Wednesday, August 18, 2010

George Osborne defends draconian measures to slash budget deficit.

George Osborne appears to have realised that his budget has caused a collapse in confidence in the UK market, so he has decided to abandon the austerity gloom and doom talk which has defined his time as Chancellor and has, instead, decided to tell us that things are looking up and that there really is no alternative to the path that he has chosen.

Alistair Darling, the shadow chancellor, has said Osborne's spending plans risk plunging the economy into a double-dip recession, but the chancellor today poured scorn on Labour's strategy for reducing the deficit.

"There seem to be two types of opponent to the budget," Osborne said. "There are those who deny that any action was necessary. That we could wait years even before setting out plans to reduce the deficit.

"There is a second group of people who opposed the budget. It is those who accept in principle that we must reduce the deficit, but then in practice oppose every cut that is suggested to achieve it."

It's a classic Straw-man defence. Firstly, there are no deficit deniers, the deficit is simply a fact of life and I know of no-one who thinks that no action was necessary. And yes, there are many who oppose his budget - myself amongst them - as proposals of cuts of between 25% and 40% in public services strike me as figures pulled from Osborne's ass. His budget is deeply regressive as it punishes the poorest members of society much more than the rest of us.

It's a budget that seeks to eliminate the deficit by increasing taxation by 23% and cutting spending by 77%. Under that formulation it is simply undeniable that the poorest members of society are going to pay the largest price.

Osborne insisted yesterday that his budget was "fair", as if him repeating that phrase would make it so. But there was a notable change in his tone, with him admitting that the recovery would be "choppy" whilst offering the present day version of the "green shoots of recovery" speech the Tories were always making towards the end of the Major administration.

The chancellor said the government wanted better value for money for public spending. "It is not about how much the government spends but about what the government does with the money. We want to be laying the foundations for economic growth and a fairer society."

TUC general secretary, Brendan Barber, said: "The chancellor has a different definition of fairness to the rest of us. His spending cuts are hitting the most vulnerable, his one big tax rise was VAT – the unfairest tax of all – and his economic policies are bearing down on the young, trapped between unemployment and an education sector with not enough places."

Darling said: "There's nothing 'pro-growth' about taking a huge gamble with the recovery – with people's jobs. And there's nothing 'fair' or 'progressive' about George Osborne's budget hitting the poorest in our society hardest. He doesn't seem to understand that in government it's decisions, not warm words, that count."

Osborne might talk about fairness and being progressive, but him uttering those words won't make it so.

And the collapse in support for the Liberal Democrats, with a mere 8% of the public now saying that they would vote for them, is a further indication that progressives are not in agreement with where this coalition is going.

The results of the survey bring bad news for Nick Clegg who has seen support for his party rapidly decline.

More than half of his own supporters believe the decision to join a coalition with the Conservatives has been a bad thing for the party and more than 40% of Lib Dem voters said they do not plan to vote for them again as a result.

Osborne can talk of fairness all he likes, but progressives know what fairness looks like and we know that this isn't it. This is making the poor pay for the mistakes of the banking sector and I can't think of anything more unfair than that.

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