The Budget VAT Up - What do the LIB DEMS say to that

George Osborne says his top priority is cutting the deficit. But in order to get the deficit down, you need to keep economic growth up and you need to keep unemployment down. You don’t get borrowing down by pulling the plug on support for business, throwing people out of work and stifling economic growth.

The Chancellor delivered a budget that will throw people out of work, hold back economic growth and damage the public services we all rely on – and increased VAT from 17.5% to 20%, so that higher prices will be paid in the shops by everyone, from pensioners to the unemployed

The Tories’ cuts are unfair to families and older people: cuts to the disability living allowance, cuts to help for the jobless, cuts to tax credits, cutting back free school meals, and cuts to Child Benefit, which they have frozen for the next three years.

What the country needed was a Budget to support economic growth, protect jobs and cut the deficit fairly. Instead the Tories gave us a reckless Budget that pulls the rug out from under the recovery. And they couldn’t have done it without the support of the Lib Dems, who have let down everyone who voted for them in the election just a few weeks ago.

No it doesn't. Borrowing money to pay for unnecessary jobs is economic stupidity. You don't pay VAT on food and many other essentials. The public sector has been holding back economic growth for far too long. Borrowing fortunes to subsidise it is and then calling that growth is just a mirage.

George Osborne says his top priority is cutting the deficit. But in order to get the deficit down, you need to keep economic growth up and you need to keep unemployment down. You don’t get borrowing down by pulling the plug on support for business, throwing people out of work and stifling economic growth.

 

The Chancellor delivered a budget that will throw people out of work, hold back economic growth and damage the public services we all rely on – and increased VAT from 17.5% to 20%, so that higher prices will be paid in the shops by everyone, from pensioners to the unemployed

 

The Tories’ cuts are unfair to families and older people: cuts to the disability living allowance, cuts to help for the jobless, cuts to tax credits, cutting back free school meals, and cuts to Child Benefit, which they have frozen for the next three years.

 

What the country needed was a Budget to support economic growth, protect jobs and cut the deficit fairly. Instead the Tories gave us a reckless Budget that pulls the rug out from under the recovery. And they couldn’t have done it without the support of the Lib Dems, who have let down everyone who voted for them in the election just a few weeks ago.

And how do you suggest you do that? Cuts had to be made and those cuts were going to be to public services and the people who rely on public services are generally the less well off / families / elderly, then the budget was always going to be "unfair". What would you cut? There isn't much more scope left to tax people more without disincentivising people to work

No it doesn't. Borrowing money to pay for unnecessary jobs is economic stupidity. You don't pay VAT on food and many other essentials. The public sector has been holding back economic growth for far too long. Borrowing fortunes to subsidise it is and then calling that growth is just a mirage.

I think you may not realise that Vat is not charged on Food Children's Clothes Books Newspapers and Magazines but on much of the rest of our day today activity and was the rise was campaigned against by the Liberal Democrats who have let down most who voted for them in the election just a few weeks ago.

I agree that cuts are required but it is the severity of them which concerns me.

The cuts will mean loss of jobs not only in the Public Sector but also the private as well leading to less Tax Revenue and possibly more unemployment benefit.

The Public Sector has been used to keep the economy going since the recession and without it I hate to think what the situation would be.

With regard to the Private Sector growing in the present Global situation with cheap imorts from China and the East and other countries having little slack it is going to be difficult to export.

With less money in peoples pockets it is also going to be difficult to sell more in the UK

And how do you suggest you do that? Cuts had to be made and those cuts were going to be to public services and the people who rely on public services are generally the less well off / families / elderly, then the budget was always going to be "unfair". What would you cut? There isn't much more scope left to tax people more without disincentivising people to work

The independent Office for Budget Responsibility says today that growth next year would have been higher and unemployment lower with Labour’s responsible, credible plan to halve the deficit over four years.

Instead, the Tories’ cuts are unfair to families : cuts to the disability living allowance, cuts to help for the jobless, cuts to tax credits, cutting back free school meals, and cuts to Child Benefit, which they have frozen for the next three years.

