The Tory Emergency Budget - June 24th 2010

Monday, 19 April 2010

“We will provide an emergency Budget within 50 days of taking office.”

p.7, Conservative Party manifesto

JUNE24 George Osborne wants to hold a budget on 24th June


But he won’t tell the British public what will be in it.

What is the real price of his economic plan? political tacticspolitical tactics


The Tories’ June Budget

Chapter 1: 2010 – £6bn out of the economy in 2010– Recovery at risk– Teachers and police cut– Families on modest incomes lose Child Trust Fund and Child Tax Credits

Chapter 2: 2011 Onwards– Implement pre-election tax cut giveaways

– Including inheritance tax and marriage allowance

– At last setting out the bill families will pay


2010Chapter One


✓GDP rose 0.4% in Q4 of last year ✓Total exports rose by £1.8 billion

(9.5%) to £21.3 billion in February, the fastest growth for 7 years ✓Unemployment stabilised since

October - over half a million lower than expected

We’re on the road to recovery


UNEMPLOYMENT1993 2010

BENEFITCLAIMAINTS

2,930,6001993

1,585,1002010

It’s very different from the 90s


REPOSSESSION1991 2009

PROPERTIESREPOSSESSED

75,5001991

46,0002009




BUSINESS INSOLVENCY1993 2009

INSOLVENTS PER CENT OFREGISTERED BUSINESSES

2.7%1993

0.9%2009

BUSINESS INSOLVENCY1993 2009

INSOLVENTS PER CENT OFREGISTERED BUSINESSES

2.7%1993

0.9%2009


But things are still fragile

“Although we are seeing so many encouraging signs of stronger activity, the fragility of recovery, a frail labour market and possible headwinds coming from financial

markets underscore the need for caution in the removal of policy support.”

OECD Chief Economist, Pier Carlo Padoan, 7 April 2010

"A hasty retrenchment would risk pitching the economy into a double dip.”

ITEM Club, 19 April 2010


A dangerous time for cuts

George Osborne, Channel 4 News Online, 1 April 2010

“I made it clear : £6 billion less."


15 April 2010

Lord Skidelsky Emeritus Professor of Political Economy, University of Warwick

Lord Layard Emeritus Professor of Economics,

LSE

Sir David HendryProfessor of Economics,

University of Oxford

Sir James MirrleesNobel Laureate & Professor of Political Economy,

University of Cambridge

Robert SolowNobel Laureate & Emeritus Institute Professor of Economics

MIT, USA

...and 74 other signatories


Instant job losses

“The projected £1bn-£2bn savings on the public sector payroll translates into “roughly 20,000 to 40,000 job losses” ...said Colin Talbot,

professor of public management at Manchester Business School.”

8 April 2010


FORE

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TORY CUTS2010

£

£1.78b £810m £670m £320m£330m£450m

Cuts would start with immediate effect


EDUCATIONTORY CUTS

FEWER TEACHERS

6,900PRIMARY & NURSERY

7,300SECONDARY

Tory cuts - schools’ share


POLICETORY CUTS

FEWER POLICE OFFICERS

Tory cuts - the police’s share


Tory family cuts

£CHILDTRUSTFUND

CHILDTAXCREDITS

cut cut


2011Chapter Two

O N W A R D S


2011 Onwards

“The forecast shows GDP growing by 2.7% next year and 3.4% in 2012, powered largely by exports and investment.”

ITEM Club, 19 April 2010

The ITEM Club broadly agrees with us that if we make the right decisions now we can secure strengthening

economic growth for the coming years:


2011 Onwards

"It's time for this Government to get serious, to put away their pathetic dividing lines, to put away their moral cowardice in

not dealing with this issue..."

David Cameron, Press Conference, 25 January 2010

David Cameron opposed the Government’s action to support the economy because he said that the deficit was his first priority.


Tory prioritiesDeficitRewarding marriageCiderNI contributionsInheritance tax

1.2.3.4.5.

"Debt is going to be the number one problem facing the British country."

David Cameron, BBC Radio 5, 24 April 2009


DeficitRewarding marriage

CiderNI contributionsInheritance tax

1.2.3.4.5.

Tory priorities

The Conservative leader confirmed that the £550 million package, which would make four million married couples £150 a year better off, was only a start. “I am sure over the course of a

Parliament we would be able to go further.”David Cameron, Press Association, 10 April 2009


Deficit

Rewarding marriageCider

NI contributionsInheritance tax

1.2.3.4.5.

Tory priorities

"I thought stopping the cider tax was going to be the absolute number one priority for the budget negotiations."

George Osborne, Western Morning News, 12 April 2010


Deficit

Rewarding marriageCiderNI contributions

Inheritance tax

1.2.3.4.5.

Tory priorities

“A tax on jobs in a recovery. That is my number one priority.”George Osborne, Sky News, 23 April 2009


Deficit

Rewarding marriageCiderNI contributionsInheritance tax

1.2.3.4.5.

Tory priorities

"If you look at what the Conservative Party has said we have not made pledge after pledge, we’ve made one pledge about inheritance tax."

David Cameron, BBC News, 4 January 2010


Osborne’s election tax giveawaysContinental holiday homes tax relief

Oppose cider duty increaseOppose broadband levy

Tax cut for married couplesFreeze council tax for 2 years

Inheritance tax cut

National insurance changes

£15m£15m

£175m

£550m

£6.7bn

Couples’ Working Tax Credit£1.5bn

£3.1bn

£1.4bn


...and there’s more

Dividend tax creditFuel duty cutCancer drugs

£???

£???

£???

£???Further cuts to corporation tax

£???

National citizens’ service


Freeze council tax

Tax cuts for married couples

Inheritance tax cut

Raise NIC thresholds

Oppose broadband levy

Oppose cider duty

Holiday home tax relief

-£700m-£550m

-£1,400m -£1,400m -£1,400m

2011/12 2012/13 2013/14 2014/15

-£550m -£550m -£550m-£1,500m

-£6,000m -£6,300m -£6,300m -£6,700m-£175m -£175m -£175m -£175m-£15m -£15m -£15m -£15m-£25m -£15m -£15m -£15m

-£7,465m -£8,455m -£8,455m -£13,455mAnnual cost

Total cost over Parliament £37,925m

2010/11

£0m£0m

£0m-£90m-£15m£10m

-£95m

£0m £0m £0m £0m

Couples’ tax credit £0m £0m £0m -£3,100m£0m

George Osborne’s £38bn election tax giveaways


INVOICE

Dear Householder,

Please pay £1,500

PSBigger bills coming"We will provide an emergency

Budget within 50 days of taking

office to set out a credible plan

for eliminating the bulk of the

structural current budget deficit

over a Parliament."P.7, Conservative Party manifesto

To stick to the existing deficit reduction plan the Tories would have to raise taxes or cut spending to compensate – hitting each household with a bill for £1,500

over the Parliament.


If you vote Tory in May, you’ll be stung in June


The Tory Emergency Budget - June 24th 2010

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Transcript of The Tory Emergency Budget - June 24th 2010