Wednesday, 8 March 2017

On the Spring 2017 budget

The Chancellor of the Exchequer, Phillip Hammond (Conservative MP for Runnymede & Weybridge) today announced the first quarterly budget of 2017. As with all previous Conservative budgets, it is only good for big business and bad for everyone else. Here are the five most glaring fundamental faults with it.

1. Its lack of respect for women and women's issues.

Today is also International Women's Day and it has been reported that the budget will commit £20 million to support the campaign against violence perpetrated on women and girls, £5 million to next year celebrate the centenary of women getting the vote in Britain, and £5 million to support people returning to work after a career break (e.g. mothers who took time off work to raise children; decent childcare is often unaffordable for many women in work). This is not enough by any standards, especially when the present government has been responsible for closing many women's refuges and cutting help to vital services that can help women in danger from domestic violence and abuse (without any promise of reopening those centres in said budget), and has failed to help fund affordable childcare for women wanting to return to work; Nordic countries have much better support of this type by comparison, as well as a more child-centred and child-friendly education system.

2. It will hurt small businesses and the self-employed whilst letting large corporations off the hook.

This budget features yet another decrease in corporation tax-it will go down from 20% to 19% this year and drop to 17% by 2020 when the current parliament ends. Meanwhile, contrary to a promise made by the Conservatives themselves before the last general election, self-employed people will see a rise in their national insurance contributions (along with the abolition of lower-rate Class 2 NI for small enterprises trying to grow), and the tax-free dividend for directors of small businesses will be sharply cut from £5,000 to £2,000. There will be further undue pressure on small-medium enterprises (SMEs) by being required to report quarterly from now on instead of annually, even though tax and profits are calculated annually for common sense reasons. If there is a substantial economic downturn after Brexit (and there likely will be), small businesses and the hundreds of thousands of sole traders (market sellers, independent contractors etc.) will prove to be a vital lifeline for Britain to get back on track, so it is larger corporations that have been squeezing them out that should be taxed more heavily. More money can be obtained by raising taxes on larger businesses anyway.

3. It fails to commit to tackling climate change or achieving environmental goals of any type.

In fact, by reclassifying solar panels on schools and other public buildings as a taxable asset and removing their exemption, at a time when energy costs are rising and public services of all kinds are under increasing financial pressure (factoring in the fact freezes on public pay rises and benefits will remain in force), it will harm efforts to move towards a greener economy. The same applies with further freezes on petrol and diesel duty even though all like all fossil fuels they are environmentally unsustainable, responsible for tens of thousands of air pollution-related deaths, and will not be viable much longer. Instead, industries heavily responsible for climate change (like the aviation industry) should be stripped of existing tax breaks and tax exemptions should be introduced for demonstrably green industries and for green energy generators (not just solar panels but also miniature wind turbines and offshore generators using hydroelectric energy).

4. It will seriously harm disabled people and people who have been suffering from psychological distress.

What the media has failed to mention, in spite of a DPAC (Disabled People Against Cuts) protest that took place in London yesterday (and which was widely attended), alongside this budget is that severe psychological distress will no longer qualify for the mobility component of PIP, and that other cuts and freezes within this budget will hurt disabled people and people with mental health problems disproportionately (the unemployment rate for disabled people is 50%).

5. Important benefits and public sector pay is being frozen even though the British economy is growing-not contracting.

Now that the British economy is growing, all benefits should be increasing in line with the Consumer Price Index (CPI) but they are being frozen yet again with the usual exemption of maternity pay, state pensions, and disability benefits (which have already been hit hard by the DWP). This is at a time when housing costs are rising, the benefit cap is coming into force which hurts families considerably (especially when one or both parents are out of work due to disability and single-parent families), and when family-based tax credits are decreasing or disappearing. The British economy is growing so none of this should be happening-it is projected to experience a growth rate of >1% over the next few years, even with the current uncertainty over Brexit. I consider it a great shame that within Europe, Britain is the only growing economy where ordinary people's pay and benefits are still decreasing and still going to decrease. Any concessions made in this budget are far from sufficient to counteract the further pain it will cause for ordinary people like myself.

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