George, saint or sinner...

It's judgement day, and as the dust settles we get a proper chance to take in the facts and figures rolled out in yesterdays emergency budget.

Was it as tough as predicted? The short answer is yes, however the cautious consensus seems to be that it was harsh, but reasonably fair. The fly in the ointment on the fairness front was the VAT hike to 20% due in January 2011. As expected, there was a huge hit on public services, in pension reform and budget reductions of 25% in all departments except overseas aid and the NHS. The mooted capital gains tax rise to 40% was watered down to 28%, not out of compassion, but because that was the optimum return rate for the treasury before people choose to sit on their hands and their assets. There was a robust and targeted benefits shake-up as anticipated.

The £155bn deficit dragon will be with us for a long time to come, but George has made a decent first stab at it.

It may be a while before he's hailed as a Saint though...

The coalition budget...

There has been a lot said about this emergency budget, suggestions that it has been over-egged to blunt whatever nasty medicine George Osborne may be about to pour down our throats now seem unlikely, the truth is that in order to slash Britains £155bn deficit it has to be as tough as they promised it would.

The most controversial measure is likely to be a shake-up of the public sector pension pot, requiring more cash input from the recipient. This will initiate strikes. Hard on the heels of the pension review will be welfare cuts and almost certainly an end to child tax credits for the middle classes. We'll probably see an increase in VAT and capital gains tax, and holiday flights may attract a levy. On the flip side the income tax allowance will be raised from £6.475 to £7,475 taking a million people out of the income tax threshold and there will be a two year freeze on council tax.

I for one am stocking up on cling peaches in the Anderson shelter...