Thursday 9 July 2015

The Budget: in which the Chancellor says many fine words but still screws the poor

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.

Wednesday 8 July 2015

Libdemmery reading list

This is today's snapshot of an evolving repository. A reading list almost randomly thrown together of articles, books and statements which will help to understand what Libdemmery is all about. If you join Diigo and log in (it's worth it) you can annotate these items in a Diigo outliner, and join in discussions about them. If not, just read them; your time will be amply repaid.

Additions are always welcome. It's a living list.