 

.....

 

The cuts will mean loss of jobs not only in the Public Sector but also the private as well leading to less Tax Revenue and possibly more unemployment benefit.

 

 

The Public Sector has been used to keep the economy going since the recession and without it I hate to think what the situation would be......

 

I think some people just don't understand how much work is given to private companies by the public sector. I'm talking about large construction contracts (I bet the likes of Bovis, McAlpine are shi**ing themselves at the prospect of schools and hospitals development programmes being curtailed) and small supply contracts.

I think some people just don't understand how much work is given to private companies by the public sector. I'm talking about large construction contracts (I bet the likes of Bovis, McAlpine are shi**ing themselves at the prospect of schools and hospitals development programmes being curtailed) and small supply contracts.

I agree I used to work for an IT Company supplying Hardware Software and Services to Government departments dont work there now but I would expect them to be worried where there Sales are going to come from in the future

I think some people just don't understand how much work is given to private companies by the public sector. I'm talking about large construction contracts (I bet the likes of Bovis, McAlpine are shi**ing themselves at the prospect of schools and hospitals development programmes being curtailed) and small supply contracts.

Spot on, the school I work in was planning on starting their re-build this coming academic year...now that is on hold...

And how do you suggest you do that? Cuts had to be made and those cuts were going to be to public services and the people who rely on public services are generally the less well off / families / elderly, then the budget was always going to be "unfair". What would you cut? There isn't much more scope left to tax people more without disincentivising people to work

One simple word: 'Trident'.

It just makes me laugh this VAT rise because during the election campaign the Lib Dems accused the Tories of planning to it and the Tories denied it!

It's the fairest tax to raise, IMO. The rich pay more because they spend more, and vice versa.

It just makes me laugh this VAT rise because during the election campaign the Lib Dems accused the Tories of planning to it and the Tories denied it!

Yes that is my point too.

The Lib Dems are not coming out very well in this coalition

Yes that is my point too.

 

The Lib Dems are not coming out very well in this coalition

I don't know about that, they are getting a lot of their initiatives and ideas into law, better than a full on Tory government anyday.

Spot on, the school I work in was planning on starting their re-build this coming academic year...now that is on hold...

Good. All you need is a room with desks chairs and a blackboard.

Good. All you need is a room with desks chairs and a blackboard.

You forgot books Stanley. Not everyone wants to end up a thick racist like you.

Yes that is my point too.

 

The Lib Dems are not coming out very well in this coalition

They're not really the ones with the power in the relationship though - mostly all of the policies and cuts coming into action now are Tory initiatives.

It's a shame really, because the Lib Dems do have a slightly 'sixth form politics' ideaology, but they do also have a lot of very good ideas and plans which just aren't being shown the light of day and are being replaced by the Tory ones.

I think the Lib Dems are probably realising now that a pact with Labour would have been a better idea as they'd pander slightly more to their needs than the Tories who don't really give a f*ck it seems.

You forgot books Stanley. Not everyone wants to end up a thick racist like you.

C'mon - be fair to Stanley. His lot burn books IIRC.

I'm not sure John B understands what a coalition is.

I liked how Nick Clegg said thankyou to David Cameron during the budget. Despite the divisions the discredited Labour party are trying to create the coalition are working as a team and putting their differences aside for the good of the country.

One simple word: 'Trident'.

Ok using Greenpeaces figures (to give a worst case picture) Trident will cost £97bn over 25 years with up front costs of £20bn leaving running costs of £3bn per year. Our deficit is approx £160bn per year, so where will the other £157bn come from?

The independent Office for Budget Responsibility says today that growth next year would have been higher and unemployment lower with Labour’s responsible, credible plan to halve the deficit over four years.

 

Instead, the Tories’ cuts are unfair to families : cuts to the disability living allowance, cuts to help for the jobless, cuts to tax credits, cutting back free school meals, and cuts to Child Benefit, which they have frozen for the next three years.

