THIS week saw the Chancellor of the Exchequer, Jeremy Hunt, deliver his Budget to the House of Commons.
Hunt spent his speech parroting the Conservatives’ favourite claim that everything they do comes from a desire to “make work pay”. Of course, work should pay, but after 14 years of Tory Budgets, income inequality is higher than any other large European country.
Middle-income earners are now 20% poorer than their peers in Germany. Real wages are not forecast to recover to their 2008 level until 2028 meaning that UK workers are now on course to have endured twenty years of declining living standards.
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In his speech, Hunt wore his conservative values like a badge of honour. He said, “We believe that in a free society, the money people earn does not belong to the Government; it belongs to them, and if we want to encourage hard work, we should let people keep as much of their own money as possible”.
It sounds like a nice idea but analysis from the New Economic Foundation (NEF) shows exactly who Hunt is referring to. The NEF have found that the top 20% of households will receive 13 times more than the bottom 20% because of the 2p cut to National Insurance; £3.8bn will go to the top 20%, whilst only £300 million will go to the bottom 20%. It is the age-old tale of the rich helping the rich get richer.
He talked about “encouraging people into work” and “making work pay” but failed to take into account the rising levels of in-work poverty. We know that the minimum wage is not a living wage.
On top of this, continually rising inflation means that anyone who doesn’t get a pay rise in line with inflation is essentially experiencing a wage cut. You cannot incentivise people out of poverty – particularly when they are already working all the hours they can on terrible pay, just as you cannot encourage people to lose a disability.
The job of government is to provide and fund public services. The only way government can genuinely help more people get into work is by making sure we have healthy, educated, and happy citizens with decent housing and decent pay. Investing in people, and the organisations that support people in whatever way is necessary.
That cannot happen if you continually cut the amount of tax paid by those who are already hoarding all the wealth.
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Paul Johnson of the Institute for Fiscal Studies has argued that public services are already on their knees. Not only have our services been starved for the past 14 years, but in his Autumn Statement, the Chancellor already slashed £19bn from public spending. This week he announced a further £20bn cut.
What people need is a Budget that delivers more funding and investment for our public services. A Budget that supports households through yet another year of this cost of living crisis.
The last thing we need is yet another austerity chancellor taking yet another swipe at the services so many of us rely on.
The SNP called for some real moves in the Budget that would help people at this time. The Chancellor should have used this Budget to help working families through the cost of living crisis by taxing the super-rich through a £12bn wealth tax.
This would have funded a £400 annual energy bill discount for households who are struggling with soaring energy bills.
The SNP would have also reintroduced mortgage interest tax relief, we would have capped supermarket food prices, and matched the Scottish Child Payment UK-wide. These moves would help people so much during this time of uncertainty.
So long as the big financial decisions are being made by out-of-touch politicians in London, Scotland’s NHS, our education system, our transport system, and all of our public services are in serious danger.
For all the Tories claim this was a Budget for long-term growth, the truth is, it is a budget for the wealthiest amongst us as we near an election.
It is short-sighted selfishness at its finest.
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