Despite Chancellor George Osborne's rhetoric his Emergency Budget was unfair and regressive. It fails to tackle the long-term challenges facing our economy.
3 million working families lose an average of £1,000 a year through cuts to tax credits. Even with a welcome increase in the minimum wage, now misleadingly renamed as the National Living Wage, many low and middle income households in Ilford and elsewhere will be worse off. The independent Institute for Fiscal Studies says the Budget takes far more from poorer households than richer ones and that ‘unequivocally’ people who are in work and receiving tax credits will lose out on average.
The emergency Budget also failed to address fundamental weaknesses in our economy. Britain’s continuing low productivity growth has been revised down for next year and the three years after that; the Chancellor is on course to miss his exports target by £367 billion by 2020. Our current account deficit is now at its largest peacetime level since at least 1830. Government plans to sell off housing association properties and also to raise the inheritance tax threshold to £1 million are the wrong priorities at a time when we have an acute housing shortage and many families and first-time buyers are struggling to get a home of their own.
The Welfare Reform and Work Bill effectively repeals the Child Poverty Act 2010 and also includes unfair measures which hit people who are sick and disabled. Reforms to cut the overall cost of social security, including a benefits cap and loans for mortgage interest support are necessary, but it would be better to cut the housing benefit subsidy to private rent landlords by increasing the supply of housing association and local authority social housing.