>The June Budget’s Orange Flavour

>So now we know 

We know that that VAT will go up to 20%, we know that the income tax threshold will be raised by £1000, and we know that most Government department budgets will be reduced by 25%. There will also be changes to the welfare and benefits system, a reduction in corporation tax, as well as a levy on banks.

As someone involved in youth politics I also noted with interest the sale of the student loans book. Labour has buried graduates under a mountain of debt, and it is critical that this sale does not lead to interest being charged on student loans.

Most of it is not that pretty, but neither is the economic mess left behind by 13 years of Labour.

What became increasingly apparent as George Osbourne’s, surprisingly well delivered, budget speech progressed, is just how much influence Liberal Democrats have in the Coalition and its economic policy. There is now a 77/23 split in spending cuts and tax rises, when the Conservatives wanted 80/20, a not inconsiderable shift. The increase in the Income Tax threshold, and the ultimate aim of it being £10,000, is down to the Liberal Democrats. While many in the party are uncomfortable about the increased VAT rate and a small Capital Gains Tax increase, we should be pleased with the distinctly orange flavour this budget had. 

As the Coalition was formed many in the Liberal Democrats expressed fears that the Liberal Democrat voice would be suppressed, that the party would lose its identity. As Mark Thompson points out in an excellent post on his Mark Reckons blog, political times have changed and compromise is essential on the Government benches. I am aware that Bob Russell MP, a man who I have had the pleasure both of meeting and eating his chocolate, is rumoured to be voting against the budget as he campaigned against some of the things in it. 
While not everything we all campaigned on can come to pass, a lot more of it can be put in place than if we were in an unstable, discredited coalition with Labour, or if we were still sitting on the opposition benches.  

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