LibLink: Vince on the budget

Vince Cable writes in today’s Guardian with his thoughts on the emergency budget.

It should be no surprise that this is such a tough budget. Last summer, in pamphlets and speeches, Nick Clegg and I both prepared the ground for these difficult choices…

Now, to put it bluntly, Britain is much poorer than we thought we were two years ago but we have public spending levels that assume we are richer…

For me a key test of the budget is whether it is fair as well as tough. The budget is shot through with commitments my party fought for: a £1,000 rise in the income tax threshold; reforming capital gains tax in a progressive way; the levy on banks; the tilt towards low paid public sector workers over pay; commitments on child poverty; state pensions linked to earnings.

I have no doubt that the budget will be vilified by those who wish to undermine the coalition government or who do not understand the depths of the crisis into which our country has sunk. But it is necessary and right. If it wasn’t, I would return to a more comfortable existence opposing government and writing books.

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5 Comments

  • There is nothing fair about this budget. If we are so poor, then why are we fighting a war? Keeping oil prices high, are we? Better idea than windpower is it? Why are the banks and traders making bonuses? Nice to see the massive transfer of wealth continues in the direction towards those poor wee souls in the city.

    I expected better of you Dr Cable. Far better. How on earth you can sleep at night knowing where you spend your days sitting in that place is beyond me.

    From Stephanie Flanders on the BBC, “Yesterday’s Budget looks even more regressive when you consider the impact later in the Parliament, when the benefit changes have greater effect.” http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/06/ifs_reaction_to_the_budget.html

    Let’s hear a full and honest debate about increased worker insecurity and exactly who that benefits. And let us hear why any politician should be entitled to any kind of benefit rather than a short-term contract with no sick pay, no holiday pay and no pension. If greater insecurity benefits each of us, all of your colleagues will demonstrate to us all, surely?

    The more I sense this nonsense about the deserving poor and the non-deserving poor the more I sense Europe in the 1930s.

    While people earn massive bonuses, while people live in penthouses, we are not a poorer nation than we thought.

    There are a lot of us just as educated as you Dr Cable. We spent years studying because we didn’t want to be unemployed. For that, we earned our degrees as our analytical abilities developed because even us plebs can make it into the ancients and have done so for many years. Populations with increasing levels of education are harder to flannel. It is time to publish your evidence in a decent peer-reviewed journal. Let’s see if it stands the tests of science, or merely the greedy test of the vested interests lurking around some exclusive resorts.

    I have yet to see anyone offer a decent repute to Prof Krugman. If he is right…..

  • Vince, unfortunately the IFS have demonstrated that it is not fair at all. Stop the spin please. It isn’t what we need right now.

  • Roger Shade 25th Jun '10 - 5:59pm

    It is really very sad that Vince has to justify the unjustifiable. Of course if you are in a coalition you have to compromise but how far do you have to go. The budget offends my principles as a Lib Dem, I am sure it must offend Vince. I understand the principles of Cabinet Government as we see them in the UK but surely that cannot be the case now. Right from the start I was concerned that our principles would clash with Tory greed and selfishness, Hopefully we have some RED lines somewhere, we cannot go on compromising on issues so deeply offensive. Please Nick don’t wait for the unfulfilled promise of a Referendum on voting reform the damage may be too much for the Party to bear.

  • Andrea Gill 25th Jun '10 - 6:33pm

    I honestly do not understand all these outcries about “betrayal”. Out of the three main parties we were the most open and honest about the need to cut down in the public sector, including public sector pensions, I seem to recall Clegg calling for “savage cuts” last year, and unlike the other two main parties we had at least an attempt at costing our proposals in our manifesto.

    Yes, this is a coalition so there had to be compromise, and we could not implement our full programme which depending on circumstances may not have required any additional income such as from raising VAT, however none of the three main parties has been able to exclude that option.

    We are the only main party that made bringing the deficit under control such a core part of our manifesto, so I do not, frankly, understand why it now comes as such a surprise that we are actually going ahead with much of what we said we would – even if the pace and exact structure of these changes are not entirely to our own design [How could it, this isn’t a Lib Dem government].

    “We set out in this manifesto a clear plan to bring the budget back under control, being honest about the tough choices we need to take. We will cut taxes for millions of working people and pensioners, paid for by making
    sure that the very wealthy pay their fair share and that polluting air travel is properly taxed. We will boost the state pension by immediately restoring the link with earnings growth.”

  • Roger Shade 26th Jun '10 - 3:09pm

    Andrea, It is not a surprise we want to cut the deficit, it doesn”t even surprise me that we have agreed to start immediatey; Vince made it clear during the campaign that cutting should be dependent upon the economic circumstances, and it may be true that circumstances have changed. I don’t even object to the rise in VAT nor would I object to a significant change in the way Public Sector Pension are calculated. I do object to any reduction in Benefit Payments, which in Britain are amongst the lowest in the developed world. I don’t believe that benefit fraud is a massive problem I don’t believe the majority of people on Benefits are workshy or feckless and I don’t believe there are sufficient jobs out there to accomodate them. I do believe that many of the so called economically inactive individuals may never work in their adult lives unless the Government actually employs them.
    I do believe that those who have benefited most during Brown’s phoney boom should be the ones who pay the most. I don’t believe the ‘levy’ charged to Banks is anywhere enough, I don’t believe 28% is sufficient to adjust CGT’ to bring it closer to Income tax. We Liberal Democrats said we would vigoursly pursue Tax evasion we also campaigned on Mansion Tax. I know you are not in favour of a Mansion Tax because you believe it would affect people came into the £1.5 million bracket by mistake. I would say that anyone with an asset of £1.5 million is wealthy, if they are not cash rich they should do something about it, for example downsize as I have, or arrange an equity release package.

    Whilst saying all this I am not anti coalition merely commenting we do have to have RED LINES and indicating some of the areas where I believe our Party should stand and fight.

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