LETTER: Are we heading for catastrophe with the budget?

George Osborne, in television appearances before his budget explained that it was necessary to reduce personal independence payments by up to £150 a week.

The Conservatives say they have to do this kind of thing to strengthen the economy enough to withstand another crash. Yet Mr Osborne told us just four months ago that the recovery was gathering pace. Now he’s telling us that the economy is smaller than he thought and we have to tighten our belts all over again.

Except it won’t be people on good salaries doing the belt-tightening. It will be people who the Conservatives themselves thought needed the personal independence payment in the first place - it was the Coalition Government that introduced it, partly in order to take the pressure off social services.

It is economically illiterate. I believe there is not a single front-rank economist who supports what the chancellor is doing.

On a national scale, my spending is your income. Your spending is my income.

That’s why cutting the incomes of those who spend pretty much their whole income on necessities is not going to improve the growth on which an economy built on debt depends.

Certainly, the Conservatives have not improved growth by cutting government expenditure so far, or reducing taxes on companies and millionaires.

They have actually increased VAT, a tax that falls heaviest on the poor, which slowed the recovery. Government borrowing, meanwhile, has gone up by half.

Without growth, ordinary people have to borrow more. Banks are now suffering too, with negative interest rates which deprive them of income. Trade and business profits are at rock bottom, while company stocks and shares enjoy fantasy-land valuations as rich executives borrow and speculate for free.
We are headed for an economic catastrophe, and the Conservatives are making the prospect worse. They will have nobody to blame but themselves.

Ian Wood

Derbyshire Green Party