George Osborne’s first non-coalition budget was presented in the Commons to great acclaim from the Tory Party, with some elements of the press hailing it as the working people’s budget. But is it really?
It is obvious that the chancellor’s ultimate goal was to make Labour appear as the party of benefit claimants, also viewed by many Conservative Party supporters as parasite. In other words, his plan was to deliver a fatal blow to the Labour Party.
The biggest losers from the budget are the young people
So let’s see whose budget it really is. Who are the losers and the winners?
The central piece in this deception is the living wage. How will this work? A living wage is welcome and many will benefit from it. Alas, there will be as many people losing out.
Firstly, £9 is not a living wage in London or Aberdeen now, let alone in 2020. The current estimate for London is £9.15, but only when counting the in-work benefits. With the chancellor’s axing of those benefits, the true “living wage” in London will exceed £10.
Surely the move to increase the minimum wage to £7.20 in April 2015 is welcome. But again, with the cuts to in-work benefits and tax credits, those at the lower end of the income scale will be worse off.
The biggest losers from the budget are the young people.
Firstly, they will not benefit from the increase in the national minimum wage.
It is already a disgrace to the principles of fair and equal society that a young person of 16 to 18 should earn, from October 2015, £3.87 per hour, while a person who is doing the same work, but is 21 years old or over, would earn £6.70 per hour.
The national living wage will only apply to those over 25 years old, leaving behind a lot of young people and deepening the divide between the very wealthy and the poor.
Secondly, the chancellor decided to take away the maintenance grant for students and replace it with an additional loan, which will increase the average student’s debt to £51,000 accrued after three years of undergraduate studies.
And then, anyone aged 18 to 21 will no longer be automatically eligible to claim housing benefit. This, in light of soaring rent prices, may leave many more young people unable to move to their first home, forcing many to live with their parents for many more years.
And the wealth gap between generations will grow even further.
Another loser in the budget is public sector workers. In South Holland and the local area, we do not have many people who stand to inherit properties worth over £1m. We do, however, have many public sector workers, such as teachers, nurses, council workers, and social care personnel, whose wage increases are capped at one per cent, leaving them to be paid less in real terms year on year.
The poor and the vulnerable will not benefit from the chancellor’s acclaimed national living wage. Many are disabled, unable to work, or otherwise impaired. They will lose out under the axe cutting of all sorts of benefits and tax credits.
The winners are again the big businesses retaining one of the lowest corporation tax rates in the world, the rich, the bankers and those lucky to have accumulated enough wealth.
So, is it not perhaps yet another budget presented by the government of the privileged for the privileged?