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Posted on: Tuesday, June 22nd, 2010



Emergency Budget 2010: What do you think?

Crown copyright. From the PM's Office Flickr Stream - http://www.flickr.com/photos/number10gov/4724397422/

Chancellor George Osborne today laid out the government’s Emergency Budget 2010.

The overall aim: to slash Britain’s debts from a record £149bn today to a mere £20bn by 2015.

How does the government plan to get there?  In extreme brief, you can look forward to:

  • Big cuts in government spending (77% of the reduction). The plan will  slash the budgets of many government departments, apart from NHS and overseas aid, up to 25%. The whos and whats will come out in October’s spending plan – but drastic changes clearly are in store.
  • Tax increases (23% of the reduction).  Yup. We heard it was coming – and it’s true. Among other changes, VAT will rise from 17.5% to 20% as of 4 January 2011.

You can read more on the budget straight from the horse’s mouth on Directgov. And of course there’s plenty of briefer summary and analysis on sites like the Guardian, Telegraph and FT.

But what’s clear right now is that this budget will impact us all in some way. The question is how… and it’s one we want to turn over to you.

  • How do you think the Emergency Budget will impact your own personal income and future spending?
  • Are you rethinking your household budget – and what you plan to give to charity?
  • And if you work for a charity, are you facing substantial changes to your budget and/or fundraising needs?

Post your thoughts on these, and on the budget more generally, as comments below.

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  • http://identity.davidwhitney.co.uk/ David Whitney

    The emergency budget looks like it'll reasonably good as a stimulus for small business (despite some very poor decisions regarding the video game industry which will send companies like Rockstar to Canada “full time”).

    It is clear, however, that the Lib dems have effectively sold out their reputation with this budget considering it effectively follows through on the “Tory tax bomb” that they were previously warning about.

    More so, using VAT as the main source of revenue effectively hits the poor hardest (as it's been correctly observed that “The richest 10% pay one in every 25 pounds of their income in VAT; the poorest 10% pay one in every seven pounds as VAT” (source: http://www.nextleft.org/2010/05/how-regressive-…)) effectively undermining the efforts to “remove the poorest from tax”. Effectively, the poor are helped out of the shallow income tax pool then thrown into the deeper VAT trap. If I recall, the raising of the minimum tax threshold was claimed, during the budget, to effectively save the average low wage worker ~150 a year (from memory) which raise in VAT is estimated to cost the individual ~400 over a year.

    Not exactly a progressive tax exercise.

    That said, things were always going to be hard, and I suspect some of the cuts to the entirely broken benefits and welfare budgets are long overdue and should hopefully reduce some of the abuses.

  • Pingback: Charity press coverage on the emergency budget « JustGiving blog

  • Scullyuk06

    It was always obvious when labour dropped the vat to 15% that it would have to go back up, and at some point whatever government was in charge would have to rise the rate to 20% to recover. Get this in perspective people – Something that cost £100 at 17.5% will now cost £102.13 a whole £2.13 more. If you can afford something at £100 in the first place then £2.13 is nothing. Lower the starting figure and you are lowering the difference. 20% sounds huge, but the increase is only 2.5%. They are not trying to raise taxes to be mean – they are trying to save us money for the interest on the debt the country is in. The quicker we take the hit – the quicker we get the debt down and start the recovery – not throwing money away on the deficit. I agree its tough – but that is what labour left them to deal with.