George Osborne targets welfare as he warns of £25bn more cut

[frigidmagi]

BBC

A further £25bn spending cuts - much of it from the welfare budget - will be needed after the next election, Chancellor George Osborne has warned.

He said more austerity lay ahead, as the job was "not even half done".

He suggested making welfare savings by cutting housing benefit for under-25s and restricting council housing for those earning over £65,000 a year.

But Deputy Prime Minister Nick Clegg said targeting the working-age poor was "extreme... unrealistic and unfair".

The Lib Dem leader said he had a "very different vision" from the Conservatives about how to balance the books during the next Parliament and believed the wealthy should pay more in tax.

The £25bn figure is in line with the already announced intention to balance the government's books by 2018. It suggests cuts will continue at the same rate as during the current Parliament.

BBC political editor Nick Robinson said Mr Osborne's announcement was as much about politics as economics.

Mr Osborne, he said, "wants to to set the political baseline for the economic argument in the run up to the next general election", in the process setting a test for both the Lib Dems and Labour.

'Long way to go'
In his speech, Mr Osborne warned the welfare budget could not "be protected from further substantial cuts", saying he was beginning "not ending" a debate on the "difficult choices" that he believed had to be made.

Only by reducing welfare, he suggested, could a future government avoid either spending cuts in areas such as education, "big tax rises", or increased borrowing.

Mr Osborne has argued the savings needed after 2015 can be found entirely from spending cuts, with welfare accounting for about half of the £25bn targeted - the remainder coming from a further squeeze on departmental budgets.

Couple of thoughts: I saw this story on Spacebattles which has a English membership. If they're even within a mile of the baseline feeling... Boy George shouldn't go outside alone at night. In fact he may want to move after the election.

As to Nick Clegg... Hey! Hey Motherfucker! Did you take a fucking 2 year nap or something? Where the fuck have you been?

[LadyTevar]

AUSTERITY DOES NOT WORK Ya Wankers!!

[General Havoc]

AUSTERITY DOES NOT WORK Ya Wankers!!

It's nowhere near that simple, as I can cite you five or six examples where it arguably did work. Those posters on Space Battles better be prepared to do more than just whine to you, Frigid, if they want to hold these sorts of cuts off, because I've seen the same numbers Osborne is working off of, and the fundamental problem of not enough money to go around isn't just going to vanish. If they don't trim 25 billion off of welfare over there, they're going to have to trim it somewhere, or otherwise bankrupt the country through inflationary borrowing. Watch what interest rates do in Britain if they decide to make no cuts and tell me that Austerity was the worst possible solution.

I'm no fan of Austerity as a blanket policy, but I can cite you a couple of other things that "Don't work" either. One of them's 15% inflation rates. Another is slashing the Education budget in half. If you're going to write welfare cuts out of the package (remember, only half of the cuts they're discussing represent such things), then exactly what does that leave you with? Selling Wales to China?

[frigidmagi]

Why is raising taxes not a solution here? Because for their ficianical industry business is booming.

[General Havoc]

Raising taxes is absolutely a solution here, or rather an element of the solution, but like everything it is not a panacea either. Britain's tax rates are already pretty substantial, which is one of the reasons they experience so much capital flight. I'm not familiar with their Capital Gains rates though, so there may be room there.

To paraphrase an economic truism, when you have a major problem with your economy, everyone will weigh in telling you which lever (taxes, spending cuts, austerity, inflation) to pull. They're all fools. You don't pull one lever. You pull a little bit on many different levers. One of them in this case is probably Austerity. But not the only one.