Its that time of year again where the Chancellor announces the budget for the year ahead. Its usually on the third Wednesday in March before the beginning of the fiscal year in April. There has been a mixed response to the 2014 Budget though we very much think it is a budget for makers, doers and savers. It centres the economy around those who are already in a privileged economic position, such as people who are able to have savings and occupational or private pensions.
Its another budget for the rich and by the rich with investment allowance in businesses increased from £250,000 to £500,00. There will be no employee national insurance contributions for people under the age of twenty five. Although this sounds like a populist policy, it is problematic. If you become unemployed, you can claim Job Seekers Allowance based on your previous National Insurance payments. If you haven’t paid any National Insurance, you get put on the basic rate of Jobseekers Allowance. There is also going to be a £7bn cut in energy bills for manufacturers. But what about families who are struggling to pay their fuel bills? For ordinary folk, fuel bills are rising eight times higher than increases in average weekly earnings, yet the Chancellor’s budget has mentioned absolutely nothing about help with fuel bills for ordinary people.
There is also a welfare cap of £119 bn set to be implemented from next year’s financial year. This is a poorly thought out economic policy because you cannot simply set a blanket limit on benefits because people’s access to social security benefits should be based on their need, rather than the government’s ideological need to keep public spending as low as they possibly can. The Chancellor has said he will leave pensions and jobseekers allowance out of the welfare cap. This then means that working tax credits, housing benefit and disability benefits are susceptible to cuts. This means that the working poor will be targeted because it is predominantly working people who claim benefits such as housing benefits and working tax credits. But perhaps, if people were paid a fair wage and had decent, secure, well paid, jobs then there would be no need for them to HAVE to claim in work benefits. Benefits such as working tax credits are bittersweet. Yes, they top up incomes, but they cover up the fact that people do not earn enough to live. Again, many people were expecting a rise in the minimum wage to £7, but no such luck this year. A rise in the minimum wage would have a knock on effect for the benefits bill in the UK.
Duty on beer is to be dropped by 1p and Bingo duty is to be cut to 10%. A very populist policy for working class people, but I can’t help but think this is how the Tories view the working class. As beer swigging, bingo playing masses.
But gee, thanks for that Tories. Whilst my parents struggle with higher fuel bills, a public sector pay freeze and the rising cost of food bills, George Osborne has rewarded them with a tax cut that they don’t even need. If my dad buys 299 pints of beer, he will eventually get his 300th free. Well done, George. You really know what working people want.
There is also a planned rise in income tax threshold. As a socialist, I believe everyone should pay tax. For some bizarre reason, many people in the UK have some kind of fear of income tax, seeing it as the “taxman” taking their hard earned money. By all means, don’t pay any tax if you don’t want to pay for your children’s education, or your healthcare. Don’t pay any tax if you don’t want an old age pension or out of work benefits. Please realise that the contribution you pay goes towards creating social security for yourself, as do your national insurance payments. People who earn below a minimum wage tend to use public services more than those who are on higher incomes, as they are more likely to have poorer health. However, poor people disproportionately pay more VAT than they do income tax. Its highly interesting then, that the Tories put VAT up to 20%. At the beginning of the financial crisis in 2007-8, Gordon Brown cut VAT to 15% and this encourage consumers to spend more money. Its clear then to see what side these Tories are really on.
Lastly, there is new policy on pension lump sums where the amount that can be taken out rises from £18000 to £30000. This to me seems very laissez faire and reckless. Cash and stocks ISAs are also to be merged and the limit for tax free savings is to be put up to £15,000.
I don’t know about you, dear reader, but I am probably NEVER going to have £15000 of savings in my life and I don’t expect a lot of people will.
Where is the policy to tackle youth unemployment and the policy to help those with rising fuel bills? Its all very well to put beer duty down by 1p and bingo duty down to 10% but ordinary people don’t have the money to go around spending it on beer and bingo. We need this government to look at fuel bills. We need this government to make the rich pay their fair share of tax. But they won’t, because they’re Tories, and the only people they were looking out for in this budget are the people who send them Christmas cards every year. The people who already have money.