The Budget. It’s probably not a date marked in the diary of the average person, but the implications of it will no doubt be felt in every corner of the Lancaster and Fleetwood constituency.
This emergency summer budget, the first Conservative one in about 20 years, will be no exception.
George Osborne applied very tight fiscal policy; big spending cuts, some tax increases and a reduction of the impact of government on the rest of the economy. It isn’t just economics, though, this budget was as much about politics as it was about economics, the talk of low tax and low welfare spending, with a huge reliance on the private sector stepping in to fill the gap of a reduced public sector.
The Institute for Fiscal Studies have crunched the numbers and we know the poorest will be hit hardest, the decision to cut tax credits will hit about three million families. The government should not underestimate how important tax credits have been to many people on low incomes, and cutting them will have severe implications for people’s household budgets. The poorest 20% of households will lose over £1,000 p.a., particularly those with children.
My inbox and mailbag have been full of correspondence on the £12 billion of welfare cuts. I’m particularly concerned that limiting child tax credits to the first two children will undoubtedly push more children into poverty. There is no excuse for child poverty in a country as rich as ours.
In my speech on the budget, I also raised concerns for the 3,000 children on the adoption waiting list. Many children will be adopted into families which already have children – and the prospect of poverty will do nothing to encourage families to adopt.
I’ve also been hearing a lot from younger people. It’s not right that the young are the ones really being hammered – now we know there will be no housing benefit until 21 years old, the new minimum wage will not apply until 25 years old, and the poorest students’ grants will be turned into loans passing more debt on to the those least able to pay back.
Relatively unnoticed was the lifting of the cap on tuition fees which currently stand at £9,000 p.a.