After many hints about how tough on spending this budget would be, it can only be described as a damp squib. Raising VAT to 20% is hardly the precursor to “an enterprise led recovery” acclaimed by the Chancellor. Still, we may be grateful that he slightly watered down the threatened rises in capital gains tax.
You can hardly say that the budget grasps the nettle when it comes to cutting our out of control public spending. So it is hard to see where the reduction in the deficit will come from. By protecting the NHS from cuts he has hamstrung himself; in my experience there are so many inefficiencies in the health service, I could write a book about it. He also announced there will be no reductions in capital spending; that is a luxury no private sector organisations can afford. Below is his list of cuts:
• A two year pay freeze in the public sector (except for those earning £21,000 or less)
• 25% cuts in budgets of departments other than Welfare, Defence and Education
• Child Tax Credits withdrawn from families earning over £40,000
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