In the March Budget, Labour set out plans to cut public spending by £38 billion. The OBR's report today provides no justification to go any further next week.
The Office of Budget Responsibility predict that growth will come in lower than forecast in the March Budget but that borrowing will also be lower. With the coalition government intent on cutting a range of taxes, we should be in no doubt about the justification for spending cuts above and beyond the £38 billion mooted in Alistair Darling’s final Budget. They are driven by ideology not necessity.
According to the OBR report presented today by Sir Alan Budd, compared to the March Budget, total managed expenditure is £2.8 billion lower while receipts are up £5.6 billion for 2010-11. This has contributed to the estimate of the current budget deficit falling from £124 billion at the Budget to £114 billion.
Meanwhile, reporting from the OBR’s press conference, Newsnight’s Paul Mason writes:
There is only a 0.3% of GDP difference (maybe 5bn) between Darling’s structural deficit forecast and Budd’s. This means there is no prima-facie ammo in the Budd Report for a significant tightening in order to eliminate “the bulk of the structural deficit”.
As Left Foot Forward showed last week, the coalition government plans – over the course of this Parliament – to cut income tax, employer national insurance, corporation tax, freeze council tax, and “recognise marriage in the tax system”. These are all discretionary decisions which will need to be paid for by additional tax increases or spending cuts above and beyond the £38 billion of spending cuts that Labour set out would be needed in its final Budget (Paragraph 2.57).
With the Government preparing a “climb down” on raising capital gains tax, there are growing suspicions that they will pay for their tax giveaways by raising VAT, which is urged by business, or cutting additional public services.
34 Responses to “No case to cut more than Labour”
JPP
RT @drjonathanPhD: RT @leftfootfwd No case to cut more than #Labour http://bit.ly/bsAlfE #ukpolitics #libdems
Fat Bloke on Tour
The OBR report shows that AD was right on the money.
At worst 2 months early regarding growth moving up a gear but then he was talking 3 months ago before AM and all the continental dog boilers took Greece and the Euro to the brink with all their kitchen table conservative economics and narrow national self interest.
Fair wind of low’ish pound, import substitution and export growth and the GB/AD plan would have worked. Add in a bit of backbone for a comprehensive re-alignment of tax / CGT / Corp tax and some good old fashioned HMRC activism and things would be moving forward in a progressive manner.
Now what have we got, the lunatics have taken over the asylum and their cheerleaders in the media are making sure that their agenda has prominence no matter how barking their ideas are. With Sniffy and the ghost of the poisoned dwarf firing up the chain saw for some slash and burn then unfortunately all bets are off.
The poor and the unemployed, well if you get hungry then you will be forced to consume the family pet for sustenance. The right wing, upper middle class establishment have no intention in putting up their own tax bills to help those more unfortunate – we are all in this together – aye right as they say in G1.
As has been noted by some of the more inquiring media, what is Plan B if it all goes badly wrong, the spectre of 1937 hangs heavily over the recent pronouncements of the EU / G20. The daily spectre of immediate collapse is now of the agenda so now all the political pygmies are reverting to type – self interest, national stereotypes and beggar thy neighbour policies are now the order of the day. I fear GB will be missed on the global stage very soon.
They are using the credit crunch to generate a panic to dismantle the TB/GB welfare state. Dave the Rave first had thoughts to use the environment as his weapon of choice. You know he would love to help the poor and the needy but the cost to the environment would be too much for the planet to support. Better to look to non monetary measures to calibrate “progress”, out goes the concept of relative poverty and in would have come the concept of the happiness factor. Cuddly conservatism to take the focus away from GDP growth and redistribution, you bet. The only question would have been how many of media establishment would go along with all this mumbo jumbo.
Now the Credit Crunch is upon us, dog boiling is the new orthodoxy and a good old fashioned slash and burn of the welfare state is the only game in town. The cuts being put forward are not primarily focused on sorting out the deficit they are being put in place to prepare the ground for the low tax nature of the upturn when it comes. Thatch 2 — The Sequel is the order of the day much to the delight of the Orange bookers who are reverting to Liberal type, Tories without their kicking boots on, saying sorry as they reduce the life chances of the poor.
Politics Summary: Tuesday, June 15th | Left Foot Forward
[…] faster and deeper cuts than Labour’s pre-election proposed spending cut programme.” Yet Left Foot Forward yesterday reported there was “no case to cut more than Labour”, pointing out that: […]
Anon E Mouse
Mr.Sensible – Irrespective of what this office says why do you disagree with more open government?
Fat Bloke on Tour – Why don’t you want to dismantle TB/GB welfare state?
These old fashioned, control freak authoritarian views are really not welcome in any political party – especially after 13 years of Labour failure on inequality etc. Quite frankly if the pair of you can’t see how unattractive it is go and join the Socialist Party and start selling the Morning Star on street corners because your views will do the Labour Party no favours.
And Fat Bloke on Tour, I don’t know what a “dog boiler” is or who “sniffy” is but your “Thatch 2 – The Sequel” shows a complete lack of both financial and political knowledge about this country.
Apart from the fact more affordable homes and comprehensive schools were built under Thatcher, her lowest increase in public service spending was a yearly increase of 1.1% – never a reduction.
Not a single penny was cut under Thatcher. Why don’t you know that ya numpty?
Daily Cuts Briefing – Tuesday 15th June « A Thousand Cuts
[…] analysis of how the OBR report makes a nonsense of the government’s public spending cuts, while Left Foot Forward says that the OBR report provides no grounds for Osborne to make further cuts above those proposed […]