Five ways to deliver a good budget
People braced themselves yesterday for a cruel budget. We knew it would hit workers heavily, the working poor heavier still, and the non-working poor heaviest. We knew that those hits would happen whilst corporations and the rich were given slaps on the back.
What we didn’t anticipate, apart from how much of our lunches we’d lose at that image of Ian Duncan Smith wildly thumping the air was just what a cynical piece of politicking Osborne would produce.
£12 billion worth of cuts over three years was framed as moderate, instead of the swingeing target of over two years we’d all been expecting. A rise in personal allowance was explained as lifting people out of poverty, as the abolition of tax credits made millions of people worse off. The Living Wage was disgustingly co-opted and attached to something which bears no more relation to a fair pay policy than a tenner in an envelope.
To put things into perspective, here’s a punt at what the main bits of a budget written for workers, rather than for cynical manipulation of the country, would look like. A wish list, if you will.
1. Actually implement a living wage.
Can we all just call this the Osborne Wage? It has already been picked apart ruthlessly by the Living Wage Foundation, who point out that their well-respected calculations assume the existence of tax credits and are significantly higher.
A proper living wage, £9.15ph for London and £7.85ph for the rest of the UK, would bring significant benefit to both the economy and society. It would lift millions out of poverty. KPMG have recently calculated that a proper living wage would bring a net benefit of £1.5 billion to the UK economy.
2. Build more bloody houses.
The housing crisis is a huge festering wound, the budget offered some sticking plasters. Landlords will pay slightly more tax and the decreasing number of social tenants who remain in the UK will pay very slightly less rent.
There are plenty of elements to the housing crisis but building more homes would get to the root of the problem causing all of them: a lack of supply. A perhaps biased source - the Home Builders Federation - say that 1.5 jobs are created for every house built. The most recent census says we need to build 245,000 homes per year.
3. Bring back educational maintenance.
Getting poorer students into further education and keeping them there is a must for any society which wishes to become more equal. EMA - Educational Maintenance Allowance - was a grant of up to £30 a week for the poorest students in post-16 education. It still exists in Scotland and Wales, but apparently its no longer needed in England, because the Tories scrapped it in 2010. Their own social mobility tsar said this was a mistake.
Bringing back grants for poor university students, scrapped in this year’s budget, needs to happen, but EMA should also stay on any progressive’s policy wish list. Not all working class kids want to go to uni: EMA is therefore a policy which all those from less privileged backgrounds benefit from.
4. Remove the age division for benefits and wages.
Both the minimum wage and the benefits system are currently structured around the bizarre assumption that young people have access to a magical money tree which withers and dies on your 25th birthday. 18-21 year olds presumably have a tree house in theirs, as they’re assumed in this budget to have no need for housing benefit.
Young people have been disproportionately affected by the recession, with youth unemployment now at its worst for 20 years. Only the cruellest of governments snatch help from those who need it the most: cutting off full benefits means young people are less able to move to find work, and are more likely to be offered jobs they essentially can’t afford to take.
It’s a pretty stupid government, too, who make it more difficult for a whole generation to get out of a situation estimated to cost £155 million a week.
5. Increase taxes for corporations and the rich.
Cuts to corporation tax have already cost the UK economy upwards of £5 billion a year, and we already had the lowest rate in the G20 when Osborne cut it further to 18%. The threshold for the 40p tax rate has been increased. The families of millionaires have been spared inheritance tax. None of these policies are necessary for wealth creation. The economy, for example, was hardly tanking pre-recession, when corporation rates stood at 30%. These policies are instead a deliberate and determined effort to do away with the idea of redistribution of wealth in one of the most unequal developed countries in the world.
That way of doing things - austerity - has been fed to us as a necessary evil.. If we want to challenge that, the one thing we need to remember and articulate is the alternative. The Conservative budget, which has seen inequality rise to Victorian levels, is not the only way of structuring society. It is nothing more than their own wish list.