“A government by the rich for the rich and of the rich” economist says.
Jeremy Hunt’s Spring Budget did little to address the cost of living crisis according to critics.
Jeremy Hunt announced his Spring Budget against the backdrop of the soaring costs of living, record high inflation and months of strike action. His Budget promised policies to boost the economy “Today we build for the future with inflation down, debt falling, and growth up.” In his final declaration he added: The declinists are wrong, and the optimists are right. We stick to the plan because the plan is working. And I commend this statement to the House.”
Despite his optimism critics say that the Budget did little to address the squeeze on household incomes.
Speaking in a personal capacity, a Coventry University professor of economics, Mansoob Murshed has said that the Spring Budget was a set of “plutocratic policies” that only benefit the rich. He added: “The growing inequality in income, health, and education has been occurring since the 1980’s. We have now reached a point where we have regressed into Victorian times, and we need to do something about it.”
An ONS graph showing changes to the Consumer Price Index
Key announcements in the Budget
- Pensions
The amount you can save into your pension in a year before being taxed went up from 40,000 to 60,000 and the tax threshold on lifetimes savings was abolished. The changes to pension tax are to encourage older workers to remain in the workforce with a special focus on NHS doctors.
- Childcare
The biggest announcement to the Budget was an expansion to childcare this included an increase in universal credit for childcare costs, and changes to the 30 hour free childcare allowance currently in place.
- Energy Price cap
The energy price guarantee which sets the limit a household can pay on energy bills in a year will stay at 2,500 till the end of June; It was previously due to rise to £3,000 from April.
- Welfare changes
Reforms were announced that would remove barriers that stop people getting back into work such as those with health conditions or older workers. The work capabilities assessment which is a heath assessment for those with health conditions. The assessment can affect people being able to work and claim financial support at the same time which often leads to them remaining unemployed.
- Additional policies included fuel duty and duty on draft beer will remaining frozen.
In reaction to the Budget, Paul Johnson, Director of the Institute for Fiscal Studies, chose to draw attention to the lack of policies to resolve ongoing strike action. He said: “Just as notable was what Mr Hunt didn’t announce. There was no funding to be found to improve the pay offer to striking public sector workers, where £6 billion might have been enough to make an inflation-matching pay offer possible this coming year. That’s a political choice. Money for motorists, but not for nurses, doctors, and teachers.”
Trade Union Congress General Secretary Paul Nowak said: “The Chancellor spoke about a high-wage and high-skills economy but did nothing to deliver it. The UK is still in the longest pay squeeze for more than 200 years. And our public services are still run-down and understaffed.
“We need a fully funded workforce plan across our public services to recruit and retain key workers. And we need an investment plan to rebuild services.”
In his response to the Budget, Labour leader Keir stammer said: “After 13 years of his Government, our economy needed major surgery, but his Budget leaves us, like millions across our country, stuck in the waiting room with only a sticking paster to hand. Our country is set on a path of manged decline, falling behind our competitors – the sick man of Europe once again.”
An ONS graph comparing UK inflation rates to other major economies.
Economist, Mansoob Murshed, commented on what he thought should have been addressed in the budget. He said: “I would have expected a little more expenditure on health and social services for public sector pay rises, even if it resulted in more borrowing. Because that is not a big issue for countries with big economies like the UK.
“I think there should have been more tax breaks for low-income earners, we have got more taxation creeping in because the tax thresholds are not being changed and this should be addressed.”
Finally adding: “The budget focussed on keeping the fanatical markets happy, that’s number one and then inflation comes second.”