Cuts, cuts and more cuts…

There’s been a lot of talk about money over the last week. Last Wednesday George Osborne, the chancellor, laid out the government’s tax and spending plans in the last big budget announcement before next year’s elections.

We’ve already seen £35bn of spending cuts – but £55bn more are coming. And the government still hasn’t outlined everything they plan to cut.

38 Degrees members have been talking about the government’s plans on social media. James Meadway, an economist from the New Economics Foundation (nef), has been helping us make sense of it all. [1]

The discussion is still going on. Just click ‘like’ on the Facebook page to join in, or leave a comment below if you’re not on Facebook:
https://secure.38degrees.org.uk/facebook

 

Here’s some of what we’ve have been talking about together since Wednesday:

  • Anger that the welfare state is facing huge cuts when the rich carry on getting richer
  • Concern that the government is trying to destroy public services so that private companies can buy them up on the cheap
  • Unease that the ‘have nots’ – the sick, disabled and the vulnerable – will suffer the most from cuts to welfare, while the rich will profit
  • The problem of closing tax loopholes and stop tax dodging
  • The need for a green economy

Tax
On Wednesday Osborne announced a 25% tax on companies like Google and Amazon when they move profits abroad to avoid paying tax in the UK. But Lucy on Facebook wanted to know: “will the announcement about the 25% tax on profits for multinationals really stop big companies like Google tax dodging?”

Among suggestions from members like introducing a “Land Value Tax” or a corporation tax, James from nef made the point that Osborne’s tax announcement was “unlikely to be effective as a single measure – tax avoidance is effectively a systemic problem, so unless you address a range of issues at once (including closing tax havens), it’s not clear you’ll get too far on it.”

Welfare and the deficit
Steve asked “Why are the poor and disabled being punished by benefit cuts (leading to suicides and deaths in some cases), yet no bankers have been punished for gambling away billions?” And Ruth wanted to know “Given that the deficit has fallen much more slowly than expected, how realistic is it to expect a surplus in five years time?”

James made the point that “official forecasts from the Office for Budget Responsibility for this depend on continued high (if lower rate) growth, a big rise in tax revenues, and low interest payments. OBR forecasts don’t have a good record – they are the people who originally thought the deficit now would be £40bn rather than £91bn.”

A greener economy
Other members voiced concern about the lack of a vision for a green economy. Gareth and Margaret asked “How do we motivate government to switch their subsidies (our taxes) to renewables from fossils?” and commented that “No investment is being made in the future of the UK or indeed the Planet.”

There is a feeling from many members on Facebook that austerity measures don’t work and are unfair, and a concern that announcements on stopping tax dodging won’t be effective. So what do you think?

The discussion is still happening – why not visit the 38 Degrees Facebook page to get involved?
https://secure.38degrees.org.uk/facebook

And if you’re not on Facebook, just leave a comment below.

NOTES
[1] New Economics Foundation: James Meadway:
http://www.neweconomics.org/people/entry/james-meadway