Tuesday, 22 June 2010

Budget will hit the poorest hardest and undermine economic recovery

The government's claim that this budget is protecting the poor is a con. Increasing VAT, slashing welfare benefits and freezing public sector pay will hit the poorest and low income earners hardest. The Lib Dems have been particularly deceitful. They opposed VAT before the election and are now reneging on that promise. As President Obama  has warned, savage cuts in state spending could plunge us into a new recession. It is impossible to see how the private sector can be expected to restart the economy when across Europe reduced public spending is increasing unemployment, hitting consumer spending power and restricting markets. State investment in the economy is vital at this time. Instead the government is using the recession to force though an ideologically driven assault on the role of the state in the economy. This budget is Thatcherite in its thinking and it will have Thacherite consequences of deepening social division and prolonging recession.