trident.
• Tim Page of the TUC set out why Britain needs a new strategic investment fund, “borrowing from the French model, where an independent public sector body takes long-term minority stakes in strategic companies, with a view to supporting their development into world class players”.
• Joss Garman, our regular environment writer, called for a “Green new deal“ including the creation of a green investment bank, a low carbon fund, and a ‘pay as you save’ scheme to support low energy home upgrades.
• Jon Cruddas MP called for investment in housing to continue including trusting “councils to continue and step up their programmes to build new homes”.
• Matthew Whittaker of the Resolution Foundation suggested helping the “squeezed middle” by extending the Job Guarantee to all who have been unemployed for 12 months or longer; reforming welfare-to-work programmes; and widening eligibility of Working Tax Credit so that training as well as paid work counts.
• Kate Bell, who writes regularly on poverty, suggests that the Budget should protect those hit hardest by the recession including increasing the childcare element of the Working Tax Credit so that it meets 100 per cent of childcare costs, rather than the current 80 per cent, and measures to help parents with the costs of school uniforms.
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