My candid opinion then is that the assumptions underpinning the budget are simply absurd: there is no way this growth in incomes is gong to happen whatever changes are being made to the income tax system.
Where George Osborne’s departmental cuts might fall.
The Institute for Fiscal Studies (IFS) has today produced a graph in its post-budget analysis showing just how regressive this government’s measures are – or in plain English, how favourable the coalition’s policies have been to the wealthy.
Budget 2013: IFS says borrowing in 2014 will be 70bn more than hoped in 2010.
In yesterday’s budget George Osborne announced that the personal income tax allowance would be raised to £10,000 from next year, earlier than 2015 as originally planned. Superficially taking people out of income tax does sound like a tantalising prospect – poorer people will have more money in their pockets, will they not? There are two major problems with this.
George Osborne’s 2013 budget has received a tepid response in Scotland, Wales and Northern Ireland.
As the UK economy continues to flat line, at the centre of the chancellor’s Budget plans to stimulate growth is a £3 billion annual infrastructure budget much of which is earmarked for damaging and regressive road building projects. But experience shows that new roads seldom solve people’s transport problems.
When we assess the Osborne borrowing record, let’s be clear that it’s not just headline borrowing that is much higher than he promised a couple of years ago. Buried in today’s budget is also the hidden borrowing of future pension promises where he’s already spent some of the money designed to pay for them.
The budget will increase inequality and the bias against the small business sector. It is another opportunity lost, but if you drink 1,000 pints to drown your sorrows you will save £10. Doesn’t that say it all?
The below graph shows the additional borrowing in each year compared to the estimates at the Autumn Statement in December.
