Teaching Comparative Government and Politics

Monday, July 06, 2015

Austerity in the UK

The new government's budget looks for savings and tax cuts.

(Have we mentioned austerity often enough now, so that it's part of your comparative politics vocabulary? Not that it's likely to appear on an exam anytime in the near future.)

(And you do remember what the "shadow chancellor" is, don't you?) 

George Osborne: £12bn in welfare savings have been found
Chancellor George Osborne… will announce the bulk of the savings in his Budget on Wednesday, the BBC understands.

Those known so far include a reduction in the benefit cap and removing subsidies for social housing…

Mr Osborne said the welfare cuts were needed to prevent even deeper cuts to public services and to fulfill the government's aim of eliminating the deficit and running a surplus.

"So yes, we've got to find savings in welfare… "

The headline Budget announcement over the weekend was a clampdown on "taxpayer-funded subsidies" for "higher earners" living in social [public] housing in England. [Under the planned changes to housing subsidies, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say.]

But Mr Osborne also announced:

The benefits cap - the total amount a family can claim a year - will be cut to £23,000 in London (the BBC understands the cap will be £20,000 per household outside of London)…

The BBC needed to make a "contribution" towards the deficit, which, BBC News understands, will include the corporation having to cover the free licences [for people over age 75]…

Mr Osborne confirmed he would be seeking to make cuts to tax credits for people on low incomes, which had become a "very expensive" system, costing £30bn…

Shadow chancellor Chris Leslie said Labour backed the benefits cap but Mr Osborne should introduce tax breaks for employers that pay the "living wage", which is £9.15 an hour in London and £7.85 elsewhere, as a way of boosting people's incomes…

The SNP said Mr Osborne's Budget would be a "sermon from an austerity cult - cutting where it is not necessary and weakening further the chance of a sustained recovery"…

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