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CLASS Panel Reacts to the 2018 Budget

CLASS Panel Reacts to the 2018 Budget

Following Philip Hammond's Spring Budget announcement today, we asked our panel for their reactions. 

Diane Reay, Professor of Sociology of Education at the University of Cambridge

The struggle of schools trying to balance the books is regularly highlighted by schools having to appeal to parents for money to pay for basic educational activities such as music, art and school visits, and basic items like pens and books.

£400 million extra cash means schools may be able to fix potholes in playgrounds and mend leaking roofs but it is insufficient to make a difference to the enormous problems of pupil poverty and staff morale which schools face.

Today's budget does virtually nothing to address the serious underfunding of our educational system. Rather, it continues a culture of educational austerity which impacts most damagingly on the already most vulnerable - the working class, disabled and special needs children. 

We reap what we sow: by not properly investing in our children's education now, we run the risk of a whole future generation of young adults being set up to fail.

Dr Kailash Chand OBE, Honorary Vice President of BMA

The Chancellor announced no new money for the NHS over what was floated in June 2018. Accumulating the 5 year spend to quote a figure at the end of this Parliament is deceptive. It creates the impression Hammond is giving the NHS more than he really is. In percentage terms Hammond will still fund the NHS with less additional cash than that of the average of the UK governments from 1948-2010. Put simply, there will still be a very serious NHS crisis this winter, worse again than that the year before.

Hammond was similarly cute with his £650m announcement of additional cash for social care. This does not eradicate the £5bn in social care cuts since 2010. In that sense, social care is still in crisis with no long term funding solution in place. This means that millions of delayed discharges will continue due to the lack of availability of care packages at home. Thus, we can expect the GP crisis to continue.  Hammond offered warm words on mental health but little beyond that.

The fundamental point is that the Tories have cut capacity in the NHS. In total more than 15,000 beds have been cut, including 5,000 mental health beds. The NHS has 5million fewer bed spaces than in 2010.

The new money he is apportioning will simply be sticking plasters on the very expensive problems the Tories have created. Rising spend on clinical negligence due to mistakes caused by staff shortages. Rising cost of agency spend since 2010 due to redundancies and failure to increase medical school intake, as well as low morale driving staff from the profession. Not to forget the increasing amount of NHS cash going to private healthcare in the form of profits.

This new cash will simply go to paying for the problems the Tories have created. Not a single mental health bed or A&E ward will reopen as a result of today’s announcement. In that sense, the NHS is no better off after today’s budget.

Richard Murphy, Professor of Practice in International Political Economy, City, University of London. 

The critical issues about today’s budget are not the detail, although some of them are superficially welcome, but the overall message. There are four such messages, I suggest.

The first is that the Tories really have realised austerity has to end if they are to have any future electoral hopes. The impression is that balanced budgets might still matter, but that is a vain attempt to retain Tory credibility. The reality is that public spending is now, rightly, getting priority. 

The second message is that other major parties - and most especially Labour and the SNP - need to take note of this. They have built their policies on the basis of mimicking Tory austerity. It really is time that they let go of the shackles.

Third, rather depressingly, the whole narrative that the government spends taxpayer’s money does, unfortunately, remain in place. This is not true. The government spends money it creates through the Bank of England into the economy which it then reclaims to the extent necessary to control inflation. The dishonesty about this at the heart of government and in our politics is deeply misleading: we are still managing the economy on the basis of myths created in the era of the gold standard. It is essential we move on and build an economics and an economy fit for the twenty first century.

Last, this whole budget could, and probably will be, blown apart by Brexit. No budget since 2008 is likely to be so wrong. As a footnote in history this budget will only feature for the sheer magnitude of the forecasting errors likely to be inherent within it. 

Victoria Bettany, Senior Researcher, CLES (Centre for Local Economic Strategies)

The budget that saved the High Street?

Doesn’t feel like it. Today Chancellor Phillip Hammond announced a plethora of new spending on the back of improving growth reports from the OBR. Amongst them was a promise to reduce the business rates bills of many small businesses that populate our high streets by one third. This will be music to the ears of many occupiers of British High Street stores.

The Chancellor also announced a pot of money for local government to use to help spruce up tired looking High Streets. 

But what this budget failed to do for the High Street was to provide it with any protection from the seismic shift to online retail. The Chancellor did announce his intention to introduce a Digital Services Tax to ensure that digital global corporates, the likes of Amazon, Google and Facebook pay their fair share of tax in the UK. Even if these companies do pay their fair share of tax, it leaves you wondering what help this will be to the local high street and what if any impact this tax will have on the shift to online retail.

The issue of our declining High Streets is a pernicious one. The introduction of a new tax for Digital Global Corporates, whilst a hugely positive (and long overdue) step in terms of fairer taxation of businesses, looks to be severely lacking in tools to revive the British High Street.