A personal view of the budget

Janet Moxley
on : 
9th Jul 2015

Well, as we all expected the first Tory budget has turned out to be an attack on the vulnerable and to be damaging to the environment. To that extent there were no surprises. The cuts in support for the least well off are truly frightening. Under 25s could be left destitute by cuts to their benefit entitlements, and are being forced to sell their labour for less than a living wage. Support to students from disadvantaged backgrounds has been changed from a grant to a repayable loan. How is this an investment in our future? Larger families who fall on hard times will be penalised. It's all very well to blame parents of large families for bringing children into the world, but in reality most parents do not plan to bring up large families in poverty, they often end up there because of changes in the precarious set of circumstances which allow them to work: a death, illness, the need to care for a relative, or even more mundane things like changes to childcare availability or the public transport they use get them to work. Rather than demonising these people isn't it about time those of us in work took a good hard look and said "there but for the grace of god..." And as expected there are the tax cuts for the better off. Raising tax thresholds won't help those in poverty who don't pay tax anyway. Cuts to Corporation Tax are wrong - companies should pay for the national infrastructure they depend on. I seem to remember the Tories being against devolving Corporation Tax to Scotland because they felt that giving Scotland the power to reduce it would lead to a race to the bottom, but isn't that exactly what they are doing now? As ever the Tories show scant concern for climate change and the environment. Incentives for low emissions vehicles and renewable energy are scrapped; road tax duty will be ear marked for road building programmes rather than improving public transport or reducing the need to travel and Fuel Duty which was reduced when oil prices were high will not be increased now prices have fallen. All of this is a disaster for the environment, but great if you own an oil company. And how can it be right to increase defence spending to meet targets set by the Americans when people in this country can't eat? I see something the relationship between The Capital and the rest of PamAm here (if you haven't read The Hunger Games do!). It would be wrong not to acknowledge the few positives - some measures to reduce tax evasion through the non-dom tax status; a training levy to force companies to invest in training rather than outsourcing their training costs and some measures to cut the tax advantages of buy to let property and large pension pots. However the positives are very few. Perhaps the most contentious area is the promise of a £9 per hour living wage by 2020 for the over 25s. This is being much heralded in the media as being the best living wage on offer. Certainly it is better than the current minimum wage and Labour's offer of £8 per hour, but it isn't the £10 per hour promised by the Green Parties. Furthermore it is being funded by cutting support for those out of work and giving it to companies through Corporation Tax cuts. However, politically the £9 minimum wage is a smart move. Many people on low pay won't be too bother about where the money is coming from. It will reward those UKIP supporters who the Tories have lured back and disillusioned Labour supporters who voted Tory, leaving Labour looking more right wing that the Tories on this issue. Many people will welcome it, and it will look churlish to many voters if the Greens attack it when it looks like a step in the right direction even if it isn't as high as we would like or funded in the way would we like. We will need to be careful how we communicate our concerns about this. Another aspect of the £9/h living wage which concerns me is how it will fit with the insistence on capping public sector pay increases at 1% a year for the next four years. Many public sectors workers are on the minimum wage. Implementing the £9/h living wage will increases pay for low paid public sector workers by more than 1% a year, which is a good thing. But if the total public sector pay budget only increases by 1% a year there will have to be pay freezes or possibly even cuts for other staff. While a few public sector staff such as top council staff and surgeons are paid high salaries and arguable could live on less most are not so well buffered. While it is completely desirable to increase the pay of the lowest paid public sectors workers this should not be done at the expense of other public sector staff. If wages in the public sector do not rise in line with private sector wages (currently increasing by 3 % a year), staff will start to feel that they have no choice but to move to private sector work. In this way the Tories will succeed in their desire to collapse the public sector, not by forcing "competition" where private sector firms have often been such patent failures, and given such poor service that the policy is losing support even amongst some Tory voters, but by sucking away the talent and expertise needed to run public services. "We just can't get the staff!" Finally there are the proposed £20bn of cuts in UK Government Departmental budgets. Everyone loves to hate civil servants, the whispering Sir Humphries pushing their own agenda of inertia, but these are the people who actually get things done when it comes to implementing government policies. Perhaps the cuts to the civil service will end up being the Tories' Achilles' heel. They many just be abolishing the anonymous mandarins they really need to implement their obnoxious policies. And perhaps that might just save us all!