A look at the impact of the budget, from John Birchall
The emergency budget is beginning to be analysed and many commentators see it as more of a gamble than they had thought. When the Public Spending Review is announced in the autumn it will be savage. Just health and international development will be exempt – though as some health services are provided by local authorities there may be some cuts even in something as central to the welfare state as that. One is left wondering what the outcome would have been if the Liberal Democrats had not been the coalition.
The sweeteners to business and the markets seem to have worked but for how long. Unemployment will fall but at the end of the period it will remain at over 6%.
Looking at the figures in just a little more detail it appears that:
‘UK households, on average, will be about £400 a year worse off, Budget documents suggest, with the poorest 10% losing £200 and the richest £1,800, although the poorest will be hit harder than most as a percentage of their income.’
The full details of the impact of the cuts will not be revealed until Wednesday 20 October, when Mr Osborne publishes his spending review. To balance the budget and it will be interesting to note how Krugman and others who see the UK as having come through the worst recession in living memory without economic meltdown read the Tory numbers. Is it good economics, or is it lots of politics hiding behind the ‘hole’ we are in.
You might like to ask your economists what will be cut from say education if the graph below is to be achieved.
May be the ‘dismal science’ just got even more depressing!
Let’s hope the Treasury and OBR have got their numbers right – if not the hole just got bigger!
http://www.hm-treasury.gov.uk/
Click here for an alternative point of view:
http://www.guardian.co.uk/uk/2010/jun/23/budget-welfare-poor-ifs-report?CMP=AFCYAH