Belfast Telegraph

Friday 25 July 2014

Editor's Viewpoint: Tough budget cuts must be fair to all

After all the dire predictions about cut-backs, the day of reckoning will come tomorrow when Chancellor George Osborne unveils his emergency budget.

Some of the major announcements have already been leaked, and they may include hefty increases in non-business capital gains tax and VAT, as well as a one-year pay freeze for public sector workers earning more than £18,000 a year.

Other likely measures include a squeeze on benefits, with families on an income of more than £30,000 becoming ineligible for child tax credits.

These developments are likely to affect everyone, ranging from prudent savers and young parents, to people on welfare of various kinds.

A large rise in capital gains tax would penalise property owners and those relying on nest-egg investments, while higher VAT would increase the cost of living for millions of people.

The Chancellor and his colleagues face a difficult task. They need to make significant savings to help turn Britain away from what Mr Osborne terms "the road to ruin", but they also must resist the temptation to penalise the most vulnerable in society.

There is therefore a need to focus the cuts as accurately as possible, and also to curb unnecessary spending in certain areas of welfare and other sectors, where many have been systematically milking the system.

Whatever he does, Mr Osborne will be unpopular at a time when so many different sectors are claiming to be special cases, but if he is seen to be fair, the strong medicine may be slightly more palatable.

The Chancellor intends to set out a four-year plan of economic pain, so it is important for all of us that the impending sacrifices will not be in vain.

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