Clearly this is not the world that the Chancellor of the Exchequer inhabits. Gideon smugly sat on the green benches in Parliament and talked of the savers and the strivers. Given the conditions that we are living in, this budget was clearly not designed to appeal to us. The public sector pay freeze remains in force, unless of course you are a Tory Party special government adviser where an increase of up to 36% may be in order.
Not all public sector workers are the same, just as not all animals were. And can any regular public sector workers afford to save when everyday household costs soar while income is slowly diminished by the insidious effects of the pay freeze and inflation? Local government is now one of the largest low pay employers, while health and education colleagues have been treated with distain. The share of the economy going to wages continues to fall.
The much lauded increase in Personal Income Tax Allowance ensures that households in the top half of the income tax distribution will gain three-quarters of this bonanza. As Gavin Kelly of the Resolution Foundation notes in The New Statesman - http://www.newstatesman.com/politics/2014/03/why-lib-dems-%C2%A312500-tax-allowance-promise-smaller-pledge-it-sounds
“I’ve written before about why it isn’t what it’s billed to be. It’s not a tax cut for the lowest paid (the 5 million lowest earners don’t get a penny); nor is it really about lifting people out of income tax (roughly 10 per cent of the cost of the policy goes on this). It isn’t targeted at those on the minimum wage (the clear majority of whom are part-time workers who don’t pay income tax); and it’s certainly not well designed to reach those fabled "hard working families" (just 15 per cent of the gain goes to working families in the bottom half of the income distribution).
"In a world of Universal Credit (UC), it’s even more regressive than people realise: millions of low and middle income working families will have most of their gains immediately withdrawn via a lower UC entitlement. And there is no policy justification whatsoever for raising the PTA once again while leaving the national insurance threshold at a far lower level – a point that even senior Lib Dems concede in private. But none of this is new.”
Tax avoidance and evasion were of course scarcely mentioned in Gideon’s time at the dispatch box, while he remains committed to fighting EU curbs on bankers bonuses. At the same time Welfare remains capped, cynically ensuring continuing misery for the disabled and the lowest paid.
There is an estimated one million households requiring housing in the UK. To solve these problems Gideon has pinned his hopes on Ebbsfleet Garden City. That is going to be a helluva size of a city and of course not a penny of government money is going toward it. Forgive a level of cynicism that private renters, the homeless and those stuck living with their parents into their thirties are not seen as casting their ballots for Conservative politics. This budget had nothing to say about or for any of them.
Gideon boasts that growth is at last moving upward. It was growing of course, when Alistair Darling (Labour) was chancellor. And present rates are around half of what the Tories themselves predicted in 2010. Gideon’s investment policies will not put a single young unemployed person in a job. Pleas for an increase in levels of public investment have fallen on deaf ears again. The Office of Budget Responsibility confirmed that the Government's cuts agenda was holding back economic growth when it wrote to the Prime Minister to clarify that “we believe that fiscal consolidation measures have reduced economic growth over the past couple of years”.
Pledges on money for pot-holes or flood defences will provide the equivalent of elastoplasts for patients requiring major patching up. There is still no end to the cuts however - whatever the consequences. UNISON itself outlines a costed programme of public investment that would boost growth and employment https://unison.org.uk/upload/sharepoint/Toweb/UNISON%20Budget%202014.pdf
There is a complete failure to tackle long term unemployment while the job growth there is, is concentrated on low paid, temporary, zero hours contract employment. That hardly creates the conditions for a well paid, well trained workforce able to respond to modern challenges , or create the conditions where households will be able to have a regular stable income and an acceptable standard of living.
Of course the headlines from this budget are on pensions and savings. Congratulating himself on freeing up the pensions industry to the advantage of the pensioner, Gideon didn’t of course mention that his changes will over the longer term increase the tax take on pensions. And good old fashioned Keynesian economics would preach that however good encouraging savings may be for the individual, in the current economic situation it is not what the UK economy needs.
It’s also worth mentioning that so called child care give away. As reported in the Guardian: “Labour said the richest families with expensive nannies would benefit most from the tax break, which offers 20% off the cost of childcare up to a maximum of £2,000 per child. To get this top amount, they would need to be spending £10,000 per child per year. In contrast, the average family helped under the proposals will only get around £400 off their costs, based on estimates of 1.9 million families claiming under the £750m scheme.”
In short this is a budget for the Tories by the Tories screaming of arrogance and complacency – to them that have, more will be given. To those that have not - who are the working people of this country - NOTHING. The rich boys hope that by pandering to the wealthy pensioner they will secure votes.
But railing against the unfairness of it will not change the government. We need a political plan over the next year to mobilise our own union members to vote in their own interests , and to encourage the young, the unemployed and those on poverty wages not to accept the Tory inevitable but to cast their votes against it. It would help if the Labour Party was on the same page.
