Nick Clegg and Simon Hughes on the Budget

Nick Clegg’s email to party members and supporters reads:

Yesterday I wrote to you about why we have to take difficult decisions to tackle the deficit and lay the foundations of a fairer society. These are not decisions that any government wants to take but we have no choice except to clear up the financial mess that Labour left us. Today’s Budget takes these difficult decisions in an honest and fair way and with the clear stamp of Liberal Democrat values running through it.

In the past, efforts to tackle a big deficit have always hit the poorest the most. The coalition has ensured that – for the first time – this will not happen. The richest will pay the most, while pensioners and children will be protected.

Look through the Budget and you will see key policies we campaigned for being put into effect.

  • The £1,000 increase in the Income Tax allowance will mean that 880,000 low paid workers will be freed from Income Tax altogether. This is the first step towards delivering our manifesto commitment to ensure no-one pays tax on the first £10,000 they earn.
  • The Budget puts in place our promise of a new tax on banks, ensuring that they help to pay to clear up the mess left by the financial crisis.
  • Top earners will pay a full 10% more in Capital Gains Tax than under Labour, with no loopholes or tapers or get-out clauses. That change helps ensure those with the broadest shoulders take the greatest strain.
  • We will guarantee that pensioners get a fair deal, putting into effect the Liberal Democrat manifesto commitment for a “triple lock”, so state pensions rise every year in line with earnings, inflation, or by 2.5%, whichever is the highest. Never again will pensioners be allowed to fall behind.
  • The Coalition Government will not let regions, towns or cities that depend heavily on the public sector be forgotten. That’s why this Budget establishes a regional growth fund to ensure those parts of the country get meaningful support to help create jobs and opportunities for all.
  • Tackling Child Poverty remains at the heart of the government’s approach. So while we have decided to cut child tax credits for those who can most afford it, we have increased tax credits for the poorest families and put up to £ 2 billion into child tax credits to help ensure children of all backgrounds get a fair start in life.
  • These measures will ensure that the burden of deficit reduction is shared fairly across society.

    This Government is being honest with people about the road ahead. Together, we can make it through these difficult times and restore health to our economy and to the public finances. These difficult choices are the foundation stones for the fairer Britain we will build over the next five years.

    Deputy Leader Simon Hughes has also issued the following comments:

    Today’s budget clearly reflects many of the tax priorities which won nearly seven million votes for Liberal Democrat candidates across the country only seven weeks ago

    As a result of this budget millions of pensioners and others on low incomes will be helped and people with greater wealth will contribute most.

    Of course today’s budget is a coalition budget requiring compromise on both sides, but the country can clearly see today that in government Liberal Democrats already have a major influence on UK economic policy. From now on, Britain will clearly be a fairer place.

    Liberal Democrats made the correct judgement last month to choose to be influential partners in a majority coalition government rather than marginalised opponents of a minority government entirely implementing Conservative policies

    Liberal Democrats will make sure that the spending reductions to come also reflect Liberal Democrat priorities – and always protect the needy and vulnerable most.

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    74 Comments

    • I agree with Fran’s post. A big rise in VAT with a minimal rise in Capital Gains and a Corporate Tax cut are not progressive and it’s laughable to suggest it is. I agree that this budget is probably more progressive due to Lib Dem influence, and I also agree there has to be compromise. That said, I still think this budget is bad for Britain and our economy and that the party has given too much in too many key areas. For the first time, I’m very disappointed and almost angry with the coalition. What good is being in power if we are going to compromise our principles so completely?

    • Paul McKeown 22nd Jun '10 - 5:55pm

      I got an email from 38degrees asking me to donate money, basically to campaign against this budget. Have they gone Labour? I have unsubscribed, in any case, with a note stating that I felt that that email verged on the party political.

    • “Clear up the financial mess that Labour left us” – were they in power in Ireland, Greece, Germany, Spain, Portugal, USA etc. etc. too then? It’s a real shame hearing Nick Clegg of all people resort to this ya boo politics of a most disengenuous kind. It takes away from some of the pragmatic sense he speaks later. I thought that the almost collapse of free market capitalism brought us to this pass and lets not forget who wanted even more banking deregulation before the house of cards came tumbling down.
      Yes, the labour Government’s record could have been a hell of ot better to put it mildly, that’s why I have been voting LIb Dem for a very long time and in a good many elections past but I didn’t vote Lib Dem to let the pain of clearing up this mess fall disproportionally on the poorest sections of society both working and non working who will still be worse off even taking into account the new £10K threshold for Income Tax.
      Oh, and hearing talk about gold plated public sector pensions doesn’t go down great with those who have worked all their lives in the public sector and are now retiring on an average of £4 to 5K. The biggest part of my pension pot is in a private sector one but I’m not joining in scapegoating one section of society who didn’t cause the mess. We are all now going to be penalised for the sins of our politician masters and private sector bosses who took pension holidays, milked the pensions pots in times of fat and washed their hands in times of lean and the politicians in the LP who took a tax raid on them too. It isn’t fair to now set private workers against public workers and for Nick Clegg to be doing so too is frankly disappointing to say the least.

