It’s strange to see a Tory government that seems keen to spend and intervene in the economy. Certainly, under Johnson, they’ve moved away from strict austerity and spending cuts.
But before we get too enthusiastic we need to put the budget in context and look at the detail.
The £150 billion spending increase over the next three years is not even close to enough to repair the damage they inflicted on this country in the last decade.
It’s great, for example, that there are to be 75 new “family hubs”, intended to provide a one-stop shop for various support services.
But we need to remember that this is after the Tories closed 1,300 Sure Start centres which also provided a one-stop shop for various family support services. 75 opened and 1300 closed – you do the maths!
Per pupil schools funding is set to increase. But this will only be enough to take it back to the 2010 levels by 2024 — 14 years, an entire generation, wasted.
Pat Harrington, General Secretary of Solidarity, said:
“This wasn’t a budget that will change the lives of working people for the better. Overall we will be worse off. It wasn’t the radical budget we need to build the economic strength of our country and give people real incentives to work hard. It will not make a dent in the effects of years of wage stagnation and underspending on essential services.”
The cut in the “taper rate” for universal credit — the rate at which UC payments are removed once someone starts working — is to be welcomed.
Yet this will save claimants only £2 billion in total compared with the £6bn taken from UC claimants when the £20 weekly uplift was withdrawn.
The taper reduction will not benefit unemployed UC claimants at all.
Welfare payments will rise by around 3 percent, while inflation could be 5 percent.
Prior to the budget Sunak’s officials confirmed that the minimum wage for workers aged 23 and over will rise from £8.91 an hour to £9.50. That’s welcomed by us.
But a worker on the minimum wage affected by the removal of the universal credit uplift, higher national insurance contributions, and a freeze in income tax personal allowances, will still be £807 worse off from April. And that’s before taking into account the expected rise in gas and electricity prices next year.