The Budget Debate is continuing with predictable rancour. Punch and Judy politics writ large. Harriot Harman, acting Labour leader, set the tone in her response to the Chancellor‘s statement, failing to outline any alternative policies or to admit a shred of culpability on behalf of the previous government for the economic mess in which the UK finds itself.
The detail will be teased out over the next few days, but Andrew Tyrie MP, chairman of the Treasury Select Committee, delivered the best instant assessment, concluding that the budget represents a good start for a government determined to take radical action on the deficit.
In George Osborne’s speech great emphasis was placed on the ’progressive’ credentials of the coalition’s plans. The Liberal Democrats are of course determined to protect the perception that they are committed to fairness, but the Conservatives too, under Cameron’s leadership, have consistently challenged the cooption of the word ’progress’ to a statist, centralist philosophy.
To this end the Chancellor has attempted to colour austerity measures with a distinct redistributionist hue. A 2.5% hike in VAT has been swallowed, as the most efficient means to instantly make a dent in the public debt, but elsewhere there are admirable efforts to make sure that the poorest people in society will be subject to least pain.
Public servants making less than £21,000 per year will be exempt from the public sector pay freeze. £1,000 has been added on to the personal allowance. Capital gains tax will go up, but rises will exempt those in the basic tax band. Benefits cuts will be targeted at people who can work, but are reluctant to do so.
In difficult times, the coalition has attempted to deliver a balanced budget. In the new spirit of openness which it claims it has instigated, it is now important that the government monitors closely how its policies impact the economy, and reviews them, both in the light of their effectiveness, and changes in the world economy.