    • Terry Gilbert 22nd Jun '10 - 6:29pm

      The 20% VAT rise is both inflationary and ethically disgraceful. The poorest fifth of the population pay about 12% of disposable income in VAT while the richest fifth pay about 4%. This is a highly regressive way to repay the deficit. Either the millionaires at the top of our party have very little influence, or they just don’t care about the ‘fairness’ agenda.

    • Barry George 22nd Jun '10 - 6:46pm

      How can the leader of our party even try to attempt to justify this budget. I saw the pre-election posters. We all saw the pre-election posters. ‘VAT BOMBSHELL’ Indeed Nick ! You campaigned against it yet you have sold your soul to the devil in return for a cushy job. To claim the poor will be hit the least is laughable as other posters have already expressed better than me. Please remember you dont own the party. If you wish to see the liberal support collapse across this country then just carry on as u are, victimising the poor, the sick and now the disabled. My support is collapsing by the day.

    • Thanks to the Lib Dems the Tories have gotten away with regressive VAT rise, bombshell has well and truly landed. Considerable collateral damage. Never mind, this is a war on welfare scroungers after all.

    • Paul McKeown 22nd Jun '10 - 7:00pm

      @Terry Gilbert
      @Bernard

      I refer you yet again to http://www.hm-treasury.gov.uk/d/junebudget_annexa.pdf where chart A2 in part A.17 clearly illustrates that everyone earning in the bottom 8 deciles will pay less tax after this budget, even after the rise in indirect taxation is taken into consideration. The burden will be born by those in the top 2 deciles.

    • Barry George 22nd Jun '10 - 7:08pm

      @paul

      How can u defend a budget that directly contradicts what we campaigned for. Tory VAT bomshell was the policy we worked so hard against. Now you support it ? Are you a chameleon ?

    • Paul McKeown 22nd Jun '10 - 7:15pm

      @Barry George

      Just pragmatic. If the bottom 8 deciles – and the lowest 4 in particular – are rather better off after the budget than before, then I’m happy. I couldn’t get too hung up over the particular means, especially given the compromise nature of coalition government. In the end it is helping the ordinary person of limited means that counts. Ethics before party political manifesto pledges.

      I shall be watching to see what the results of the departmental budgetary cuts will be. If they adversely affect important front line services, then, of course, I will give Nick Clegg hellfire and brimstone. But so far, I’m happy with the direction of this government.

    • The labour government is not to blame for this, bankers and international capitalists are to blame, but are they paying? You have sold not just your soul, but your sense for the trinkets of power. This budget is economically illiterate as well as morally bankrupt. Well done.

    • Paul McKeown 22nd Jun '10 - 7:18pm

      @N Makhno

      I haven’t a clue what you are talking about.

      Are you saying that Labour is not in favour of reducing the burden of taxation on the lowest paid 8 deciles and helping 800 thousand of the poorest paid out of income tax altogether?

      Or are you just sore that Labour lost the general election on May 5, 2010?

    • Barry George 22nd Jun '10 - 7:24pm

      Sorry Paul, I thought ethics was keeping to the promises made in our manifesto… If we can’t even hold true to the policies we asked the people to vote for then we can hardly use ‘ethics’ as a defence. Please excuse me , I am angry with our misguided loyalty and evidence for that anger is mounting by the day. I intend no offence to your belief’s.

    • Richard Ian Hill 22nd Jun '10 - 7:26pm

      I like the VAT rise. I know when I was really poor very little went on VAT, food is VAT exempt and I did not buy much more. As most goods come from abroad they do not pay British tax at the production stage so by VATing them it stops us having to put more tax on British business helping to keep them more competitive. Even when I did buy something in that bracket, I would lookround and get a good deal and watch richer people pay ten to a ,say, a hundred times more hence paying proportionaly that much more VAT. I think some people need to grow up and realize that we need to balance the books. I agree with Nick.

    • Anthony Aloysius St 22nd Jun '10 - 7:48pm

      “I refer you yet again to http://www.hm-treasury.gov.uk/d/junebudget_annexa.pdf where chart A2 in part A.17 clearly illustrates that everyone earning in the bottom 8 deciles will pay less tax after this budget, even after the rise in indirect taxation is taken into consideration.”

