The OBR confirmed that the deficit the coalition faces is £23 Billion less than expected, due to the policy measures put in place by Alistair Darling, making the justification for heavy cuts in public spending and higher taxes less credible. It also confirmed that household income was relatively strong through the recession as weaker salaries were supported by tax changes such as the temporary cut in VAT.
The current chancellor George Osborne appears to be still committed to finding £85 Billion in order to balance the books by the end of the current coalition term.[A commitment he made in January 2010] Of the £85 Billion approximately £68 Billion will be in cuts, and £17 Billion in tax rises. There is speculation that due to the structural deficit increasing this year by an estimated £12 Billion, he will increase tax rises an extra £2.4 Billion.
The Coalition has often referred to the Canadian model in the 90’s and the reductions they made to their deficit. Fortunately sufficient knowledgeable people have convinced them that this would not work. Possible they have been looking at what Japan did in the 90’s. This led to 10 years of stagnant growth.
The Times in a light hearted analogy between The World Cup and politics, suggesting ‘England team now would hardly have a slower centre-half pairing if Cameron and Clegg swapped with Terry and Carragher (would the Government suffer notably?)’.
Vic Farron RFT Express. Read the Full Article
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