So in 4 years time under labour we will still be losing £80bn per year - good plan that. The simple fact is we are living beyond our means and we have to tighten public spending, hence the cuts. The labour plan still required cuts, they didn't have the bottle to announce them before an election. The government, who ever won, have to make some cuts - what cuts would you consider to be fair?

So in 4 years time under labour we will still be losing £80bn per year - good plan that. The simple fact is we are living beyond our means and we have to tighten public spending, hence the cuts. The labour plan still required cuts, they didn't have the bottle to announce them before an election. The government, who ever won, have to make some cuts - what cuts would you consider to be fair?

Labour are in the pocket of the Unions so they would have gone out of their way to raise taxes rather than make the necessary cuts to the public sector. The Libservatives have done the right thing in keeping tax rises to a minimum and i'm grateful to them for that.

Well im in for a wage rise over two years!

So in 4 years time under labour we will still be losing £80bn per year - good plan that. The simple fact is we are living beyond our means and we have to tighten public spending, hence the cuts. The labour plan still required cuts, they didn't have the bottle to announce them before an election. The government, who ever won, have to make some cuts - what cuts would you consider to be fair?

Not true - before the election, every party said there would have to be cuts. No party would be drawn on how the cuts would be managed and how deep they'd be.

Not true - before the election, every party said there would have to be cuts. No party would be drawn on how the cuts would be managed and how deep they'd be.

I was probably being a little biased there. No party had the bottle on account of it being electoral suicide. John B point was he said Tories cuts are unfair - I suspect he would have found the labour cuts equally unpalletable.

Ok using Greenpeaces figures (to give a worst case picture) Trident will cost £97bn over 25 years with up front costs of £20bn leaving running costs of £3bn per year. Our deficit is approx £160bn per year, so where will the other £157bn come from?

We could nuke the people we owe the money to.

I was probably being a little biased there. No party had the bottle on account of it being electoral suicide. John B point was he said Tories cuts are unfair - I suspect he would have found the labour cuts equally unpalletable.

labour cuts? if labour got back in we wouldnt have any cuts, we would be heading towards greece, and lest we not forget which party has opposed the euro for many years ...oh how well thats standing up now, we would be in it if most of the labour supporters had their way ...and without germany, europe would be ****'d... so really, who spends their life living out of an overdraft from the bank without expecting to have to pay it back at some point? all we are doing is making plans to pay it back now, and imo ...growth wont be that badly affected

I think some people just don't understand how much work is given to private companies by the public sector. I'm talking about large construction contracts (I bet the likes of Bovis, McAlpine are shi**ing themselves at the prospect of schools and hospitals development programmes being curtailed) and small supply contracts.

That's irrelevant...it's still only recycled public money....It's not like it's come from wealth that's been 'created'........Just your Government taking 'your' money or borrowing against your children and grandchildren's money....and then deciding how to spend it on 'your' behalf.

I think some people just don't understand how much work is given to private companies by the public sector. I'm talking about large construction contracts (I bet the likes of Bovis, McAlpine are shi**ing themselves at the prospect of schools and hospitals development programmes being curtailed) and small supply contracts.

But BTF, borrowing billions of pounds to spend in the private sector is not the creation of wealth, it is the borrowing of wealth. Borrowing that has to be paid back.

So in 4 years time under labour we will still be losing £80bn per year - good plan that. The simple fact is we are living beyond our means and we have to tighten public spending, hence the cuts. The labour plan still required cuts, they didn't have the bottle to announce them before an election. The government, who ever won, have to make some cuts - what cuts would you consider to be fair?

So what is wrong with cutting fairly in a responsible manner keeping more people in employment and keeping Public Services.

You dont have to cut the debt in one swell swoop

labour cuts? if labour got back in we wouldnt have any cuts, we would be heading towards greece, and lest we not forget which party has opposed the euro for many years ...oh how well thats standing up now, we would be in it if most of the labour supporters had their way ...and without germany, europe would be ****'d... so really, who spends their life living out of an overdraft from the bank without expecting to have to pay it back at some point? all we are doing is making plans to pay it back now, and imo ...growth wont be that badly affected

I dont understand how you can post that comment as you have little idea of Labour Policies I suggest that you look at their Website to have a look

http://www.labour.org.uk

you just cannot cut that kind of deficit with tax rises on the rich.There just aren't enough of them

and to be fair to the LD's, the 50% income tax rate is still there, Capital gains tax has increased considerably, (really an anti avoidance measure), and real improvements in the income tax threshold have been made. This last measure is a top idea as it will proportionatally help the less well off most, whilst encouraging people into lower paid work.

