Tagged with Budget

The Tory budget fails to address any of Britain’s economic woes

Chancellor Phillip Hammond

You wouldn’t have known it from Theresa May’s laughs and Chancellor Philip Hammond’s boasts, but the Budget this week failed to address the key issues and underlining problems facing the British economy.

This Tory complacency in terms of economic policies and planning, alongside their ideological commitment to austerity makes a toxic mix that will damage the living standards of the majority of British people. The reality of Tory Britain today is that we have a low productivity, low wage economy and even the jobs that are being created are insecure and often poorly paid. 900,000 workers are now on zero hours contracts, 55 percent of whom are women. Continue reading →

Osborne’s budget is not dissimilar to 2010 – it will have the same effects

Osborne in a money showerMost media coverage of the Budget is predictably sycophantic and wrong. An objective assessment is that the amount of fiscal tightening planned in this Budget is exactly the same as outlined in the June 2010 Budget. The June 2010 Budget planned tightening of £40bn, but £3bn of this was the projected fall in interest payments. Total austerity measures were £37 billion. This time George Osborne has announced total fiscal tightening of £37 billion, with further details to be added in future Budgets.

Therefore the same result should be expected. The British economy is now 14% larger in nominal terms than it was in 2010, but the international economy is growing more slowly. Circumstances are not exactly the same then and now, but the impact of £37 billion in austerity will be broadly the same. If these plans are implemented growth is likely to slow as it did previously. Continue reading →

Would a Rachel Reeves budget yesterday have been much different?

ReevesAhead of yesterday’s budget, in which George Osborne laid out £12bn of welfare cuts, a continued squeeze on public sector pay, the abolition of student maintenance grants and higher tuition fees, Labour’s ‘opposition’ front benchers went out of their way to agree with Osborne’s narrative of austerity.

Still reeling from the General Election, or now simply given psephological cover for her views, Reeves said that Labour should set a date for getting national debt back to 40% of GDP, the level it was at before the 2007 financial crisis. It is currently double that amount, meaning the Shadow Work and Pensions Secretary is advocating huge cuts, and fast. Given that she is being touted as a potential Shadow Chancellor should Andy Burnham win, this should worry those of us in the party concerned with austerity and poverty.  Continue reading →

Tory budget announces higher tuition fees and the scrapping of maintenance grants

George Osborne greenish hueGeorge Osborne announced the Tories’ latest attack on higher education in today’s budget, announcing that for some institutions fees will rise in line with inflation, and also that grants will be abolished for the poorest students. Osborne’s budget document states measures will, “include allowing institutions offering high teaching quality to increase their tuition fees in line with inflation from 2017-18, with a consultation on the mechanisms to do this.”

This is in line with concerns about new Universities Minister Jo Johnson’s speech to Universities UK last week, where he talked about ‘incentives’ for quality teaching, and said that they will be published in a Green Paper in the autumn, usually a precursor to primary legislation – in the form of a bill that will become an Act of Parliament. Tuition fee hikes require such an Act, so this was a clear indicator from Johnson that this could happen. Continue reading →

Child poverty could be Tories’ Achilles heel

CP1The Tories’ relief that the child poverty figures just published in the official Households Below Average Income (HBAI) statistics didn’t show an increase was palpable.  But that conceals the real story. The Tories have form on this issue. Child poverty tripled under Thatcher from 1 in 9 children to 1 in 3, but then fell by 800,000 under Labour after 1997. Unexpectedly this trend continued initially under Cameron with a fall to 2.3 million in 2010-11 because middle class earnings declined (so that the threshold of 60% of average earnings dipped a bit) while benefits protected the poorest. However that easing of the child poverty stigma has now come firmly to an end as a result of the housing benefit cap, the bedroom tax and the 1% cap on benefit increases. Indeed it is now forecast, particularly if the new round of £12bn cuts is launched in the budget, that child poverty will have increased by one-third to 1 in 4 children by 2020.

Even that is not the full story. In Opposition Cameron pledged to end the ‘moral disgrace’ of poverty. He went further in 2006: “the Conservative party recognises, will measure and will act on relative poverty……Even if we are not destitute, we still experience poverty if we cannot afford things that society regards as essential”.   Contrast that with the Tory reaction when they believed just before the HBAI statistics were published that the child poverty figures had increased. Were they going to ‘act on relative poverty’ to deal with a worsening situation? No, they were going to move the goal-posts so that nothing need be done. They were going to change the definition of poverty to take account of entrenched worklessness, family breakdown, problem debt, and alcohol and drug dependency – anything except a lack of money. Continue reading →