Listening to Phillip Hammond’s budget speech, and seeing people praising it as it was given, always worth remembering the first golden rule of budgets – you need a few hours / days for it to be understood.
And sure enough, the broken promise on National Insurance became the story.
And if there’s some sympathy because there’s an issue to solve, reflect on how Labour had to fight 2015 charged with being unprepared to make that promise.
Jezza has kicked off at the budget – it was sounding complacent and do have to say, ‘we are the party of the NHS’ when there are the issues there are (bed blocking, black alerts, long waits on trolleys, abandonment of 18 week targets, GP appointment problems) would be exhibit no. 1.
It’s the record numbers in work claim that confuses when so many people are seeking extra social security – or have already been written off by DWP procedures.
Claims of the richest 1% paying a greater share of the total income tax contribution is surely paralleled by the richest 1% earning a greater share.
Loads of analysis from many to come, but I also wonder if enough thought has been given to the potential of another economic crunch.
One final point, Midland Main Line electrification being deferred cos of concerns over Value for Money when new money has just been announced for road improvements to tackle pinch points on the road networks – which we have discovered before merely moves the pinch point. For our environment, we need the extra investment to go into mass transport.
From Chris Leslie MP –
10 important points from the Chancellor’s Budget yesterday:
1. The 2015 Conservative manifesto promised “no increases in National Insurance contributions”, yet Class 4 NICs on self-employed profits will rise to 11% in 2019, costing an entrepreneur on £27,000 over £30 per month. (Tory MPs not happy – I’d expect a u-turn on this before long).
2. Small businesses are hit by a ‘double whammy’ not just from higher NICs, but also a reduction in the Dividend Allowance to £2000 from April 2018, which means less take home income for the self-employed too.
3. The Brexit challenge barely raised a mention in the Chancellor’s speech. The OBR say that “when the UK leaves the EU, the trading regime will be less open than before” adding that any new free trade deals with third countries would not be enough to prevent “lower trade intensity”. The Government will also miss their targets on trade and immigration – so it’s no wonder Brexit is airbrushed from the Budget.
4. On education, a handful of ‘free schools’ get £1bn over the Budget period, yet all the rest of our schools get just a quarter of that – £260m extra between them – over that same period.
5. The Business Rates hot-potato is handed across to local councils, who will have to cope with the administrative nightmare of running a discretionary support fund taking bids from companies in their area.
6. The headline £2bn extra for social care is spread over just three years and phased out again by 2020
7. DCLG Local Government budget is cut by more than 20% from £8.2bn in 2016-17 down to £6.5bn in 2017-18, and then again down to £5.5bn in the following year
8. Borrowing is expected to RISE from £51.7bn this year to £58bn next year, according to the OBR. They add “The Government does not appear to be on track to meet its stated fiscal objective to ‘return the public finances to balance at the earliest possible date in the next Parliament’. The deficit falls little in 2020-21 and 2021-22, while the ageing population and cost pressures in health are likely to put upward pressure on the deficit in the next Parliament.” (page 6 OBR report).
9. GDP growth is expected to moderate this year are rising inflation squeezes living standards and consumer spending (largely flowing from the sterling depreciation since the Brexit referendum). Economy forecast to actually grow less than expected at the Autumn Statement.
10. This is set to be the worst decade for pay growth in two centuries of earnings data (according to the Resolution Foundation).