Thursday, 17 January 2013

Budget, Revenue and Spending

The money raised by the government through taxation, assets and borrowing is its revenue, whereas the money paid out is known as government spending. We are currently experiencing widespread government spending cuts. Your generation could grow up with austerity the defining approach to government finance.
Every year the Chancellor of the Exchequer, second only to the Prime Minister in terms of seniority and authority within the government (and many would argue that Gordon Brown was more powerful as Tony Blair's Chancellor than when he became PM himself), sets out the government spending plans, including any changes to revenue-raising (taxes etc), in the Budget.
The Budget is the single most important economic and financial statement made each year by the Chancellor of the Exchequer to Parliament and the nation. The Budget Responsibility and National Audit Act 2011 require the Government to produce a Budget Report for each financial year. The Charter for Budget Responsibility sets out what the Budget Report must cover.  [source:]
Here's a short history of the Budget:

Every budget has winners and losers. In theory at least, Labour governments (at least before Tony Blair) would set budgets that reduced tax on the poor whilst increasing spending on the poor, using increased corporation (business) and wealth (income) tax to pay for this, while the Tories would cut public spending overall, especially welfare payments to the poor, and focus on reducing tax on the rich and business. The  2012 budget was extremely controversial: the so-called pasty tax (here's the BBC's take) seemed to penalise the poor while the richest saw their income tax cut from 50% to 45%.
After every budget the media quickly calculates who they think will the winners and losers, as do think tanks such as the IFS. The Guardian analyse the 2012 winners and losers from the autumn 2012 statement, which was heavy on welfare cuts, here.

This is a very simple task that you can achieve by quickly browsing the relevant Wikis, hyperlinked above, and looking for the different forms of taxation they list. You should be able to find at least 9. They don't list Council Tax as they focus on national taxation. Write or type these 9, + Council Tax.
The Wiki on public finance is full of useful facts, including the range of taxes the government uses to raise revenue. There is also a separate Wiki on taxation.


If you want to access the full graphic below, and not the accompanying article, click here.

You can read more on the Treasury site, including statistics on spending.
The Parliament.UK site is a more student-friendly site.
The EU also publishes its budget.
Scroll to the bottom for further links on the budget breakdown, such as this
There are many terms associated with budgets.
There are pressure groups which campaign to see the public debt reduced and spending cut, such as this one.
The Wiki on public finance is full of useful facts, including the range of taxes the government uses to raise revenue. There is also a separate Wiki on taxation.
This site shows you government spending as a pie chart.

See a gallery of images from this protest here.
Lets consider briefly one example of government cuts and the impact this can have. Welfare spending has been targeted for particularly large cuts by this government, which is in keeping with right-wing politics. You can view a video of C4 News covering the May 2011 protest march by the disabled against such cuts, arguing they were being victimised by these. In October 2012 the famous Paralympian Tanni Grey-Thompson took part in a C4 News debate with a government minister partially responsible for overseeing such cuts; again, you can view a video clip of this. More recently still (December 2012), C4 News reported the IFS (Institute for Fiscal Studies think tank) report that £27bn further cuts were yet to come (also a video).
You can read more on this story:
The Indie reports Tanni Grey-Thompson's claim that 500,000 disabled people would suffer from spending cuts.
The MS Society reported this research:
A report published today by The Hardest Hit coalition, of which the MS Society is a member, has revealed how Government changes to the welfare system will hit disabled people the hardest.
The pressure group Disabled People Against Cuts maintains a website.
The False Economy pressure agroup (against the cuts), carried this report:
The UK Disabled Community needs to send a clear and unequivocal message in one unified voice to call on the Coalition Government to see us all as equal members of society and not treat us as a tool to steal our disability benefits and services to bail out the Country in this time of Financial Crisis.
Can we set a precedence to get 1 million signatures so that the Coalition Government will have no option but to take note of us and not just ignore or deflect our arguments & comments and to stop building this climate of hate against disabled people.
Please leave a question for your Local MP to pose to the Coalition Government, which we will add to the Petition when we deliver it to No.10.
ITV carried this critical report.
The Guardian reported on the analysis of another think tank, Demos, that argued the government were demonising and scapegoating the disabled and that the cuts were disproportionately impacting the disabled. 2011 and 2012 budget breakdown
Click to see this breakdown, with sub-lists expanded for you
All three major parties currently back spending cuts, though Labour argue this should be done over a longer period of time to avoid damaging the economy, while the coalition government argue this has to be done as quickly as possible. (NB: currently UKIP poll higher than the Lib Dems, but also favour spending cuts)
Your task is to play a part in a government cabinet meeting in which spending cuts of between £10-£20bn will be agreed. The budgets of 4 major government departments will be up for review:
This interactive guide lets you click on bubbles for further detail
  • We will select a PM and a Chancellor, who will ultimately decide where the cuts will be made following presentations by secretaries of state and their junior ministers, plus civil servants. Two pressure groups will also have an opportunity to argue for/against (one for each) spending cuts generally.
  • The Secretary of State + their junior minister will research the vital work done by their department in an effort to convince the Chancellor and PM not to make any cuts from their budget.
  • The civil servants will be researching aspects of the budget which can be cut (they might argue to cut a % of funding for some parts of the budget, or simply to stop offering certain services altogether).
  • The pressure group against cuts will speak against any cuts, and argue why austerity measures are a mistake. There are suggested websites below
  • The pressure group for cuts will speak in favour of cuts, and argue why austerity measures are needed.
The PM + Chancellor will researching cuts they think should be made, and may at any time while the research is still going on ask their ministers, civil servants or pressure groups for some information to help with this!

You can google to help with your research, just remember you're trying to be as specific as possible.

A breakdown of major departments' spending (click on the plus beside each for more detail). If you click here, I've already clicked on all the relevant plus signs, saving time (see the screenshot above).
The Guardian articles on tax and spending.
A graphic breakdown of spending. (also here) The image with spending figures in red bubbles, above, is a screenshot of this easy-to-use Guardian interactive guide.
UKUncut's logo
The 2012 budget broken down.
Looking at Health? Try the BBC's list of articles on the health budget.
Looking at Pensions? Try the BBC's list of articles on the Pensions budget.
Looking at Education? Try the BBC's list of articles on the Education budget.
Looking at Welfare? Try the BBC's list of articles on the Welfare budget.

ANTI-AUSTERITY RESOURCES: The leading protest group
The Occupy movement: this has no 'official' site as such, but here's a sample post from a popular Occupy blog.
Here, the BBC report on October 2012 anti-austerity protest marches.
Right-wing blog Huffington Post gives a surprisingly balanced report on the protest, though highlights that Labour leader Ed Miliband was booed. Packed with images and videos.
Reuters (on the Yahoo! site) report how Starbucks were targeted by protestors.
The anti-austerity Wiki.
The anti-austerity protests Wiki.
Right-wing mid-market paper the Daily Mail reports on the November 15, 2012 anti-austerity protests that ocurred across Europe, including coffee being thrown at a German diplomat by angry Greek protestors!
This is definitely an international issue, with Germany pressing the rest of Europe (the EU nations at least) to adopt harsh austerity measures, against the advice of international bodies such as the IMF, building tensions to a level not seen for decades in Europe.
Here's the Daily Telegraph (right-wing broadsheet) photo gallery of Italian students' anti-austerity protests.

As every UK paper bar the Indie, Guardian and Mirror is right-wing, most press coverage will give a broadly pro-austerity slant on their coverage.
An influential right-wing, pro-austerity pressure group is The TaxPayers Alliance (try the Wiki too): The Guardian got rather curious about just who funded them.

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