It’s official and  it’s a shocker. Cameron’s first Budget puts VAT up to 20%. It cuts company tax cut from 28 % to 24%. Govt dept spending is cut by a staggering 25%. Capital gains tax is up from 18% to 28%.

A budget suplus in 3 years? – dreaming.  The social dislocation will be too awful to describe.

This is an uber-Tory Budget that relies on neoliberal economic ideology.

Given that Brown had already cut spending by GBP 72bn and this cuts another GBP 40bn it contains real risks of stagflation/deflation. If that spreads through a Europe bound together by linked currencies, it could  contribute to a double- dip recession that mayaffect us.

And of course we are now more vulnerable after Mssrs Key anad English borrowed more for unaffordable tax cuts.

For now, here is David Milliband’s reaction:

The Tory-Lib Dem Budget is a hammer blow to families and business across the country – and to the future of the British economy. George Osborne’s measures are driven by ideology not economic reality. And the price will be paid in higher unemployment and lower living standards for the poorest and those on middle incomes.

When they asked for your vote at the last election, David Cameron and Nick Clegg said they would reduce the deficit without hitting the frontline or hurting the poorest – but they have already broken that promise.

…

Below I set out what I would do differently – read on and then sign up to my Broken Promises campaign – help me show David Cameron and Nick Clegg that we will expose and oppose their Broken Promises every step of the way.

1. I would make reducing unemployment a top priority. We must oppose the Tories’ decision to scrap Labour’s job guarantee, which provided work to the long term unemployed. The Tories are making the same mistake they made in the 1980s, of letting unemployment devastate lives and communities.
2. I would not increase VAT, which is a regressive tax that hits the poorest hardest. Don’t take my word for it, David Cameron said it. And the Lib Dems promised to fight against a VAT rise until they decided to support it.
3. We should be supporting the industries that will drive jobs and prosperity in the future – like Sheffield Forgemasters who have been robbed of a loan that offered world-beating jobs for Britain.
4. The Tories’ four pounds of spending cuts for every one pound of tax rises is extreme. Even Mrs Thatcher went for a pound of spending cuts for a pound of tax rises. I would strike a fairer balance between reductions in spending and tax rises to reduce the deficit. If we need more tax let’s look at measures like a Mansion Tax on £2m homes not VAT rises.”

Sound familiar?