We have waited for the budget to arrive so we could see the bad news, well it’s here and the news is generally as bad as feared.
I’m going to cover some points that I think are important to the people I know, since I don’t know many people in £1,000,000 houses I’ll focus on the bad news.
Restricting Child benefit to the first two children only. A clear response to the ongoing media campaign to highlight the benefit families with ten or more children. Over the years I have met and spoken to a number of women who were happy to use and abuse child benefit by simply having another child and another, not caring in some cases who the father was. Stopping child benefit at two children moves having children to a matter of personal choice which must be budgeted for rather than a lifestyle thing that the state pays for.
It does mean that only the rich can afford large families unless we reinstate child labour and get the youngsters into sweatshops and cleaning chimneys but my thinking here is that having children is a massive commitment that should be done after very careful consideration. It does means that well off families that have more than two children who then become unemployed will be in greater difficulty since any child above the second will not receive benefits but these days anyone who is out of a job suffers.
Of course this does mean we need to actually teach people in schools about contraception and actually punish people who are too stupid to realise having sex means getting pregnant unless they use contraceptives.
Tax threshold raised from £10,800, to £11,000 next April. What will we do with the extra £1 a week, a pint of beer, no beer is too expensive for that, maybe a bag of crisps. Now sarcasm aside this is a tiny but welcome move but it’s not enough. The tax threshold should be set to only hit people who are working full time at the real living wage. As it stands people who are struggling on low wages, part time jobs, zero hours exploitation and the like are unlikely to even notice this change and the loss of tax credits over the next few years will be higher than the gain from this even with the minimum wage increase for people on less than full time jobs.
Student grants become loans. The student Grant system was to support poorer students and allow them to attend universities where they couldn’t afford to travel away from home to do so. Now it’s a loan NOT a grant, meaning the government wants it back once the student gets a well paying job which at present is £17,335 a year. This means that with university fees of £9,000 a year and now the student loan of £3,387 together come to £12,387 a year. A three year degree would leave a student from a less well off household £37,161 in debt before they even start work. A four year degree will leave a student with debts of at least £49,548 and probably more given that Universities are now allowed to increase what they charge in line with inflation.
This steady increase in the cost of education threatens to stop the poor from going to university, a return to the old days when only the wealthy would send their children to university and the poor families went to work in the fields and the factories.
Oh and good luck getting a mortgage and moving onto the housing ladder with fifty grand in debts hanging over your head before you even look at a deposit.
Public sector pay restricted to 1% for the next four years. Coming as this does on the back of years of pay freezes for the public sector workers this is going to hurt. While inflation is low at present the cost of living still goes up meaning that this represents a pay cut over the years.
This means that the nurse working long hours to care for you in hospital, the fireman who risks his life to put out fires (and is already facing being sacked and losing his pension because of the age changes meaning he must work till 60 but still take compulsory fitness tests that he cannot pass at that age and so loses his job AND pension) and save you or your family, the police who risk themselves to keep the streets more or less safe and even the pen pushers that we all hate to deal with. They are looking at the amount of money they have to spend each year falling steadily in real terms.
At some point a sense of duty is replaced by a 'my job isn’t worth this' attitude and the nurses stop caring, the firemen are slow to respond and no longer risk themselves to save property and the police step aside from the nutter with the knife or just shoot him rather than trying to stop him.
All of the emergency services have faced cutbacks, budgets slashed, large numbers of layoffs, now they are looking at another four years of their effective pay going down year on year.
At some point this is going to reach the point where the public sector says enough is enough, then we call the police and get G4S or call for an ambulance / fire engine and get the lowest bidder private sector responder (eventually).
There is going to come a point where people get angry enough at the inequality and the Dickensian way that the majority of the population is treated, when the lynch mobs come for the government Osborne may come to regret this as the police decide they have far more in common with the mob and no loyalty to the people who have cut their pay year after year and so step aside and wave the mob in.