Re VAT, as Vince Cable said, it may be a regressive tax, but it tends to be less regressive on those in the bottom 10%, because of the exempt categories.

Its a very tough budget,Imagine what this budget would have bee like with a majority tory govt !!

I dont understand how you can post that comment as you have little idea of Labour Policies I suggest that you look at their Website to have a look

 

http://www.labour.org.uk

maybe I can say that because they are the ones opposing the budgets cuts to date and still opposing it saying it will affect fiscal stimulus and growth, that and the fact that really having been in government for 13 years and sold the majority of our gold levy, they are the ones that got us in the debt in the first place? maybe just maybe thats why ...

maybe I can say that because they are the ones opposing the budgets cuts to date and still opposing it saying it will affect fiscal stimulus and growth, that and the fact that really having been in government for 13 years and sold the majority of our gold levy, they are the ones that got us in the debt in the first place? maybe just maybe thats why ...

I agree they were in power for thirteen years and carried out good work but the debts were mainly due to the affect of the Global banking crisis as can be seen from the misfortunes of other countries

If the Labour Government had adopted the Policies of the Tories in 2007/2008 we may have been in a similar position to Greece but we are not because they did not seem right at the time

So who knows if the Tory Policies are right now?

I voted Lib Dem. I am an above average earner with two children, currently renting.

I'm reasonably happy with the Budget.

It is brave. It will hit hard, but in the circumstances there was no avoiding this.

Whilst I hold Labour partly responsible for the position we find ourselves in, I am a firm believer that EVERYONE has to take responsibility for this.

Government. Businesses. Lenders. Individuals.

Everyone has contributed through greed, irresponsibility, ignorance or laziness in one way or another. The price we need to pay is frugal living.

I run a tight ship in my house and everyone is very much used to frugal living - so we'll plod on through this and come out the other side no worse off.

The ONLY solution in this country is changing millions of peoples mentalities towards money - it's not a very practical thing to be able to do and will potentially take generations to do. In the meantime, action had to be taken and it was never going to be popular and please everyone.

Stop crying, man up and get on with it.

I voted Lib Dem. I am an above average earner with two children, currently renting.

 

I'm reasonably happy with the Budget.

 

It is brave. It will hit hard, but in the circumstances there was no avoiding this.

Whilst I hold Labour partly responsible for the position we find ourselves in, I am a firm believer that EVERYONE has to take responsibility for this.

 

Government. Businesses. Lenders. Individuals.

 

Everyone has contributed through greed, irresponsibility, ignorance or laziness in one way or another. The price we need to pay is frugal living.

I run a tight ship in my house and everyone is very much used to frugal living - so we'll plod on through this and come out the other side no worse off.

 

The ONLY solution in this country is changing millions of peoples mentalities towards money - it's not a very practical thing to be able to do and will potentially take generations to do. In the meantime, action had to be taken and it was never going to be popular and please everyone.

 

Stop crying, man up and get on with it.

Jeeez....what makes you think such a reasonable common sense view is appropriate for this forum...?

:-)

Jeeez....what makes you think such a reasonable common sense view is appropriate for this forum...?

 

:-)

Oops, sorry. I thought I was posting on MoneySavingExpert :-p

So what is wrong with cutting fairly in a responsible manner keeping more people in employment and keeping Public Services.

 

You dont have to cut the debt in one swell swoop

They are not cutting the deficit in one go they are doing it over 4 years, Labour wanted to cut it by 50% over the same period. You still haven't said what you would consider to be fair in terms of cuts. Public sector were going to go irrespective of whoever got in.

