Tuesday, 22 June 2010

Osborne's brutal Budget to leave LibDems on the rack

George Osborne’s first Budget later today promises to be a bloody affair. For the first time LibDem members – not MPs because many have been bought off with Coalition jobs but the party outside Westminister – will see what they have signed up for. The price of government will be to contradict the spirit of their election manifesto.
The Chancellor has chosen to tackle the massive financial deficit bequeathed by Labour in such a brief time span that we face years of austerity like no other in peacetime.
The coming attack on the public sector is going to be savage. Osborne and his boss David Cameron must explain why we face cuts worse than those to be confronted by the Greeks when our economy is in much better nick. Otherwise they will leave themselves open to the charge they are motivated by ideology rather than what is best for the UK.
Osborne’s claim that he wants to repeat the experience of the Canadians in the mid-1990s is a false analogy. True there were massive cutbacks as Canada levelled its debt mountain but there were major differences between our situation and theirs.
There was a long lead time as the government of the day entered into genuine consultation with the people; no sectors were ring fenced; and the country’s economy was helped dragged out of recession by the recovery of it powerful neighbour the USA. Our biggest export market Euroland has already entered a period of further belt-tightening.
There was a bloodbath in public sector jobs as Canada’s Liberal government swung the axe but it had a substantial working majority. Tory Cameron and Osborne on the other hand are dependent on the continuing support of the LibDems.
Fault lines may well appear as the squeeze tightens. Meanwhile there is an unusual alliance of opinion on the wings of both the Left and the Right in the UK opposed to higher taxation.

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