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He did it. He went there. After announcing that some rich people had actually paid some tax, George Osborne quoted his leader’s mantra that ”We’re all in this together” and added his own, new catchphrase, that “this is the government for the next generation.”
So what were some of the delights offered in this budget? There’s a freeze in fuel and whiskey duty, corporation tax will be cut to 17% and in April next year there will be an increase in the 40p tax threshold to £45,000. So if you’re a whiskey drinking businessman with a fuel guzzling car, then it’s been a pretty good budget for you.
But what sort of budget has it been for the those on lower incomes? Well, there will be a lifetime ISA for the under 40’s to top up the pension that won’t exist when you retire at 85. But what use is an ISA if your everyday living expenses are so great that you can’t afford to save in the first place? But what about the sugar tax? Won’t that protect all children – rich and poor – from obesity and diabetes? Arguably, yes. But government studies show that the most obese people are the poorest people, so perhaps not such good news for the poor. There will of course be the much-leaked increase in the tax allowance next April to £11,500 to coincide with the raised 40p threshold, but that still won’t make up for the losses people are coping with after cuts to working tax credits. And who will pay for these new tax benefits anyway?
Well that’s quite a simple one to answer. The sick, the disabled and those already struggling to get by. In essence, those least able to pay.
On top of the ESA cuts voted in last week despite warnings from the Lords, from disabled people and from the Disability Benefits Consortium that further cuts would have a devastating impact on the lives of disabled people, more cuts to benefits have been announced. In a bid to save the Treasury £1.2 billion, the government has decided to cut Personal Independence Payments (PIP) made to over 640,000 people. Some 200,000 disabled people will lose their entitlement, while another 400,000 will have a reduction in their weekly payments from £82 to £55. Disabled charities have argued that these changes will be ‘devastating’ and say they will fail some of the most vulnerable people.
In this week’s budget, George Osborne announced an increase in spending on disability ‘in real terms’ of £1 billion – but that this spending will be ‘better targeted.’ He didn’t elaborate on where this money would be spent, but in light of recent announcements perhaps he’s considering using it to fund further legislation to make the lives of disabled people that little bit harder. And no mention of where this magical billion will come from, or how the massive cash surplus predicted for the end of this parliament will come about.
And that really was the theme of this budget. It’s not about what the Chancellor said, it’s more about what he didn’t say. He repeated ad nauseum that this was a budget for the next generation while completely ignoring the problems we’re facing now. Productivity growth is 3% smaller than predicted in November, public sector net borrowing is £11bn worse than previously forecast, debt-to-GDP ratio will rise, rather than fall, this year, and the rich will get richer, and the poor, the sick, the disabled, the vulnerable, will get poorer and struggle even more.
But that’s okay. At least those that can afford it can raise a glass of single malt, and celebrate having a few more quid crammed into their over-stuffed pockets.