Tough? Yes. Fair? No. Heartless, ideologically-driven and economically risky, certainly. George Osborne has adopted the guise of a gambler at a roulette table, using workers’ jobs and family benefits as chips to bet on a ball that may haphazardly fall into one or other wheel marked “recovery” or “double-dip” recession. He is betting that the economy will not implode under a welter of measures which run counter to any serious attempt to bring down the national debt. In this enormous gamble with the nation’s future, hundreds of thousands of people are likely to lose their jobs on an expectation that the private sector will pick up the challenge and breathe life into an enfeebled economy.
It won’t. It never does. Apart from the pain which we are all supposed to share, the Budget promises at best stagnation and at worst puts at risk investment, growth and exports. The Chancellor’s presentational coup for
the markets contained illusion, delusion and camouflage. The illusion was that the draconian axe and tax package was “unavoidable” because of the debt piled up by the previous government, a government which had a genuinely fair and fiscally responsible plan for dealing with the crisis caused by the banks.
The very same banks who are now gorging on eye-popping profits against which the tiny levy imposed in the Budget as a punishment for past sins is small change in the pocket of an Armani golf caddy.
The Budget was delusional in that it is based on that old Thatcherite canard that a nation’s finances can be compared to the running of a household budget, the motivating drive behind the ideological obsession with
the achievement of a budgetary surplus. The Budget, a five-year economic plan, has one overriding purpose and that is the reduction of the state, one of the many potent truths about this package over which the Liberal Democrats are in a state of tactical denial. Having campaigned, and presumably been elected on, a platform which included a pledge not to increase VAT, Vince Cable and his fellow Lib Dem ministers now have to defend the indefensibly regressive increase to 20 per cent.
The first crack in what may yet become a fissure in the coalition has appeared. The camouflage came in the form of measures to disguise the fact that cutting public expenditure as much as this will hurt most those vulnerable people who depend most on it. With the exception of the electorally-targeted pensioners, benefit claimants will feel the full impact of the pain. When he was being careful to be seen to attempt to leaven the pain with “fairness”, Mr Osborne ring-fenced a number of areas, for example public sector workers earning below £21,000 who will be protected from the two-year wage freeze. Such protection is worthless if you are out of a job in the first place, as a million public sector workers are expected to be in the next year.
The economic brakes have been slammed on just as Britain was emerging from recession. No, Britain was not broken. But it will be if this Government runs its course.
