Michael Meacher MP

The sheer nastiness of the Osborne budget takes some getting used to, but it repays closer analysis.   To feed the Government’s ideological obsession that not a penny more must be borrowed, the supposed growth projects (which appear very hazy and may take 10 years to come to fruition, if ever) are being funded by public sector pay cuts and benefit cuts.   These £1.2bn cuts via child tax and working credit and working tax credit savings will disproportionately hit the poor: the poorest fifth will have to stump up 32% of the savings and the richest fifth just 6%.   But what is so cruel, and insane, about this manoeuvre is that it is also pointless.   The deficit will be reduced by the cuts, but then grow again when the shrinking of income in the hands of the poorest families reduces demand and thence lowers government revenues. (more…)