      Sorry, but I don’t think you’re interpreting the chart correctly. As I read it, it’s showing a decrease in net income across all deciles, albeit a fairly small one (about 1.25% for the lowest decile, and about 2% for the highest).

    • anyone who thinks a rise in vat is progressive is delusional or disingenuous.

    • Foregone Conclusion 22nd Jun '10 - 10:10pm

      Anthony’s right, you’re misreading the chart Paul (it is a rather weird bastardized barchart, very informative if you know how to read it, totally misleading if you don’t!) The line shows the net change in income – it’s indicating that those who will lose least in percentage terms are those in the second decile, and that those who lose most in percentage terms are in the top decile. Those in the bottom, because they don’t benefit from our tax plans, will lose out more in percentage terms than any others except those in the top two deciles.

    • Richard Ian Hill 22nd Jun '10 - 10:17pm

      I am speaking from experience, give me reality over charts any day. I suppose when people tell you they are looking for work and are suffering so bad on the dole you believe them all. Me, I never had such a good time before or since, but if asked I would have sworn on anything wanted that I was in yhe worst state ever. The only reason I stoped was I felt I should pay my way, guilt got the better of me.

    • The ironic thing is if Labour had won the election we’d have a very similar budget and all the same people would be on here complaining about how evil and regressive Labour was and that they’d never vote for them again. They’d probably be pledging their future support to us, completely ignoring the fact that the cuts were in our manifesto too. People see what they want to see, especially in politics…

      Sadly there are some in our party who seem to prefer the simplicity of perpetual opposition. Unfortunately opposition doesn’t achieve anything, especially for those who most need help. Even if we were governing alone we’d inevitably have to make some compromises. Even more so as the smaller party in a coalition. 

      In case it escaped anyone’s attention, we didn’t win the election! We don’t have a mandate to implement our manifesto for goodness sake. This is still a democracy.

      Is abandoning the vulnerable to a majority Tory government placating its right wing really a price worth paying just to be able to say “ooh look how pure and progressive we are”?

    • It’s protecting defence that’s the principal nonsense, when so many other budgets are facing catastrophic cutbacks of 25% or more. So much money is wasted “defending” us against nothing in far flung parts of the world in which we have little real interest.

    • Barry George 22nd Jun '10 - 10:37pm

      HB

      I am against the princible of dishonesty. What is the purpose of elections if the general public are misled with regard to the true policies of those whom seek power. Some of us walked the streets asking the populus to vote for us and not for the Conservative VAT bombshell for example. My party has made itself and by association me, a liar. So yes , if you fail to inform the public what you would do in the case of no single party making it past the winning post then you have sacrificed honesty in return for power. Not one person in this country voted for the policies we are now seeing. There was no tory/LibDem manifesto presented to the people before the election. Democracy ? I think not…

    • @Rosalind – the Lib Dem fiscal policy alone would have increased net incomes for the lowest income decile by about 0.75%, the Tory policy alone would have reduced their income by 1.5%, if they’d won Labour wouldn’t have had a budget at all. So the effect of the Lib Dem influence on the coalition is to have moved the loss of income for the poorest households from 1.5% to 1.25%. Can you put your hand on your heart and say that’s a good deal that Clegg and Alexander’s won for our poorest?

    • ROB SHEFFIELD 22nd Jun '10 - 11:03pm

      “The ironic thing is if Labour had won the election we’d have a very similar budget and all the same people would be on here complaining about how evil and regressive Labour was”

      This is 40 billion per year over 4 years more than Labour was planning: it is 25% departmental cuts rather than 15%.over 4 years. It is a ‘sound money’ no deficit by 2015 budget rather than a ‘sound policy’ halve the budget by 2015 (and maintain the public services and the aggregate demand stimulus) that Labour were planning.

      This is not about being fiscally sensible. It is a ‘small state’ ideological neo-thatcherite budget (based on fallacies like the ‘crowding out’ thesis regurgitated from the 1970’s): it is thus a budget that the ‘young scribblers’ who were members of the Mandela hating FCS at Uni in the 1980’s have been dreaming of for 20 years. It is the return of Thatcherism almost 20 years after that creed was decapitated by an earlier generation of Conservative MP. And Clegg- as a 19th Century Manchester liberal- is 100% signed up to it (even if many of your MP’s and Richard Grayson are not).

      This is a massive gamble with the economy and people’s lives. I hope it works. But I suspect it won’t and myself and many people I know will pay the price.

    • Barry George 22nd Jun '10 - 11:14pm

      @ rosalind

      I am not aware of anyone here who fails to understand what a coalition is. Your assumption is itself a non sequiter…. Please dont be pedantic.