Another point to consider. The markets reacted favourly to this budget. The gilt market (where the government gets borrowing from improved in our favour). If the market decided that we had not taken sufficient enough action then there was a good chance that we as a country would have been downgraded. If that happens then the interest rate at which the UK can borrow money increases and there is even less in the pot to spend of public services therefore requiring even greater cuts down the line. Prior tothe budget the national debt was forecast to reach £1.4 trillion in five years. The interest on that would be £70 bn a year, more than the entire NHS budget. The UK has had to cut and cut hard - there isn't any long term sustainable alternative.

I agree they were in power for thirteen years and carried out good work but the debts were mainly due to the affect of the Global banking crisis as can be seen from the misfortunes of other countries

We were carrying a £60 billion structural deficit before the credit crunch / recession. Racking up a deficit of this magnitude during a boom is totally irresponsible. I suppose Gordon did it because he thought he had eliminated boom and bust.

Last night on sky they showed our countries debt and it was on a ticker as it carried on up, it was sobering.It is not the 175b that is widely peddled but close to a trillion.

If you have credit card debts the longer it is left you pay massive repayments on the interest and that interest debt gets bigger until it is beyond you.

We have to grab the nettle. i dont want to see anyone lose their job, but also I want to see more value for money. BTF mentions the big building companies worrying, well they will have to trim their prices and get the work.

Tendering for big government contracts leaves big profits and the way they are set up only the big boys can tender and so to a degree it is a closed shop.

If the managers started to do their jobs properly and got the staff employed to work to their best as in the private sector then we would perhaps make the public sector more dynamic and save costs ,then jobs. It has been widely reported that the public sector has more sick days than the private sector,why is that?

I believe there is not a public worker who does not have a story of stupid waste of our money and in their heart of hearts know it can be improved.

I was glad the lower paid in the public services got rewarded for their hard work and now the higher paid public servants will find things a bit harder, time to get in the real world IMO.

This is a budget of necessity and at long last we're getting some sensible fiscal policy and dealing with the massive Labour deficit.

A VAT rise brings in a lot of revenue for such a painless measure. The essentials are VAT free, and if this measure wasn't taken there would be no raising of the tax threshold and income tax would have to raise. Taking tax credits off people earning £50,000 a year is hardly "cutting tax credits" and a freeze on child benefit keeps this benefit universal (although I would have preferred higher rated tax payers to lose this).Many people (including myself) in the private sector have had pay freezes, so why should public sector workers be different? There is also a small raise for the lowest paid easing their burden slightly.

The markets have reacted strongly to this budget. Had Labour managed the public finances better, we would not need have needed some of these measures. I know who is to blame for my standard of living going down, and it is not George Osbourne.

Last night on sky they showed our countries debt and it was on a ticker as it carried on up, it was sobering.It is not the 175b that is widely peddled but close to a trillion.

If you have credit card debts the longer it is left you pay massive repayments on the interest and that interest debt gets bigger until it is beyond you.

We have to grab the nettle. i dont want to see anyone lose their job, but also I want to see more value for money. BTF mentions the big building companies worrying, well they will have to trim their prices and get the work.

Tendering for big government contracts leaves big profits and the way they are set up only the big boys can tender and so to a degree it is a closed shop.

If the managers started to do their jobs properly and got the staff employed to work to their best as in the private sector then we would perhaps make the public sector more dynamic and save costs ,then jobs. It has been widely reported that the public sector has more sick days than the private sector,why is that?

I believe there is not a public worker who does not have a story of stupid waste of our money and in their heart of hearts know it can be improved.

I was glad the lower paid in the public services got rewarded for their hard work and now the higher paid public servants will find things a bit harder, time to get in the real world IMO.

Under European Procurement legislation there cannot be closed shops. Tendering has to be open and competitive. I know this as, before auditiing contracts, I used to be a procurement manager in the NHS. However, SMEs tend not to tender for large construction contracts because they can't afford the tendering process. But local authorities are encouraged to use SMEs for smaller contracts. I have seen this happen in contracts I've audited for a number of Police Authorities, NHS and local governments.

