Labour should have ruled out raising VAT altogether. That we didn’t was a huge mistake. That the ConDems have raised it is a bigger one.

VAT is a horribly unfair tax. Office of National Statistics stats show the richest 10% pay £1 in every £25 of their income in VAT; the poorest 10% pay £1 in every £7 as VAT. Those who can least afford it will be badly squeezed by this measure alone.

Unemployment is going up, and cutting 25% of each public service is only going to exacerbate this further. Not just because a possible 1 million of them could lose their jobs, but because the many businesses who trade with the public sector will also suffer. So this is a terrible time to actively reduce the funds available for those who can’t find work. But the CPI linking of benefits – as opposed to the more realistic RPI does just that.

I work in housing, and what I found most distasteful in the budget was the cut of 10% of Housing Benefit if people have been unemployed for a year. This combined with the destructive strategy being enacted bty Eric Pickles in the DCLG of telling councils that Regional Spatial Strategies have been abandoned without putting anything in their place (which has already led to at least 40 local authorities putting a moratorium on house building) means that we will have less and less affordable housing built every year. The differential in the Housing Benefit caps will also lead to a further abundance of single bedroom properties in the private sector with affordable properties for families becomes rarer than ever.

This was not a budget of necessity. Cuts to not need to be this severe or this unbalanced. When part 2 kicks in on the 20th October, and we see what the departmental cuts will entail, people will know this is not a case of cutting waste but cutting vital services.

Labour and the left believe that it is essential in our society that we provide for our weakest members. The Conservatives believe that in so doing we weaken our society. No one is really sure what the Lib Dems believe other that that they should be in the Cabinet no matter what. With this budget – more ideological that anything Thatcher ever passed – the Tories will have the chance to test their economic theories – and we will see the damage their trampling of the state will cause.

Tags: Budget, Condems, economics, housing, Labour values, ONS, Thatcher, unemployment, VAT

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