But as long as it happens slowly, drip by drip, the Tories hope people never get that angry because each year is only slightly worse than the year before and people forget back in the good old days when they could afford a few luxuries or that holiday.
Finally the highlight of the budget and the thing that has the Tory friendly media crowing in triumph, the new National Living Wage. This will come into effect at the beginning of the next financial year, April 2016 and it starts at £7.20 rising to £9.00 in 2020.
Wow, a new, legally compulsory, National Living Wage, be still my beating heart.
Firstly and most importantly THIS IS NOT A LIVING WAGE!
It’s a rebrand of the national minimum wage which has been increased a little with a promise of further increases in the future. Today the ‘Living Wage’, that is the wage considered the lowest required for a person to live rather than exist is outside of London is set at £7.85 (in London its £9.15). This figure does NOT include benefits, tax credits, child support and a host of other things that can be and are claimed by people.
But coming as it does alongside a freeze on some benefits and a cut on others the actual living wage is going to be higher still and this new National Living Wage is going to be some way below what is actually needed to live rather than survive.
Note that the £7.20 next April is fixed but the £9.00 in 2020 is a government objective and did not seem to be guaranteed. Osborne said the Low Pay Commission will recommend future rises that achieve the government’s objective of £9.00 an hour in 2020. Objective, as in subject to changes, something they are aiming for not guaranteeing.
An increase in the minimum wage is welcome, it will help several million people by giving them a pay rise and if this does rise steadily it will continue to help people but over the next few years as the benefit freeze takes effect and people start to feel the cut backs is it enough to leave the poorest better off or worse off? People using the Better / Worse calculators are not looking happy when they look at their income over the next five years.
If IDS is this happy about the new National Living Wage we should all be worried. Why re brand the minimum wage as the national living wage except to cover up the lack of a 'living wage'. £7.20 is below the living wage as it is considered today and no mention of London workers so it's basically a name change and a small increase in the minimum wage but is being hyped as a massive thing, which it doesn't seem to be.
Now the government sets the living wage and at £7.20 it's below what is considered the wage required to live on. But by calling it the living wage they have stolen the name and released the pressure on all those corporations who were refusing to pay more than the absolute minimum or play games with zero hours contracts.
Still there is some good news for the under 25s. If you live at home with your mum and don’t even dream about going to university or bettering yourself you are going to find yourself very popular with employers.
I foresee lots and lots of jobs for the under 25s. Of course you are going to be paid a terrible wage and exploited at every turn since the new National Living Wage doesn’t apply to the under 25s making you very cheap to employ. It’s bad enough now with hidden ageism in the job market but next April, Oi Vey, the over forties who don’t have some unique or in demand skill should make plans to kill themselves and remove the expense from society because there will be sod all jobs for them and no benefits if they are out of work and out of luck.
We have lived through five years of Austerity where the poor have been punished for being poor, the sick have been punished for being sick and the needy have been treated like criminals. What this budget says is that the next four years are going to be more of the same, the less well off suffering while the better off are barely touched or actually benefit from the changes.
Four more years of benefit freeze combined with four more years of wage freeze along with all the little tricks such as calculating benefits and wages against the the consumer price index rather than against the consistently higher retail price index mean and the way in which the poor, unemployed and disabled are still being treated means that the next four years are going to as harsh as the last four.
Of course everyone will get a few trinkets and shinnies just before the next election to get them to vote Tory but between now and then it's not going to be good for those who aren't well off.
Oh and as for the restrictions on Tax avoidance, riiiight, lets see that happen then. Non Doms, damn, they are going to have to call in the accountants and transfer everything into an off shore company so they can LEGALLY avoid the tax rather than just use their non domiciled status.
Landlords and buy to let, yep, only rich people are allowed to be landlords. can't have the poor people becoming property magnets or getting ideas above their station.
Overall, its a pure Tory budget, I didn't expect it to be kind or help the poor but it could have been worse.
Which sums up the Tories really, the best you can say about them is: No matter how bad it is, it could have been worse!