It
was a very successful budget. It did what it set out to do. It was a
very political budget from a political master. George Osborne doing
what he does best - wrong footing the opposition by fixing the
narrative in his terms and burying inconvenient facts.
The
tax threshold rise is good but not as progressive as a rise in the NI
threshold would have been. The National Living Wage is also a good
thing, but I have not yet seen an analysis of who will gain what
after reductions in tax credits and housing benefit are factored in.
I suspect Osborne has some stats tucked away which tell him that the
NLW will be more than offset by those other changes. It is still
ultimately a redistribution of relatively little amounts of money
among the less and the least well off. And the pain will be
widespread: the IFS estimates 13 million families will lose money as
a result of the benefits freeze. And as far as corporations are
concerned, the biggest will by more than happy about reductions in
corporation tax that will sweeten the burden for them. And the NLW is
a masterly piece of Osbornism, nicking the term for something that is
only a slightly expanded Minimum Wage, well below what a living wage actually is.
I
do not think that Osborne has any intention of being nice to people.
The neoliberal project is about keeping the bulk of the population
just precarious enough - insecure enough not to complain, but not so
insecure that they have nothing left to lose. I suspect Osborne
realised that previously mooted plans went too far and has pulled
them back into viable territory. When the NLW rises to £9 in three
years time, he will get a double benefit. He gets the benefit now
from announcing it; then he will be able to get the benefit again,
and twice over “This year we are raising the NLW to £9 an hour
(pause for cheers and waving of order papers from the Tory benches, and maybe a modest fistpump from Iain Duncan Sixpack).
But is it only fair that if people are earning more....” - followed
by announcement of a further squeeze on tax credits or housing
benefit or some such.
Housing,
and the wealth tied up in it, remains the unspeakable conundrum. The
rise in inheritance tax allowance will benefit only a tiny minority
(some reports suggest 8%) but will be loved by many who still think
they will be among the few who will make it to the top, while the
cuts in housing benefit and rise in rents for social housing tenants
will make a lot of renters much worse off. (An example given on Ekklesia today: “A lone parent working 16 hours per week with two
children will gain just over £400 from Chancellor Osborne’s
‘living wage’, but will correspondingly lose £860 via tax credit
changes in 2016/17”.) While taking a little heat out of the pension
market, the Chancellor remains intent on pumping up the housing
bubble, perhaps in the belief that it will never explode. Or perhaps
he will stop when the housing market has been entirely privatised.
Probably
the most significant incident during the speech was Iain Duncan
Smith's repulsively pugnacious fistpump when the National Living Wage
was introduced. It has been variously reported as delight at the
introduction. But it is not. That expression is the face of the
bully, not the patron. He was overjoyed indeed, but not about workers
getting a slightly more fair deal on pay. He was delighted at Osborne
having shafted Labour (and the LibDems, it must be said).
It's
not a great budget actually, not the game changer it has been said in
some places to be. Rather, it is consistent with everything else the
Tories do, a significant step but only one in a journey on which the
Tories and their neoliberal chums are taking us and the rest of the
world. It shifts us even further from the idea that welfare is
affordable and in fact necessary in an economy where most people's
jobs are precarious. Benefit claimants are people, and respectable
people at that. All but a tiny minority are not in work because they
cannot work or because there is no work to do. The benefits they
receive are expensive but eminently affordable given the wealth that
Britain possesses and creates, even in times of recession and
recovery. But that wealth still goes to the top, and the top is still
unreformed. It is significant that on the day of the budget Barclays
Bank got rid of its reform minded CEO, in a move brilliantly analysed by David Boyle. Reform of the banks is completely off the agenda,
given no mention in the budget but a cosmetic change that may well
(Boyle again) make things worse for ordinary customers rather than
better. And it's a lot more than the banks - corporate welfare
remains untouched, and indeed unspoken about. (The Guardian discusses it, but Labour does not say a word.)
And
nor do we speak of the miserable bedroom tax, the painful and horribly ineffective Work Capability Assessment, the vindictive
sanctions regime or the awfulness that sees hundreds of thousands of
children, women and men reliant on food banks in one of the world's
richest countries. While the LibDems were in coalition, we helped
Osborne and Duncan Smith move us along this road. Now, for the sake
of the precarious half of the country, we must find alternative
directions.