    • I am not happy with the Lib Dems…I did NOT vote for a coalition. I voted for the policies in their manifesto. I have been lied to and I can NEVER trust them again. If a party cannot stick to their core principles then what is the point of them. Even more indefensible is seeing the likes of Danny Alexander etc defending this budget and forgetting the fact the Lib Dems asked us to VOTE FOR THEM to avoid tax rises such as the VAT. As least be honest and give us the real reason rather than hide behind the Tory rhetoric! Harriet Harmon may have had a point, how much of your soul are you willing to sell to sit in those ministerial cars. I am truly sickened!

    • The budget could have been worse, it is the smugness and the smarminess of Alexander/Clegg nodding along like a pair of bobble heads which really irked me, they didn’t seem the slightest bit concerned at the harsh measures.

    • @ Huw Dawson. Whether or not the budget was bettered or worsened by Lib Dem presence is beside the point. The fact remains Lib Dem have fundamentally lied. When Danny Alexander was questioned by Paxman on newsnight about the Lib Dem U turn on VAT, he spouted out vile Tory justification. If a coalition means you need to compromise, but yet have your own opinions , then lets hear the opinions and tell us you feel the VAT hike is wrong, but you agree to it in order to get some of own policies in, but do NOT tell us all the Tory rubbish as justification and treat us like idiots.

    • Barry George 23rd Jun '10 - 12:23am

      why are comments being deleted ? Are we loosing democracy on this site as well as in our country ?

    • David Morton 23rd Jun '10 - 1:12am

      What was the thinking behind the timing of the VAT rise. If the figures ar so dire then bringing it in immeadiately would have raised another Billion a month. If it can be delayed then why not announce it next year for after the May elections. Why introduce it at such an odd time in the electoral cycle? Or as Mrs Merton might put it ” Mr Osborne, what first attracted you to a VAT rise the Lib Dems campaigned against just before an AV referendum ?

    • Low paid workers and people on benefits are the greatest net losers, the least able to pay and the least likely to have benefited from bailing out the banks (I know people with a half million pound savings rescued by GB). This is an unfair budget and your party is tainted. There was no mandate for VAT increases from either Tory or Lib Dem – it should not have happened – whatever the necessity to form a coalition. You have sold millions of jobs for 22.

    • Following the earlier link, the VAT chart is A4 (not A2), which shows that the poor lose less from the changes in indirect taxes than any other group, as a % of income.

      The overall effects are in A2, which shows that the range is 0.7% worse off (2nd poorest decile), to 2.1% worse off (richest decile). The poorest decile are worse off, but the poorest decile includes a surprising number of people who have no income, but high expenditure rates. Thus, if a rich person retires early and draws down savings, they are in the bottom decile for income (they have none), but they are not in the poorest decile in any meaningful sense. Hence the bottom decile often behaves “oddly” because it is a composite group.

      Overall, the extent to which the budget is regressive or not regressive is probably about as good as could be hoped for, particularly since we are in coalition whose manifesto said that getting rid of inheritance tax was their #1 tax priority!

      Where I think it is easier to make a case against the budget is on the macro conditions – are we really Greece? Are we sure the recovery is secure (see Wolf’s recent columns in the FT), and on the yet to be announced spending cuts for public services. 25% off education is a lot, for example, with only say 7% being accounted for by pay freezes. How big will my classes be the year after next? In universities presumably we are looking at big cuts in student numbers (which saves a bit less than you might think, in that buildings are already there, etc), big falls in teaching quality, or big rises in fees. Perhaps a student referendum on whether they prefer higher fees or bigger classes and lower grades?

    • @Jamie

      As long as you are not suggesting that Labour or one of the various single issue parties represents progressive politics? Because that would of course be laughable.

      Everybody hurts in this budget. The poorest hurt proportionally less than the richest. We await the spending review with great interest (and some trepidation) but for the moment I have no complaints about this budget at all given the backdrop against which it was presented.

      The overall ethos is something all Liberals should welcome. A smaller role for the state, a greater role for private enterprise. Less people caught up in income tax, a simplification of the Tax system, a fair and measured incentive for long term unemployed to return to work. (note that it is the poorest working section of society that does “best” in this budget, not the poorest, full stop). Are there things I would change? Unquestionably yes, but this is a budget that broadly speaking gets it right.

    • Richard Ian Hill 23rd Jun '10 - 8:15am

      Yes, I thought Liberal was about a smaller, less interfering, but fair goverment. A lot of what I read seems to me to be that a lot of disgrunteled Labour types trying to take over the party because they can’t get their own way in that party.

    • Anthony Aloysius St 23rd Jun '10 - 8:56am

      “Following the earlier link, the VAT chart is A4 (not A2), which shows that the poor lose less from the changes in indirect taxes than any other group, as a % of income.”