What happens in practice is that the big boys illegally operate cartels and Buggins Turn (google Nottingham Hospitals and you'll get the drift) and there are a number of cases of this before the authorities at the moment.

What will actually happen is not that the big boys will trim their OWN costs, Nick. What they will do, and what they've always done, is to squeeze the bloody life out of their subcontractors. Most of the big boys don't have directly employed labour anymore. They just project manage.

Under European Procurement legislation there cannot be closed shops. Tendering has to be open and competitive. I know this as, before auditiing contracts, I used to be a procurement manager in the NHS. However, SMEs tend not to tender for large construction contracts because they can't afford the tendering process. But local authorities are encouraged to use SMEs for smaller contracts. I have seen this happen in contracts I've audited for a number of Police Authorities, NHS and local governments.

 

What happens in practice is that the big boys illegally operate cartels and Buggins Turn (google Nottingham Hospitals and you'll get the drift) and there are a number of cases of this before the authorities at the moment.

 

What will actually happen is not that the big boys will trim their OWN costs, Nick. What they will do, and what they've always done, is to squeeze the bloody life out of their subcontractors. Most of the big boys don't have directly employed labour anymore. They just project manage.

Its not just the cost of tendering (although the size of the RFI paks are mind boggling). The cost of operating the contracts can also discourage SMEs as they are just not geared up to deal with the sheer level of bureacracy that is encountered when dealing with the public sector, speaking as someone who has given up working with them for this very reason.

I agree they were in power for thirteen years and carried out good work but the debts were mainly due to the affect of the Global banking crisis as can be seen from the misfortunes of other countries

Now you're just being silly.

I agree I used to work for an IT Company supplying Hardware Software and Services to Government departments dont work there now but I would expect them to be worried where there Sales are going to come from in the future

This. I jumped ship 2 months ago from an IT co. that supplied technical specialists, hardware and software to gov. dept. Glad I moved now.

I wonder how our very highly rated health care system will compare in years to come?

http://news.bbc.co.uk/1/hi/health/10375877.stm

The CBI Director General said "The chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term. This Budget is the UK's first important step on the long journey back to economic health. The autumn spending review, and the re-engineering of public services, will be equally challenging."

A spokesmen for Fitch Credit Ratings Agency said "Our preliminary assessment of today's Budget is that it sets out an ambitious deficit reduction path that, if delivered upon, will materially strengthen confidence in UK public finances and its 'AAA' status."

Even Andrew Sparrow of the Guardian said "Generally, Osborne's budget has got a better reception than he might have expected".

There were two choices for Osbourne, deal with Labours mess or try and fudge it. Thankfully he had the balls to do the right thing, and in 5 years time the British people could well reward him with another 5 years in office.

I wonder how our very highly rated health care system will compare in years to come?

 

http://news.bbc.co.uk/1/hi/health/10375877.stm

Isn't the NHS exempt from the 25% cut though? Yes the staff may have a pay freeze (how many people do you know who have had a pay rise in hte last few years, public OR private?) but that shouldn't signal a huge downturn in the efficiency.

Isn't the NHS exempt from the 25% cut though? Yes the staff may have a pay freeze (how many people do you know who have had a pay rise in hte last few years, public OR private?) but that shouldn't signal a huge downturn in the efficiency.

I would be difficult for the NHS to get any less efficient. Doubling the spending on it made very little difference.

Isn't the NHS exempt from the 25% cut though? Yes the staff may have a pay freeze (how many people do you know who have had a pay rise in hte last few years, public OR private?) but that shouldn't signal a huge downturn in the efficiency.

I went cycling with a mate who works in operating theatres. Although there is a pay freeze, he goes up a pay band for every year's service completed. So although there won't be a percentage increase in the pay bands, people will move up the pay scales. They essentially get two pay rises a year and it is only the percentage increase that is being frozen. There are many in the NHS that will earn more next year, for doing the exact same amount of work as they did this year/last year......

Meanwhile, back in the real world (the private sector), a pay freeze means no extra money, zero, zilch. In fact many are having their salaries reduced. Unfortunately, those in cloud cuckoo land have no concept of this.