Osborne said the state accounted for "almost half" of all national income, including the escalating cost of debt interest, which was "completely unsustainable".
[1] Public sector workers face a two-year pay freeze, although 1.7 million of those earning less than £21,000 will get a flat pay-rise of £250 each year.
Prime Minister David Cameron said the previous Labour government had refused to publish its own projections showing the escalating cost of interest.
The Conservatives had also agreed to Liberal Democrat wishes to gradually raise the personal allowance, i.e. the level of income on which no tax is paid.
[14] Tory statements before the election also pointed to a reduction in Corporate tax, perhaps partly paid for by changes to capital allowances which are currently seen as complex.
The Business Secretary, Liberal Democrat Vince Cable, had announced that reducing tax avoidance is a priority of the new government.
[17] The Liberal Democrats had wanted to reduce the annual exemption from CGT, and to cap the rate of relief for pension contributions.
[18] John Redwood and David Davis publicly argued against the rise in the CGT rate, but Cable insisted that the parties were not divided over the issue.
[19] Acting Labour leader Harriet Harman responded for the opposition, calling the speech a "Tory budget", and predicting that it would increase unemployment and stifle growth.
Meanwhile, the British Venture Capital Association expressed entrepreneurs' "deep concern" over the CGT hike, warning that it could deter overseas investors.
[6] However, former Bank of England rate setter David Blanchflower warned that the budget risked sending the UK into another recession, and that a "double-dip" is now the best case scenario,[21][22] The Minister for Women and Equalities, Theresa May, had written to the Chancellor emphasising the need to assess the effect of the budget on women, disabled people and ethnic minorities.
[23] In September 2010 the Fawcett Society was sought a judicial review of the emergency budget for failing to demonstrate that such an assessment had been made.