      Actually, both A2 and A4 are showing the effects of indirect taxes. The difference is in the way that households are grouped. In A2 they are grouped by net income; in A4 by expenditure. The argument being that, as you say, there are people with very low income living off savings in that bottom decile.

      It would be interesting to see the overall effects grouped by expenditure, rather than just the effects of indirect taxation. I assume the benefits for the bottom decile from direct tax/tax credits would be also greater than for the bottom decile grouped by income, which might even result in a net surplus.

    • What struck me as pure cheek yesterday was Harriet Harman lecturing us on what Lib Dem values should be !

      This from the New Labour party, that is now trying to pass itself off as the friend of the poor, When it has been ‘totally relaxed about people getting stinking rich’, while abolishing the 10p tax band.

    • I have voted lib-dem all of my adult life since the mid 1980s, I used to think as this Party as MY Party
      but after buddying up to the Tories and this sell out budget

      I WILL NEVER VOTE LIBERAL DEMOCRAT AGAIN

      GOODBYE

      BTW, I’m not the only one in my peer group to think the same, in fact I do not know anyone who thinks differently so enjoy this short period in the political limelight it probably won’t happen again for another lifetime, I just hope you think it was worth ditching YOUR principles for Nick Clegg’s 15 mins of fame.

    • Richard Ian Hill 23rd Jun '10 - 11:19am

      Nige
      Well that’s it. It is a political party whose direction is decided democraticaly by all the members. It does not belong to any one person. We voted in Nick and now it’s our role to support him. We will have plenty of future votes and plenty of time to put forward our different views. Being in oppisition is easy, one can live in a dream world and just say lovely idealistic things. In goverment one has to deal with reality and often take hard decisions. A lot of people I talked to while canvassing said they would not vote for us because they did not think we could take the hard decisions.

    • This is my first post after lurking on this site for about two months. I have enjoyed reading the articles and comments here (well most of the comments).

      I voted Liberal Democrat in the 2005 and 2010 general elections. I have also voted Conservative, Labour and Green in past elections.

      I believe in the principles of Liberalism and Liberal Democracy. I have on my bookshelves Why I am a Liberal Democrat’ to which many Liberal Democrats contributed, ‘Why Vote Liberal Democrat’ edited by Danny Alexander.

      I supported the Liberal Democrat as being a radical party of the Left committed to social justice as shown by their opposition to the authoritarianism of the Blair and Brown governments – to those governments’ attacks on civil liberties, to their inhuman policies towards refugees and aylum seekers, to the Iraq War.and to the increase in inequality over the last 13 years. For those and other reasons I could not vote Labour, although they did some good things in their 13 years in power. In my opinion the Liberal Democrats were more left wing than Labour. They were the radical and liberal conscience of British politics, and I hope will always be so.

      There are some things I fully support in the coalition agreement and the policies announced so far by the Conservative-Liberal Democrat government. Likewise there are some features of the budget that I fully support – the specifically Lib Dem features. But I completely oppose the rise in VAT, the freezing in child benefit for three years and other measures which hurt the poorest and those in need. If a Conservative government had introduced those measures in a budget the Liberal Democrats in the House of Commons would have opposed them. Also the forthcoming cut of an average of 25 percent in the budget of all government departments, except health and international development, which will hit front line services and hurt the poorest and neediest.

      I understand and sympathise with those former Liberal Democrat voters, supporters and members who feel betrayed by the party’s entry into coalition with the Tories and by the budget – by the Liberal Democrat’s betrayal of their principles. That is close to how I feel. Lib Dems must never forget that a number of Lib Dem MPs were elected by the votes of Labour supporters. For example Chris Huhne in Eastleigh. No doubt those voters are feeling betrayed.

      It seems to me that the Lib Dems are coming close to losing their independence from the Conservative party. That Lib Dem MPs and peers do not criticise and attack the Tories to the same extent that they attack Labour. I fear that the party (or much of it) will be sucked into the Conservative party like the Liberal Nationals/ National Liberals were in the 1930s and 1940s. So it is vital for the future of the party that there are Lib Dems who constructively oppose the coalition when it goes against Lib Dem values and principles.

    • Stuart Mitchell 23rd Jun '10 - 11:24am

      @Paul Mckeown: “If the bottom 8 deciles – and the lowest 4 in particular – are rather better off after the budget than before, then I’m happy.”

      You must be very unhappy then. The government’s own analysis shows that the budget will make ALL deciles WORSE off (see charts A1 and A2 in the budget document).

      Looking at the impact as a percentage of net income (as in chart A2), it is clear that the very bottom decile is being hit harder than all other deciles except the top two.

