Not really. But now I've drawn you in with a catchy title, maybe you'd be so beautiful as to read my EPQ and give me feedback, because I literally cannot be arsed to do anything else tonight.
This is my first piece of informed political writing. Instead of spouting my usual left wing propaganda, I've decided to actually read the facts, and present them to you in the best way I can.
It's about 1000 words, so if you take the time to read this, thank you.
Assess the impact of the coalition Governments spending cuts on UK society and economy.
On the 20th October 2010, the newly appointed Chancellor of the Exchequer George Osborne laid out what he intends to be “Britain’s path to economic stability” in his coalition government’s comprehensive spending review he set out to cut excessive public spending whilst raising taxes, with the aim of reducing Great Britain’s current budget deficit of 64.5% of Gross Domestic Product (GDP) which was valued at £955.0 billion on the 10th of October. These cuts are viewed from the Chancellor as “necessary” whilst the shadow Chancellor Alan Johnson describes them as “draconian and born out of conservative ideology.” During this essay I will attempt to discover the true reasons to the government’s cuts in almost every walk of life, the impact it will have on the UK society, the impact it will have on the UK economy, and the roles of those involved in the CSR, from the masterminds to the frontline opposers, and everyone in between.
Contents of the Comprehensive Spending Review
The contents of George Osborne’s comprehensive spending review can be found on the HMRC website. However since it is 128 pages long, I shall attempt to condense it into as few lines as possible, whilst still explaining what shall be hit, where it shall be hit, and how hard it shall be hit.
- £81bn cut from public spending over four years
- 19% average departmental cuts - less than the 25% expected
- £7bn extra welfare cuts, including changes to incapacity, housing benefit and tax credits
- £3.5bn increase in public sector pension employee contributions
- Rise in state pension age brought forward
- 7% cut for local councils from April next year
- Permanent bank levy – George Osborne expects this to raise £2.5 billion a year
- Rail fares to rise 3% above inflation from 2012
- Police funding to be cut by 4%
- Retirement age to rise to 66 by the year 2020
- Up to half a million public sector jobs to be made redundant.
Source – BBC news.
Alan Johnson, the shadow chancellor of Ed Miliband’s new Labour party was quick to attack this proposal. He instantly noticed that the CSR was not backed by the any of the other nations of the UK. George Osborne stated that it was because of the mistakes of the previous labour government that caused the comprehensive spending review to be made. The average cuts in each department were 19%, which was –as stated previously- less than expected. However there are some anomalies in this budget, things that contradict typical conservative ideology. Such as the 14% cut with the Royal Family’s annual spending, with the conservative party generally being a large supporter of the monarchy. The hard hit to the middle classes with the scrapping of child benefits for those with a member of the family earning over £44,000 per annum. However this plan has been attacked due to its apparent unfairness, with families where both parents earn £40,000 a year will still be entitled to the child benefits, according to Osborne’s plans. Other sides of the spending review which contradicts conservative beliefs is the increase in foreign aid which will be distributed. This is increasing by 34% percent. This can also be seen as a differentiation from typical conservative beliefs, that in a time of financial prudency and “belt tightening” the conservative party will increase aid for a country other than ones in the United Kingdom. The donations will rise from £6.3 billion to £9.4 billion. This is able to counter Alan Johnsons claim that the CSR is done through conservative ideology, however further research shows that there is depth to his claims. Using the IFS (which is a body independent of the government used to assess the monetary implications of budgets, etc) it shows that the governments spending review will actually be extremely lenient on middle and upper class families. This is something which is a conservative belief. The protection of higher income families. The lenience on higher income earners inevitably that George Osborne’s “fairer budget for a fairer Britain” hits low income families the hardest. To show this, I shall use a graph created by James Browne, an economist for the IFS.
This shows that George Osborne’s plans to make “everyone tighten their belts together” is fundamentally true in and up to the years 2012/13. With the white line (which represents the reduction of disposable income) staying at a consistent level from IDG 2 all the way to 8. It also shows the previous labour governments plans to reduce the deficit by taxing the rich at a high extent. However this is a new government in charge, with different ideals. Therefore the taxes on the richest group were scrapped, in favour of a conservative viewpoint for tax and benefits, and after the first two years, the percentage decrease in benefit and taxes does not seem too severe.
However after the first two years of stability we are shown a rather startling figure…
What this shows is that the poorest families will lose the same amount (in £’s) income as people in grade 9 of the income decile group. The line in this graph shows that, as a percentage, the poorest stand to lose a significant portion of their income in comparison to the income of other pay groups. Notice the white line which continues to rise until you hit the richest people in the United Kingdom. This shows that the higher the grade of income you receive, the more leniencies will be shown on your tax and benefit measures by the years 2014/15
That's it for now. Thank you for being arsed to read your way through this. The next installment shall be written for next weeks blog.
CAW
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