Budget 2015: A Rosier Picture?

The first fully Conservative budget in 18 years but it contained very few surprises. Apparently the BBC 'experts' were shocked at a rather "rosier picture" as the timeline to reach a surplus was extended. Now I'm sorry, it is no rosier than it was in 2010, we are simply now faced with an even longer period of this farcical austerity programme. However, the way austerity is being carried out has changed, we're seeing slightly fewer cuts but that has been replaced with tax rises.

I have a short memory but even a goldfish could remember the promise, actually legislation, that David Cameron and co made during the election to not raise VAT or national insurance. Of course what the sneaky Tories were hiding from the voting public is that tax rises would come in other areas or as it happened, completely new taxes.

A Politician Always

The national living wage, that's the branding and the hoped headline catcher. Labour had it in their manifesto (something I could say a lot in this post) but were only proposing a rise to £8, generous George has suggested a rise to £9 today. But wait, as usual you can't take the Tories on face value because not so generous George also announced a freeze on working age benefits, a large tax credits cut not to mention a housing benefit cut for under 21s and a new tax on motorists. George stuck to something that has become a tradition in the past 5 years, give those foolish enough to ignore the details a juicy worm (the living wage increase) while hiding the sharp hook underneath. Don't be fooled, George has not had a Scrooge moment and realised he could be nicer to  people, this budget still makes young, disabled, low wage workers lives harder.

Another caveat that George hopes to hide below his national living wage increase headlines is the fact that this will not take full effect until the end of the parliament while his cuts and tax rises take effect almost immediately leaving a hole in the finances of families up and down the country. George also stuck to his beliefs with regards to the public sector, imposing a harsh 1% pay cap on nurses, teachers and police for the next 4 years while naturally receiving a healthy increase in his own wages. So this living wage is designed to increase the private sector yet further, while the public sector that educates and keeps those private employees safe suffers again.

Osborne’s “living wage” is a con trick. Cuts to tax credits mean wage to live on would need to be much higher than £9 in 2020 #budget2015

— Liz Kendall (@leicesterliz) July 8, 2015

The 'Yoof' Is Punished

Don't vote or don't vote Tory and get punished. That's the message George sent out to the young people in this country. After having tuition fees increased and EMA support pulled in the previous parliament, they now have to suffer maintenance grants being turned in to loans. Placing students in to yet more debt before even earning a wage. Yes the wage required to start paying these loans back has increased but this is not a defence. What frustrates me about that argument is the fact university is supposed to help you get on and reach a good level of employment, if you do actually achieve this you are then punished by having to pay loans back.....FOR THE REST OF YOUR LIFE. Of course the nature of the job market under this government means your hopes for your future are raised at university only to be sunk by only having options open at low levels of employment but "Hey, at least you don't need to pay your loans back."

Not only have grants been removed but the much heralded national living wage doesn't apply to those under 25. Young people also face having to earn or learn until they are 21, that means no support from the state if you have aspirations of high levels of employment, do your paper round or go homeless. Housing benefit for young people is cut too, just for good measure. That's why young people need to vote, politicians save those who vote.

Osborne removes benefits for 18-21 year olds and introduces new regime to be known as the Hunger Games. #budget2015

— David Schneider (@davidschneider) July 8, 2015

The Labour Approach

The budget announcement only finished a matter of hours ago yet to some areas of the media George is already being spun as generous and plotting a far lighter route than feared. Labour needs to be forceful in its reply, it needs to point out the underlying issues that look like going hidden under the pretty distraction that is the living wage. One argument post election was that Labour looked anti-wealth generators, well point out this budget will punish those who strive to earn a decent living, who will lose benefits for their third child or the young who face a dark start to working life. Point out that small businesses may have to make redundancies to cope with the living wage increase or the lack of skills and productivity needed to make a successful economy.

All of this is disguising the fact that more homeowners can avoid the inheritance tax, supporting wealthy landlords. It disguises the fact that public sector workers are hit yet again, no pay increase but more taxes. It disguises the fact that the already lowest corporation tax in Europe gets another cut eventually to 18% by 2020, boosting the companies who already own a majority of the wealth. The budget could be Labour's chance to hit back, if it opposes forcefully and vocally.

Corporation tax rate cut now means that wealthiest can shelter income from tax at lower rates than their cleaners pay #budget2015

— Richard Murphy (@RichardJMurphy) July 8, 2015

Osborne has just cut the lowest corporation tax in the G8, and then cut it again.

— Mark Ferguson (@Markfergusonuk) July 8, 2015

This budget has at least confirmed one thing I had thought on May 8th, it's going to be a long 5 years.