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The Spending Review

October 22, 2010 8 comments

So this week we had the ConDem coalition’s spending review, their plan for pulling the UK out of the economic crisis, delivered by Chancellor George Osborne. For a start, I should say that I am no economist, which I’m sure will become abundantly clear, so I won’t try and go into detail on everything that was proposed, lest it be pulled apart by people far more clued-up than I. Instead, I will focus on a few points as I see them, my main bugbears. By all means, please correct me on points I may be ignorant on, though I should say I will be more appreciative of an objective view rather than any left or right wing rhetoric.

My first (and main) gripe is the change to child benefit. It was previously announced that it would be scrapped for anyone earning over £40k. No depth was given to this proposal initially, so I expected some to be provided during the spending review. It didn’t come. Just the same line, that anyone earning over £40k would have their child benefit scrapped. Nothing about household income, no plan to review it, just a one-line policy. There is a perfect example of who this is going to hit and how in my brother’s situation. Now, my brother is doing well for himself and he deserves to enjoy the fruits of his labour. He is ambitious and has the skills to meet those ambitions, however he has a toddler and another baby on the way and he works bloody hard to provide for his family. As it stands, with this change to benefits, he will have to sacrifice his aspirations in order to provide the best care he can. Why should he try and earn more when, if he does, he will be worse off without the benefits and, if he continued, the higher tax band? We are encouraging people to strive for mediocrity in order to survive, because of a policy which was written on the back of a fag packet. Honestly, it’s the kind of thing you would hear in a pub when the regulars put the world to rights, “‘Ere, Frank! ‘Ow would you sort the crisis out?” “Well I’d get rid of benefits for those earning over £40k!” “How would that work then?” “Uh… dunno” “Leave it to the politicians Frank, eh?”. Except this is what the politicians are coming up with!

My second gripe is the banks. They are the reason we are all in this mess and yet they are getting away scot-free. The world knows they are to blame (people may say there were other contributing factors but let’s be honest, these do not come close to those caused by the banks’ ineptitude), they make no real argument against it themselves but it won’t be them who cleans up the mess. Osborne stated during the review that they would come down hard on them but, as his disclaimer of not wanting them to up sticks and move from the UK suggests, it will be a token gesture if anything at all. As I said at the beginning, I’m probably being ignorant, but we should tax them and tax them hard. Tax all banks that were bailed out by the general public 50% of all recorded profits, after forensic accountants have been in to make sure what they are recording is correct. This, of course, will never happen. The government doesn’t want to scare them off. Forgive me for sounding naive, but surely we have international relations? Could other countries, who can also see that the banks are trying to get away with murder, refuse to accept them and force their hand? Of course, said countries would want the jobs it would create, but it would need those jobs because of the mess caused by the BANKS! Perhaps I’m hoping for some morals which have no place in a capitalist world. Instead, the government decides to slash public spending, sacrificing nearly half a million jobs and hoping the private sector picks up the pieces. So, in a nutshell, the banks cause the economic crisis and the government slashes public spending because it doesn’t want to drive away jobs in the banks which are needed to employ those coming from the public sector who find themselves in that position because we won’t punish the banks. Lunacy!

This leads on to my third and final gripe, a more specific one. The Vodafone tax bill. Now, as I understand it, Osbourne has written off a £6billion tax bill owed by Vodafone. One can only assume that this is because the government is scared of driving away jobs again. Either way, I fail to understand it. SIX BILLION! The country is on its knees and yet we can afford to write that off? It’s hardly pocket change. If you or I decided that we weren’t going to pay income tax for a few months, you think we’d get away with that? Not bloody likely. It’s punishing those trying to get us out of this mess, which wasn’t their fault to begin with, and rewarding those who are to blame.

This isn’t some kind of rant against the right wing by the way. Labour (although you could say they were right wing anyway, so maybe it is) played their part in this and they didn’t even offer anything constructive during the review. We had Alan Johnson, a man who has no clue how to be a Shadow Chancellor, skirting from one criticism to another, trying to pull apart the proposals without anything to give in return. I imagine Ed Miliband thought fresh eyes were needed, but now is not the time for it. When a country is in crisis it needs a plan, not someone learning the ropes. That being said, and as much as the Conservatives (let’s not continue with the idea that the Lib Dems have any kind of influence in affairs) bleat on about what they “inherited” from the previous government, punishing the people for their failures is not the way to go.

Once again, the public are going to shoulder the burden of responsibility for something not of their making. We’re going to pay, and we’re going to pay dearly.