Osborne talks Budget 2010

by Alister POOLE on June 25, 2010

As the details of the UK Budget 2010 were announced, George Osborne has been quick to defend the coalition government’s decisions.

The chancellor explained the need for the rise in VAT and the reasons for the cuts in spending in a series of interviews on Wednesday. Calling the move necessary in order to revive the UK economy, Mr Osborne said that spending cuts could still be reduced so long as the government could seek additionally savings from the welfare budget.

Labour’s Alistair Darling criticised the Budget saying that it would make circumstances dire for many. He also added that the coalition government could experience difficulties trying to implement the scheme.

Mr Osborne has been adamant about the government’s decisions, however, saying that the Budget is tough but also fair. However, the cuts will leave most UK households £400 worse off each year. David Cameron is expected to weather scrutiny at the weekly prime minister’s questions.

Mr Osborne said that the two-year freeze on public sector pay will be upheld but only for those public sector employees making over £21,000. A substantial cap on child, housing and tax benefits will be implemented for those making more than £40,000. VAT will rise next January from 17.5% to 20% as well. Personal income tax credits will be increased, however, by around £1,000.

During Wednesday’s interviews, Mr Osborne said that if the government had stuck to Labour’s plans, the UK would be facing a serious financial crisis. On average government departments will be facing a decrease in funding by about 25 per cent.

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