25 May 2010

A Pound On A Packet Of Fags Would Sort The Deficit.

Chris Dillow points out that Osborne's cuts go against what the Tories election rhetoric promised. Here is my response to his post below.

Absolutely, these cuts are actually more regressive than I thought even the Tories at their worst would attempt - this is pure redistribution from poor to rich - the polar opposite of their social democratic rhetoric before the election - child trust funds and children's services abolished or slashed. With a choice between employee NI freeze or employers NI, the Tories revert to form in choosing the latter. There are no cuts to waste at all here, it is all front-line service cuts.

A pound on a packet of fags would sort the structural deficit of £40bn a year. I am not suggesting that smokers fund all the deficit gap, just give this as an example of how little tax increases would be needed if spread over a few areas. Instead, hundreds of thousands, perhaps millions are going to be put on the dole. How will this help the recovery?

£6bn of cuts may not be a lot on its own, but the public sector job losses will impact on the private sector as well and with the private sector not hiring, these unemployed could become another workless generation, just like the one created by the last Tory administration.

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