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”
Reaction to Office of Budget Responsibility… « My Political Ramblings
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Fat Bloke on Tour
Anon E … @ 10.03
Just where are all the right wing mentalists getting all their little political factoids?
If true I will add them to the following:
1) Which Education secretary shut the most grammar schools?
2) Which Energy secretary shut the most pits?
All very interesting in their own little way but strange things happen in politics, however to base your approach to the future suggests you deal in anecdotes not facts.
Increase in public service provision = 1.1%
Please define public service spending?
Does it include increasing debt interest, inflation or unemployment costs?
Individual departments and programmes were cut no matter the overall number
Anyway, how does that compare with health inflation, teacher shortages and the post Falklands defence investment?
Increasing waiting times in the NHS would suggest Thatch did not put in enough to keep the show on the road.
And all this at a time of North Sea oil and selling off the family silver? Some legacy!
What Labour failure on inequality?
How does Thatch’s record compare?
Any thoughts on the global context?
Finally why don’t I want to dismantle the TB/ GB welfare state?
Why because it has worked and the people at the bottom have seen a significant improvement to their financial wellbeing and the quality of state services they receive.
As noted previously the issue with the deficit shroud waving is not anything to do with the nation’s finances, the private sector surplus balances out the public sector deficit. However it has everything to do with the right wing, upper middle class establishment’s unwillingness to pay for the welfare state as it now stands and their desire to generate tax cuts for themselves when the recovery gets going for real.
They are all dog boilers now.
For the record — what is a dog boiler?
A dog boiler is a member of the upper middle class establishment or one of their media / gullible fellow travellers who if asked, would rather have the poor and the unemployed consume their family pet for sustenance than have the state offer a decent level of support in economically troubled times.
The viewpoint was very popular in the Great Depression and has been revived by a desperate Tory Party all at sea after the complete failure of Casino Capitalism and its hedge fund equivalent, Coin Clipping.
SJ Chandos
The latest figures only confirm what I said on this site some time ago. The so-called deficit crisis is a convenient smoke screen to mask the Conservative’s ideological imperative to attack public sector provision and the vital services upon which the majority of the population rely. We are ‘not all in this together,’ as Cameron claims. His class have no fear of the consequences of the massive cuts packages being prepared.
Cutting expenditure is the ‘first nature’ of conservatism and they are returning to it. The need to appease the financial markets seems to be the overiding objective of their economic policy. However, its effects will increase unemployment, take money out of the economy and plunge the weak UK economy in to a double dip recession.
Unfortunately, the rest of Europe seems to be accepting this austerity nonsense and planning cuts of their own. This could be significant in undermining the world capitalist upturn and plunging us in to depression.
Socialists should organise in their workplaces, trade unions, communities and social networks to build active resistance to the ideological assault upon jobs, services and pensions that is being prepared. Defend the public sector, defend jobs and promote class politics that places the blame for this crisis squarely where it should be, with the capitalist system, the cheap and nasty wide boys that run the markets and their political representatives!
SJ Chandos
The Thatcherite period demonstrated the bankruptcy and irrationality of capitalism. It was a counter-revolution against the post-war consensus on social welfarism and corporatism. It consciously increased unemployment, destroyed the UK’s manufacturing base and unfettered the markets to achieve its class objectives. In the process it inficted untold hardship and misery upon whole sections of the population, blighted lives and created many of the social-economic problems that we still suffer.
The Tory ‘Broken Britain’ mantra is perverse. Thatcherism broke Britain, destroying much of the decency and cohesion of post-war UK society. As for public expenditure not decreasing under Thatcher, yes well they had to pay for all that irrational waste and economic inactivity that they created. How much did the introduction of the Poll Tax cost in total? Lambeth and Liverpool Councillors were surcharged and disqualified for small public losses. Yet, the Thatcherites got away scot free with wasting millions on a ideologically driven scheme. Although thankfully it proved to be the political straw that broke the Thatcherite back!
Also, Thatcherism was fundamentally undemocratic, abolishing democratic institutions and replacing them with unaccountable quangos and regulatory bodies. Mr Cameron, who began the move towards government by quango, why the 1980s Tories of course.
Some very inconvenient truths!!!!