July 8th, 2015. The day that Chancellor George Osbourne revealed his ‘emergency budget’ in parliament. I’m still unsure of the exact nature of said ‘emergency’, but there you go.

I read lots of speculative pieces, and most of them were right in their predictions. I think my favourite headline of the past week is this one, in which Osbourne announced that £20 billion in welfare cuts had been found. Clearly it had ran away from home or something.

So, what did the first Conservative-only budget in nineteen years pledge? You can find out what it means for you here.

After much analysis, I have found a few issues with this budget (surprise, surprise).

Maintenance grants becoming loans

I think that the student loan system works. Ideally I’d want no tuition fees but apparently that’s not possible. What bothers me about the movement from grant to loan is the security that the maintenance grant gave students that were from lower income backgrounds. I am very aware that no repayments have to be made until students are earning £21,000 a year and above, but this seems a bit mean to me, especially coupled with the increase in tuition fees. The Russell Group are welcoming this rise, which says to me that fewer students from poorer backgrounds will be attending the top universities now. As I’ve said, I’m aware that the system does not expect repayments unfairly, but the idea of starting life with even more debt now will definitely be off-putting to some.

Introduction of a National Living Wage

The one thing that is bugging me about this pledge is what the Chancellor has called it. The new “living wage” is in fact, not a living wage. The Living Wage Foundation states that for London in 2014, a living wage would be £9.15, and for the rest of the country, £7.85. Osbourne’s new wage will start at £7.50, which is below the 2014 Living Wage for the entire country. The 2020 goal of £9.00 is still beneath the 2014 Living Wage for those living in London. Furthermore, this will only be available to those over 25 years old, and most importantly, does not take into account the in-work benefit cuts that Osbourne also announced today. To me, calling this a Living Wage is a definite media ploy and a way to one-up Labour’s election pledge of an £8 wage by 2020. Its name is also a plain lie.

Cap on public sector pay

The Conservatives has been vocal in their dislike of trade unions recently, but I’m afraid they’re going to have to deal with them more regularly if this 1% pay rise is anything to go by. Private sector workers are seeing their wages increases by more than 1%, and just last month, MPs were offered an 10% pay rise. I think that politicians’ pay rises should be capped at the same limit of public sector workers.

Tax On Environmentally Friendly Cars

I simply do not understand this one. Are the Conservatives trying to speed up global warming? Sure, eco-friendly cars aren’t going to stop climate change but they certainly help. Now, there is little incentive to buy green cars and that’s pretty sad when we’re still subsidizing businesses like Amazon who were involved in a tax scandal (which links with the cut in corporation tax, another move I find ridiculous).

In 2012, Amazon was attacked by MPs on parliament’s public accounts committee for avoiding UK tax. Yet in the same period, the online retailer was awarded £16.5m in grants by the administrations of Scotland and Wales to help build distribution centres. To link the Wales plant to the transport network, the Welsh assembly built the mile-long “Ffordd Amazon road” at an additional cost of £3m.

The quote above (and an interesting article) can be found here.

Changes to tax credits

I was pleasantly surprised by what Osbourne said about tax credits, that the government shouldn’t be subsidizing low pay. For a change, I agree with him on something! Nevertheless, the practicality of his budget falls very, very short of helping working people. I sat with my mum using this calculator to see the effect of the budget. Here it is:

Screenshot (50)

To our family, this will be more than hard to deal with. The Conservatives says they are helping the working class. How is thats shown here? My mum works extremely hard and she looks after me and my sister on her own. The rise in minimum wage will not balance the cut to her tax credits at all. As a working person, my mum is not being rewarded in the slightest, and I imagine this will be the case for many working people across the country.

Good bits

There are some things I can agree with. The non-dom changes are very important and I’m glad they are being put into place after the pledge from Ed Miliband on this in the election campaign. Freezes to fuel duty and an extra £8 billion funding for the NHS are also welcome additions.

Furthermore, I applaud the movement to a higher wage but not a Living Wage, because that is most definitely not what the Conservatives are giving us. It is miles away from the projections of a real Living Wage and their use of the term is already, not even a day on from the budget, attracting headline attention across newspapers and websites. *insert angry noise here*

Overall

This budget was supposed to be bold, and I suppose it was, just not in the ways I was hoping for. It’s certainly not helping people my age (let’s not forget the 18-21 benefits cuts) or my family. Thanks George. Not.

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2 thoughts on “Summer Budget 2015: Thoughts And Analysis

  1. I glad that he has reduced the tax relief available on buy-to-let. It should have been scrapped altogether; but let’s not forget that it was New Labour that started the buy-to-let boom.

    Like

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