austerity has failed to create jobs or economic growth. As predicted, the government has attacked jobs, pensions and pay, threatened privatisation and attacked and demonised those entitled to welfare. Yet all of this has worsened rather than improved the economy and people’s lives.
Unemployment is rising, living standards are falling, and in early 2012 official estimates confirmed what our communities have experienced: that the economy is back in recession.
You might wonder why, in the face of such overwhelming evidence of failure, government ministers have not changed course. It is because they want the public sector reduced and privatised, and wages driven down. This is exactly what David Cameron promised, when he said his government would “tear down” what he described as “big government bureaucracy”.
The government has pledged to cut 730,000 public sector jobs by 2017 and to cut spending by £80bn. For millions, their jobs, pay and pensions…
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By Jenny Howarth
Chancellor George Osborne has delivered his fourth budget. It was clear from his opening gambit – “If you’re a maker, a doer or a saver: this Budget is for you” – that this budget would help the few and not the many. If you were not a ‘hard-worker’, business owner or saver then there would be no point in listening any further.
For Osborne, the budget was an opportunity to say that their long-term economic plan is delivering security for the people of this country. The emphasis was on support for businesses who invest and export, on support for manufacturers, on support for savers or rather making sure “hardworking people keep more of what they earn – and more of what they save” – all aimed towards the central mission: economic security for the people of Britain.
By the end of his 55 minute speech it was very clear that the economic security he spoke of was for the few not the many. He tried to convince people that his budget was for the “makers, doers and savers”, yet it came across as “I’m hoping to gain the over-50 vote”. He promised a budget of “hard truths” which could be implied as “if you think I’m going to help the unemployed, disabled and vulnerable then think again”.
Osborne’s budget was more ‘out of touch with reality’ than ‘hard truths’. He spoke of economic growth, a Britain on the road to recovery, even mentioning the new resilient pound coin to match the resilient economy. However, for thousands of families waking up the morning after the Budget, life is still a struggle. For them the budget was meaningless, doing nothing to improve their desperate situation and here is why.
Julia Unwin, Chief Executive of the Joseph Rowntree Foundation said:
“This is a Budget for the people who already have, not for the people who need to benefit most from the return to growth. It is a lost opportunity for the 13 million people in poverty who need active intervention to tackle the structural barriers that keep them in poverty”. Adding, “People on low incomes are unlikely to see the welcome benefits of growth unless there is targeted help with household and housing costs, with child care and with the nature of jobs and training. The expense and inefficiency of high levels of poverty continue to put a drag on growth”.
A view shared by other charities. William Higham, Save the Children’s director of UK poverty, said:
“The Budget was a missed opportunity to address the needs of families that are struggling to pay their food bill and children whose parents cannot afford to pay for uniforms and school trips”.
It is for these reasons, George Osborne’s fourth budget was a budget for the few. It failed to address the fact that living standards are falling – despite the 2010 Manifesto promising “An economy where…[people’s] standard of living…rises steadily and sustainably”. It failed to help the 350 000 reliant on food banks or the 400 000 disabled people paying bedroom tax. His “resilient pound for a resilient economy” ignores the fact that working people are £1600 worse off.
Osborne may believe that increasing personal tax to £10 500 will help improve living standards but whilst it lifts three million out of taxation, it does nothing for the many families who depend on housing benefit to top up the little wage they get. “The vast majority of this will be deducted from their benefits – giving with one hand while taking with the other”, says Matthew Reed, Chief Executive of The Children’s Society.
Matthew Reed’s comment raises another important point – benefits. Osborne had nothing to say on this except to announce a cap on the welfare budget. This will see Tax credits and housing benefit limited to £119.5bn in a bid to cut the deficit. Critics say that this limit to benefit claims over the next four years will hit disabled people and the low paid without tackling the underlying causes of Britain’s growing social security bill.
Whilst it may appear to be political suicide by Shadow Chancellor Ed Balls saying Labour will vote for the cap, it is not. According to Jonathan Portes, director of the National Institute for Economic and Social Research (NIESR), the cap was simply a “gesture” and served no purpose other than to kick the “problem of spending cuts into the next parliament”.
For Portes it was “meaningless” to put a number on the cap without having policies in place to deliver it or to state how the cuts would be achieved. Adding that the charter would commit MPs to renewing the cap each year. “As Parliament already votes on measures to change social security budgets, this charter will not make much difference”.
It would appear that Osborne’s welfare cap charter is not new but something that already exists. It could be argued that whilst Labour is voting for it, there is plenty scope to amend the limit and bring in policies that would help not hit. Moreover, the question that needs to be asked is would a successive conservative government do that or would they continue with their long-term economic plan that they insist is bringing security to the people of Britain.
For now it would appear they are committed to helping the few, committed to bringing security to the hard-workers, business owners and savers. Alison Garnham, Chief Executive of Child Poverty Action Group, says:
“Today’s Budget tries to lock-in austerity for millions of low-paid families, poor children, carer’s and disabled people. Announcing a cap for social security spending without a plan to address the root causes of low pay, high rents and high childcare costs, simply forces the most vulnerable in society to pay the price for inaction”.
Source – Welfare News Service, 20 March 2014