On 18th March 2015 George Osborne presented a Budget which he claimed demonstrated
his “Long Term Economic Plan”.
Last week, barely four months later, he presented his second, “emergency”, budget of the
year. Clearly the Chancellor’s definition of “long term” is different from most people’s.
He will be pleased with the short term positive headlines the Budget received but his
original pre-election plan is already unravelling. The date when the budget deficit will be
eliminated has been put back another year. No doubt this will be revised back again. Until
then the borrowing will continue.
Measures Labour were calling for in the Election have suddenly been recognised as good
ideas. It’s galling, but that shouldn’t stop us welcoming them.
The proposed increases in the National Minimum Wage, the levy on firms to pay for more
apprentices, starting to crack down on tax-dodging “non-doms” and cutting tax breaks
available to buy-to-let landlords are all positive steps, even if they don’t go far enough in
But there is a lot that’s wrong with this budget.
On the big problems facing Britain, the Government is either interested only in short term
fixes or, in many cases, is taking action which will make things worse in the long run.
Increasing tuition fees and replacing the maintenance grant for students from poorer
families with yet another loan is storing up big trouble in the future.
Tax payers face an even bigger bill in the future when we have to write off even more
borrowing that students will never earn enough to repay. The prospect of more debt for
students from low income families will put some off going to university. This is bad news for
Ipswich where we are already lagging way behind on skills.
The Government has ripped up the business plans of councils and housing associations by
telling them to cut rents. 14,000 fewer homes will be built as a result. The housing crisis will
be made worse. House prices will continue to soar. The prospect of owning your own home
will recede even further away.
The increase in the minimum wage - welcome though it is - will significantly increase the
costs of the social care sector. Councils are having further cuts to their budgets so they’re
not going to be able to afford to meet these costs. Social Care has been teetering on the
edge of a cliff for years. It could just be about to go over.
The BBC is respected around the globe. Its quality programming ensures British culture and
influence spreads much further than you would expect. That is about to change as the
Government has loaded the BBC with the £750m costs of providing free TV licences for
over-75’s. News 24, BBC Three, BBC Four and local radio could all be for the chop. The
standing of Great Britain will be reduced in the eyes of the world.
George Osborne will hope that he’s long gone from politics when all this comes home to
roost but one budget measure will hit home more quickly.
Thirteen million families will be worse off as a result of changes announced in the budget, in
particular cuts to working tax credits and Universal Credit.
Poorer households will lose out much more than richer ones. The amounts many working
families are going to lose will not be offset by the increase in the minimum wage.
The Budget garnered good headlines for the Government but will these last when people
look at their payslips and see how much they’ve lost?