      Quite how you can look at those charts and conclude that the budget has made the poor “rather better off” is a deep mystery. How did you do it?

    • “Looking at the impact as a percentage of net income (as in chart A2), it is clear that the very bottom decile is being hit harder than all other deciles except the top two.”

      Because that very bottom decile are the permanently out of work, and thus don’t feel the benefit of the rise in personal allowance. At some point folks, we have to acknowledge the fact that there has to be an incentive for people to seek employment. The next decile up (the poorest workers) lose the least of everybody, and that is entirely as it should be.

    • Foregone Conclusion 23rd Jun '10 - 11:38am

      @Stuart Mitchell

      I think that was an honest mistake – the bar chart is a bit misleading, I think Paul just saw the positive bars and presumed that was the net figure. And the idea that ‘the poor’ = the bottom decile is a bit iffy as far as I’m concerned – the second and third deciles will have the least worst time of all economic groups in this Budget, and I would consider both of those ‘low incomes’.

    • Foregone Conclusion 23rd Jun '10 - 11:41am

      That said, I wish there had been more in the budget for the very poorest – some of those benefit cuts are probably going to have really awful consequences in a lot of individual cases.

    • Simon Williams 23rd Jun '10 - 11:51am

      There’s a lot of truth in the simple fact that this is not a Lib Dem budget. This is a Tory budget with some restraining measures put into it by our party. The alternative is that the Tories push through an even tougher budget as a minority government with no-one attempting to moderate the policies.

      Labour has no room to critique the Lib Dems here – it’s far, far easier to sit on the opposition benches and hope to win the next election as someone else takes the backlash for some innumerate economic policies which have led to supply side economic theory now in full control of the economy again. Yes the banks screwed us over, but there was no restraint to Labour’s bloat to the public sector, no value in the nanny state projects upon which so much money was lavished, no fiscal common sense when pumping government money into PFI and no darned common sense to ensure that government debt was kept under control in case of an economic crisis.

      Yes, huge parts of this budget stinks. Really stinks. Some of the policies here are ones which will cause misery to people who we really should be helping to shield from the impact of past policies and decisions which have borne such poisoned fruit. But the simple fact remains the Liberal Democrats cannot stop this and can at best hope to moderate the full zeal of Thatcher’s acolytes now they’re back in power.

      Labour sold out those who it pledged it to help years ago. This budget is the consequence. I may be angry over some of the measures in this budget and the timing of the cuts, but I’m absolutely furious with Labour for selling out the welfare state so completely with such morally bankrupt and short termist governance. I just pray that my party’s leadership can help to nudge the Tories away from the nastiest elements of some of these proposed ‘reforms’.

    • Philip,

      I don’t think that a significant number of Liberal Democrats will be sucked into the Conservative Party in the way you describe, but I do agree with you that the part of the Parliamentary Party that is not in government is doing far too little to distance the party from the Coalition’s more Tory-inspired actions. I realise that there is a risk of destabilising the Coalition, but we must never forget that the Liberal Democrats are a party of the centre-left and should be standing up for the poor and vulnerable, and the public sector, when these are under attack from the right.

    • Stuart Mitchell 23rd Jun '10 - 1:27pm

      Ryan M: “…that very bottom decile are the permanently out of work…”

      And the rest. There are plenty of working people in this country with a net income less than £14,200. Not to mention pensioners and people who can’t work.

      “The next decile up (the poorest workers) lose the least of everybody, and that is entirely as it should be.”

      In my opinion, the bottom two or three deciles shouldn’t be losing anything at all. But I’m just a soppy old socialist at heart.

    • We have a structural deficit of c.10% of GDP. This is because Labour allowed a massive asset bubble to pop up (location, location, location) while allowing consumer debt to get massively out of hand at the same time. On top of it all, they decided not to regulate the City, despite plenty of grumblings on how derivatives were ‘financial weapons of mass destruction’. We now run a bigger deficit than Greece. Remind me how Labour get off calling other parties unprogressive? And then there is Iraq, emprisoning kids in Yarls Wood, ID cards, DNA database,, extraordinary rendition….

      It’s kind of like blaming the doctor for the STD you got.

    • Barry George 23rd Jun '10 - 1:44pm

      Mark Pack

      Mea culpa. Yes that would explain the reason why comments went awol.

    • Stuart Mitchell 23rd Jun '10 - 2:05pm

      Foregone Conclusion: Point taken about the second and third deciles, though as I’ve just said above, I personally don’t see why the first couple of deciles ought to be suffering at all, especially as Labour didn’t do a great job of looking after them for the past few years.

