Big cuts to be announced in budget
Tuesday 22nd June 2010, 6:30AM BST.
George Osborne is today set to unveil a £30 billion package of spending cuts and tax rises aimed at slashing Britain’s budget defecit.
The Chancellor is expected to strip millions of middle-income families of child-related benefits as well as targeting the pay packets of public sector workers in an Emergency Budget billed as the most significant and hardest hitting for a generation.
Treasury officials were preparing the ground for a budget which will cause pain across the economy as the planned spending cuts and tax rises bite into Britain’s fragile recovery.
Among the measures likely to be introduced by Mr Osborne are:
* A rise in the rate of VAT from its current level of 17.5 per cent. Putting it up to 20 per cent would bring in more than £10 billion a year on its own – however, it could be put up by less than 2.5 percentage points, or the increase could be deferred for fear of harming highstreet sales.
* Cutting the number of families eligible for child tax credit, currently paid to families with incomes of up to £58,000, or £66,000 if the child is under the age of one.
* Cutting the threshold to an income of £30,000 would see more than two million families losing out.
* Six million public sector workers face sweeping cuts to their pay and pension arrangements after David Cameron warned: “If you restrain pay you protect jobs.”
* A tax on banks to raise at least £1 billion – possibly levied on their balance sheets rather than profits or bonuses.
* A rise in Capital Gains Tax from its current flat level of 18 per cent, putting it closer to 40 per cent. However, following a campaign against the increase, there are likely to be significant concessions aimed at those approaching retirement age and entrepreneurs.
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A raise in vat to 20% will kill small businesses.
Any one who works for the public sector on a wage exceeding £50K whould take a 10% pay cut
Stop overseas aid until our deficit is down and reduce spending on missiles
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Not so sure a rise in VAT would kill small businesses. The drop to 15% then rise back to 17.5% didn’t seem to make much difference either way.
Businesses adapt.
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Just enjoy it..The voters wanted a change and a party that could put things right. They have got change and it’s coming at a big price. Even public sector workers and middle income families voted for them. So just get on with it. You got what you deserve voters!!
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stjoe – voters thought they were getting better economic management after they lost faith in Brown and Labour.
They believed the lies and spin of Cameron and Osborne about the state of the country’s finances.
Now Osborne can ransack the public sector to hand it all on a silver platter to his chums in control of the private sector companies who will take on the new work. People think these are “cuts” – they’re not – the work still needs to be done, but it will now be done by the private sector, at a profit, without public control.
You’re right – we get what we deserve. But voters were misled.
The Green Party believes that fairness is worth fighting for. Former Labour voters who turned to the Lib Dems based on their lies about being fair should now turn to the Green Party as the only viable alternative for a party that stands up for the marginalised, the poor, the trades unions and the unemployed.
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Well said Connor..It’s a pity people have short memories and only wise up after the event!! Well they are going to wise up now and very fast..Unfortunately they have 5 years left to reap what they sow.Now it’s the government that will reap and sow very little!
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Maybe if the green party had better policies and better candidates it would get more seats. Maybe if they also stood up for the workers too…..
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Blair and Brown promised that we would no longer have a boom and bust economy but instead presided over the biggest boom and bust since the 30s.
They had the good years but put nothing aside to act as a buffer for leaner times. Instead they opted for a ” look how good we are approach ” to being in power – instead of making tough decions on spiraling housing prices, credit card debt and peoples personal finance. We are all guilty of looking how much equity we had in our houses and planning what to do with the money, cars, holidays etc etc.
Unfortunatley it has all come at a price and today we will have to make the repayments.
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stjoe – your bang on the money there ! Did people really think things would change for the better ? When have any of the parties done anything for the People ??? your really believed the promises these parties make ? when have any of the parties kept promises ? When will people realise these parties are in it for one thing only…………..THEMSELEVES !!!
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Don’t cut front line services or salaries, cut the public sector management levels where possible.
Don’t add VAT to food, add it to “choice based” things….
Finally, we really need to start making things in this country again. Get people building wind farms off-shore, convert the old docks and train people to do it.
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I’m one of the ones who doesn’t believe that the debt is as bad as the Tories make out, and they are doing this for political reasons, not economic. There’s no way Mr Brown and New Labour caused the recession in all those other countries, the Coaltion should be be fair. I wish they would leave the public sector alone, they need to realise that the public sector is part of the economy, not it’s enemy. I work in the public secor and I earn 11p an hour more than the minimum wage, and I have seen colleagues vomiting with fright at the door before they go into work. Have an easy life and a huge pension in the public sector, eh?
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That’s 11p too much ;)
I’d like to think people are smart enough to appreciate how crucial the public sector is. I do think some decisions need to be made with the number of high earners there though. Streamlining there could cut the defecit and also secure jobs / improve contracts further down the line. I hope.
There will always be headlines about sickness rates etc, so maybe if contract terms are different to the private sector on things like that, there could be room for movement.
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Maybe the debt isn’t as bad as they make out. Whether is 900 billion pounds or 3 trillion pounds doesn’t make much difference.
Any deficit, which isn’t the same as debt, over time can add up to problems.
A small deficit is preferred to a big deficit. What we don’t want is to end up like Greece. Unlikely, not impossible.
True, Labour didn’t cause recession – they merely borrowed to try and deal with it. Borrowed a lot. At some point whichever government got in would have to cut the deficit.
Congrats for earning more than minimum wage – plenty earn exactly the minimum wage in other sectors. And have to fund their entire pension themselves.
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The banks are responsible for over 700 billion of the pay back anyway. The national debt is around 156 billion. Its bad enough though.
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Don’t confuse debt with deficit.
£156 billion deficit is that much being spent over and above income.
Debt is the total owed (several hundred billion up to a few trillion, depending which figures you use), which increases by the amount of deficit.
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1) Exit the EU
2) Exit Afghanistan
3) Cancel ALL Foreign Aid
4) Stop and reverse third World immigration.
Then give us all raise with the proceeds(except public sector)
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Well it looks like the public sector are going to get a rise afterall..Only those under 21k though.
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I think we can guess that the ones earning under £21k are ‘poor’. Though a wage of £420 a week isn’t that bad for many people…..
Thats above average wage in the west midlands, though below in other places.
And at least takes away the idea that someone on £100k+ is getting a few grand rise….
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