Thursday 24 June 2010

Post Budget Blues

We have had many questions regarding the pay freeze announced in the budget on Tuesday.

The Group Secretary Bob Rowlings has made enquiries in MoD and has confirmed current understanding as being that existing pay agreements will be honoured.

Therefore our expectation is that the 2010 components of the three year pay deal set in 2008 will be implemented in August.

Meanwhile: Britain's leading experts on tax and spending have strongly challenged George Osborne's claims to have delivered a "tough but fair" budget, concluding that the measures in the emergency package would hit the poor harder than the rich.
The Institute for Fiscal Studies said the chancellor and Nick Clegg could only assert that the better off were the big losers from the austerity move by including reforms announced by Labour, such as the changes to pension contributions.

The thinktank gave its view as David Cameron came under Commons pressure to justify the insistence that the budget was fair, and as Osborne admitted he was looking for extra welfare savings to spare Whitehall departments, other than health and international development, from cuts averaging 25% during this parliament.

Noting that Britain was facing the "longest, deepest, sustained cuts in public spending since the second world war, Robert Chote, the IFS director, said: "Osborne and Clegg have been keen to describe yesterday's measures as progressive in the sense that the rich will feel more pain than the poor. That is a debatable claim. The budget looks less progressive – indeed somewhat regressive – when you take out the effect of measures that were inherited from the previous government, when you look further into the future than 2012-13, and when you include some other measures that the Treasury has chosen not to model."

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