      The budget is a perfect demonstration of how this coalition government works. The Lib Dems are allowed to enact (or partially enact) some of their progressive policies, e.g. the changes in direct taxation; but this is more than canceled out by the Tories introducing regressive policies of far greater significance, e.g. the increases in indirect taxation. The end result is that the Tories get pretty much what they want, but the Lib Dems at least have a couple of token “achievements” which they can offer to their supporters as evidence that they are having a positive influence on the government.

      Most here would call this compromise, but it seems to me no more than an exercise in smoke and mirrors. By boasting about “helping” the poor, the Lib Dems are giving the impression (as believed by Paul Mckeown) that they are making the poor better off, when in fact they have only managed to make the poor less worse off than they would have been under a solely Tory budget. Don’t get me wrong, that is still an achievement of sorts – but it isn’t anything like the one Nick Clegg crows about in his email to party members.

    • Stuart Mitchell 23rd Jun '10 - 2:33pm

      Quite apart from quibbles over which income decile comes out worst, the budget seems to me to be an absolute disaster for the reasons Vince Cable set out so convincingly BEFORE the election. It is an anti-growth budget.

      From my own personal perspective, I face a two year pay freeze, three year child benefit freeze, a VAT increase, and the loss of all my child tax credits, not to mention the NI increase Labour already had planned. This won’t be a huge disaster for me – in fact I’d have gladly taken an even bigger hit if it would have protected those bottom few deciles from getting worse off – but needless to say for the next couple of years at least I will be trying my hardest to spend as little money on non-essential goods and services as I possibly can. Many millions of others will be doing exactly the same.

      It seems to me that Osborne is taking a huge gamble with the recovery, probably because he recognises that the current situation offers a once-in-a-lifetime excuse to make a lot of ideologically motivated cuts that would have seemed unthinkable two or three years ago. The Lib Dems’ collective U-turn on the timing of the cuts represents a colossal gamble for them as well as Osborne.

    • I am at the bottom financially – the tories could not have done it without liberal democrat sell outs thanks very much – at the next election there will be no lib dem party in the main and the tories will not need them anyway

    • Andrea Gill 23rd Jun '10 - 3:11pm

      @Barry George: “I am not aware of anyone here who fails to understand what a coalition is. Your assumption is itself a non sequiter…. Please dont be pedantic.”

      Are you the same Barry George who earlier posted this? “Sorry Paul, I thought ethics was keeping to the promises made in our manifesto… If we can’t even hold true to the policies we asked the people to vote for then we can hardly use ‘ethics’ as a defence”

      Clear proof that you utterly fail to grasp that in a coalition, neither partner – let alone the very junior partner with 57 vs 307 seats – gets to implement all their manifesto pledges. Incidentally, “no rise in VAT” was NOT such a pledge, and personally I do feel it is not right for individual MPs to campaign and make pledges on issues that go against party policy – which in this case is not to exclude a rise in VAT – because if the party does get into government MPs who pledged against party policy are likely to end up breaching their pledges

    • Barry George 23rd Jun '10 - 7:12pm

      @Andrea

      Thank you for your comment. You highlight my accusation of a non sequiter yet somehow fall into the same logical trap as the poster you defend. Your supposition does not follow from your premise. There is evidence a plenty in this debate that I don’t agree with our coalition. There is no evidence that i fail to understand what a coalition is… You made that leap all on your own. Well done !

    • I think you need to look at some independent reviews of the budget, rather than limiting yourselves to the Treasury report.

      Try this which shows the combined effects of the last governments planned cuts and those announced yesterday.

      http://www.ifs.org.uk/budgets/budgetjune2010/browne.pdf

      Try this – Channel 4 fact check

      http://www.channel4.com/news/articles/politics/domestic_politics/factcheck+a+aposprogressiveapos+budget/3689437

    • Terry Gilbert 25th Jun '10 - 8:48pm

      It seems quite clear that the budget was very regressive, and for Liberal Democrat ministers to argue otherwise is flying in the face of reality. Of course it would have been even more regressive under a Tory only government, so its not as if this would be a dreadful admission to make. By being in there, we have done something to help the poor. But trying to pretend that black is white is unconvincing at best, and downright dishonest at worst.

    • Paul McKeown 25th Jun '10 - 9:23pm

      @Barry George

      Frankly reading your last post, I can only conclude that you’ve whitened your face and are wearing a red nose and a harlequin outfit. A coalition government is one in which pledges from both parties are promoted and some from both are dropped or diluted. A compromise is reached. Alas, for those with whitened faces, unless a government is actively pursuing Labour policies and none other, then it isn’t a coalition.

