Now that the dust has settled a little after what has been the most haughtily discussed budget for many years, we would like to take a quick look at what some of the announcements mean for job seekers, wages, and employment.
In the opening of his address to parliament, Chancellor George Osborne claimed that this would be a ‘Budget for hard working people’- a claim which almost made me fall off my swivel chair.
You see I have reported on many budgets in my time, but never before have I been quite so engrossed in the potential impacts they were likely to have. Even before the Conservative party won their first House of Commons majority in May, this was billed a budget of cuts to the welfare system. Now without the moderating hand of the Lib Dems, staying the Chancellor’s axe from the most devastating of blows, the man with the little red briefcase, was to be given free run with the country’s money, and the lives of millions of people.
Would he make the right decisions? Would he present the Conservatives as a party of the people, and not the privileged few? Would he ensure that hard-working low paid people weren’t disproportionately affected by his cuts? Would he help the economy progress to one where wealth is more evenly distributed amongst the people? Would he realise that the £12 Billion of cuts earmarked for the welfare system, represented a drop in the ocean of public finances, but would have a devastating effect on millions of people? Would he realise that hard-working people have suffered quite enough over the past decade, and deserve a little slack now that the economy is growing again? Would he realise that the very point of a strong economy is to improve the living standards of the people?
No…of course he wouldn’t. Despite all the rhetoric, constant assertions of ‘We’re all in this together’ and Iain Duncan Smith loudly applauding like some demented circus seal, George Osborne has thrown the baby out with the bathwater, and confirmed, as suspected, we are not all in this together. Check whether you will be one of the millions of people worse off because of this budget.
Here are the main points affecting employment, and wages:
- Personal allowance to rise to £11,000 next year and to £12,500 by 2020
- Threshold for 40p rate of tax to rise from £42,385 to £43,000 next yea
- Tax credits and Universal Credit to be restricted to two children after April 2017 (Only affecting children born after this date)
- Income threshold for tax credits to be reduced from £6,420 to £3,850
- Working-age benefits to be frozen for four years
- No more automatic housing benefit entitlement for 18-21-year-olds
- New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020
- Low Pay Commission to advise on future changes to rates
In any other circumstances, I would be singing the praises of any Chancellor who vowed to introduce a national living wage as high as the one which he has committed to. Indeed it is expected that this rate will rise to over £9 an hour by the year 2020, representing a £5000 per annum pay rise for some of the lowest paid people in the country.
But any benefits brought by decent improvements in wages, and a rise in the personal allowance, must surely be written off but such aggressive welfare cuts. Consider also the fact that the rise in wages is to be phased in over the next 5 years, whilst the £9 living wage won’t be fully implemented until 2020, and you would be forgiven for wondering what all the celebration is about!
It’s a pretty shameful situation that in the 6th richest country in the world, working full time doesn’t pay enough to earn a decent living. The Chancellor billed his budget as an opportunity to create a more equal economy, but quite frankly I can’t see how any of his announcements will go any way towards achieving this.
I just wonder, by 2020 how many hard working, low-paid people will actually be better off than they are today… not many I suspect.
1 down, 5 to go…