      Oy, what’s a matter you…

    • Barry George 26th Jun '10 - 1:34am

      @ paul …

      Ad hominem over substance eh ? ‘Poisoning the well’ is a fruitless endevour… It only serves to cement the view of those that already agree with you, Therefore it is a pointless debating technique. I find substance far more rewarding.

      For those that didn’t read my posts above, I repeat that I am a Liberal Democrat who fully understands what a coalition is and how it works.

      My perspective is simple to grasp. I believe we were wrong to prop up a minority Conservative Government , who for the record would not have been able to bring through an even worse budget without us as they failed to secure enough seats. So they would have had to compromise even more to a Liberal party that could help throw them out.

      I believe our position and policies would be better served fighting against these sickening policy judgements. For example the idea that uneployed people will lose 10 percent of their housing benefit if thay fail to get a job within 12 months are right wing draconian policies that now have a liberal stamp. The party will never recover from this unholy union. We have sold our soul and the devil is sticking our labels on his work. Tory lite, thats what we have become and at election time thats how we will be remembered. A progressive party voting for a regressive budget is shocking. We are attacking the poor the unemployed the sick and the disabled and it’s being done in our name… Your name…

      This was not a budget of necessity it was one of ideology and Nick bought into it.

    • I too think you were wrong to prop up a Tory government. Did anyone here see the wonderful montage of the door of Number 10 with a “Cleggflap” built into it that circulated just after the election wielded this extraordinary outcome? Sums up the lapdoginess of it all really. It is revolting even to see. And why, why, why, prop up Tories? Why not have refused to? Clegg is in it for the power-trip and everyone who votes knows it.

    • David Allen 27th Jun '10 - 1:12am

      Anybody who genuinely thinks this was a great Budget belongs in the Tory Party. Yes, I’m talking about you, David Owen’s successors. You know who you are. Don’t spend years messing up our centre-left party with your regurgitated Thatcherism, the way Owen did in the 1980s. Get out now, and take your places in this coalition from the Tory side.

      Anybody, on the other hand, who thinks that it is obvious we made the wrong choice after the election, needs to be reminded of the other choices that were on offer. There were only two. We could have tried to prop up Gordon Brown, for a few chaotic weeks, with Labour’s little group of dedicated LibDem haters competing with the Ulster parties to see who could make the most trouble as soon as possible. Or, we could have sat back and told the Tories to get on with governing as a minority. We would have then been ridiculed for our inability to work with anyone, and ridiculed once again when we could do nothing to influence Osborne’s regressive budget. Those were the alternatives. I do not argue that the course we chose was easily the best option. But there sure wasn’t an obviously better one around.

      Those of us Lib Dems – the majority I think – who are sceptical supporters of the coalition, now need to raise our game. Looking miserable, and then trying to put a brave face on things, is not going to serve us well over the next five years. We need to find issues of principle on which we can make a stand and show our clear independence from the Tories.

      For starters, what about Cameron’s appalling statement that he wants our soldiers dying in Afghanistan for five more years? Obama told his generals that they only had until 2011 to prove that a surge could work. They seem to have told him that a President does not call the shots. We should be supporting the US President against an over-mighty military-industrial complex, and demanding a negotiated peace settlement – which will mean better terms than the Vietnam-style capitulation that will otherwise be the eventual outcome.

    • Richard Ian Hill 27th Jun '10 - 10:50am

      @Dee Jones, no,but I bet it looked wonderful. A sign of how harmoniously Nick fitted ihto number ten. Showing that working together and comprimising is open to all.

      @ David Allen, No we think it was a difficult budget but we know who’s fault that was. That’s not very liberal “get out now”. I thought the liberal party was a rainbow of ideas and between us we democraticaly choose the ones we think will work the best. I think your in the minority but either way if you do not have people like me to test your ideas on, how will you hone them for the next manifesto.

      At least DC is giving a time when he would like them out, more than what I saw before. With a little bit of pressure ,who knows. Personally I think spending all that money over there is pointless and in the long run will have a reverse effect, creating more enemies. Far better to spend over here increasing our defences to minimis the chances of terrorist types gettgn through.

    • Richard Ian Hill 27th Jun '10 - 11:50pm

      @ Tony, That’s politics. Anyway things change very fast these days and what might seem best one week can be a load of rubish next week , fortunatly in the lib-dems we have MPs that can keep up.

    • Anthony Aloysius St 27th Jun '10 - 11:52pm

      “what might seem best one week can be a load of rubish next week”

      Obviously Nick Clegg is living proof of that!

    • Richard Ian Hill 27th Jun '10 - 11:54pm

      Oh Anthony you are so cynical

    • Richard Ian Hill 28th Jun '10 - 12:00am

      No, not me,. I am a realist. People can be pedantic about these things, but I still think we have the best team going.

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