 A smug-faced Chancellor Osborne lived up to his Mr Bean looks Wednesday delivering another crackpot budget.
The spin and hyperbole were as always spot on but as usual the devil is in the detail and it did not take long for the July 8 budget to be ripped apart at the seams. Young people took a huge financial hit in the budget but so did the 'working poor'. Unless you are earning a wage that takes you out of benefit entitlements entirely expect a hit. You can be quite well off and still get free school meals for your child until they reach a certain age and that one is thanks to the previous coalition government. Whether it will be maintained in the long run who can tell. You can also get up to 30 hours of free childcare, announced July 8, but there the 'generosity' toward families ends. From April if you dare to have a third child while in receipt of benefits it will be ignored. There will be no additional benefits to help with the cost of the child. If after April you become unemployed and already have more than two kids the same applies. Will the first instance increase the number of pregnancy terminations in the UK? Iain Duncan Smith, the loathsome man behind most of the welfare cuts, is a father of four. His wife is Elizabeth "Betsy" Fremantle, daughter of the 5th Baron Cottesloe and they live in a country house belonging to his father-in-law's estate in Swanbourne, Buckinghamshire. His wealth is estimated in excess of £1m, and it continues to grow by after-dinner speaking for a fee. That brief bio illustrates why this man can never relate to the ordinary working public of the UK. He was challenged to live on £7.57 a day, or £53 a week after saying it was easy for people to do so. He refused and became petulant. More recently he made headlines after it was revealed he claimed £39 for a breakfast on his parliamentary expenses. On July 1 we reported Iain Duncan Smith’s official parliamentary credit card was suspended after he ran up more than £1,000 in expenses debts, according to records. In other words he hasn't a clue how most people live. He was kept in the shadows during the 2015 Tory election campaign as he is universally disliked. Related: One nation emergency budget attacks young people Pre-election report at our archived site Vile Iain Duncan Smith another reason to remove the Tories
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Stealing again from the Labour manifesto Osborne said a National Living Wage will become law but in Osborne's case that simply means re-branding the minimum wage as a national living wage and few positive changes in real terms. The 'national living wage' will be £9 an hour at least by 2020 announced Osborne but what will that figure be worth five years on? If you are aged 25 and over it will be £7.20 by 2016; but if you are aged under 25 expect to take a hit. Those aged under 21 are left out in the cold literally. Housing benefit for under-21s is being scrapped. As someone married at 20 plus with both parents dead by the time she was 23 I wonder how that can be viewed as fair and a one nation policy? The current over 25's minimum wage is £6.50 an hour and many workers receive tax credit income top-ups. The double whammy is tax credit thresholds are being cut-in other words Osborne is giving with one hand and taking away with the other and the overall winner is the treasury. 18-21 year-olds will be obliged to earn or learn and they will not receive housing benefit if they live away from home. The new Universal Credit due to replace six working age benefits is being rolled out but again young people are excluded. Expect Iain Duncan Smith's UC to be tweaked once it is in place. Any IDS tweaks will be negative if you are unlucky and have to claim financial help from the state. Osborne obviously expects parents to step up to the mark and fund their children into adulthood but that is not practical for all. The following is from the government's own website and shows how times change: Young people will receive greater incentives to get into work under Universal Credit, Minister for Welfare Reform Lord Freud said today (8 June 2012). That article is headed "This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government" and we are now experiencing a Tory party budget pure and simple.
They no longer need that 'incentive' to make young people work as the lifeline of benefits is cut. Measures announced and promoted by Chancellor Osborne as fair are far from it. He may believe that making young people stay at home further into adulthood is the right move but people are not a one-size-fits-all. Just because some young people stay at home until they have a career, prospects, money in the bank and more does not mean those options are available to all. Final thoughts Employers may now opt for younger workers who will be cheaper. But what happens when they reach 21 or 25? You may say it is fair that you earn less until you are more experienced in the workplace but that applies to all new employees of all ages. As retirement ages are pushed up in the UK expect more older people to be out of work. As social security is abandoned they will be left to sink or swim. No matter what scenario you look at this budget is flawed but then it is a typical Tory budget. Check out Guardian Daily Mail
 Osborne scaring kids at a London nursery - Photograph: Oli Scarff/PA Devolution is being rolled out across Scotland, Wales and Ireland with mixed success rates. The Tory dream is to devolve powers further from Westminster and Osborne began by praising the planned Northern Powerhouse expected in Manchester.
Regions of the UK can opt for such independence also but one condition is an elected Mayor. That surely will add another layer of costly bureaucracy? In the long run Westminster for London looks like the Tory dream while the rest of us are left to plod on. One nation? I don't think so. Regions should be careful what they wish for with this one. Tories like Cameron and Osborne never make such plans lightly. Stronger Economy Next came the economy and one of many brief party political broadcasts on behalf of the Tory party. According to the Chancellor many jobs have been created and this government is committed to creating 2m more but we wonder how many will be 'real jobs'? Here in Yorkshire too many local people are employed on zero-hour or temporary contracts while many others are only contracted to work part-time. Osborne used his speech about jobs to attack Greece and claim that is what happens in countries with spend happy governments. OBR The followed a series of figures and predictions supplied by the Office for Budget Responsibility; an allegedly independent body; it was however created by the government in 2010. UK Growth according to the OBR was 3% in 2014 and much better than in the USA and China. OBR predictions on this one are:
The Chancellor is aiming for a surplus not a deficit by 2019/2020 and wants a commitment for future governments to maintain a surplus except for in exceptional circumstances. Does he mean like another global economic crisis of 2008? He touched on bailed out banks returning to private ownership but that is expected to be a money losing measure at least in the short-term. More figures followed on the country's finances and borrowing predictions. Chancellor Osborne took time out to stress the rich are actually paying more under this government and that we are 'all in it together' no doubt to hoots of laughter from viewers across the country. Explaining that he will meet his promised quota of cuts with £12b from the welfare budget and £5b from catching tax avoiders and fiddlers next we thought we would break this report briefly so you can check out Channel 4's scoop Tuesday re the Chancellor’s family firm, Osborne and Little and allegations of tax avoidance. Channel 4 reported Tuesday "George Osborne family business' £6m offshore deal" ; check it out but be warned it may make your blood boil. You can watch a full report here. But Osborne glossed over his words that there will be £34b worth of cuts in total so there will be more financial pain in 2020 if the Tories are re-elected. Public Sector pay More than once today Osborne said he wanted to reward the hard-working people of the UK but he obviously does not include public sector workers in that description. They will endure an extension of their current pay freeze; rises will be capped at 1% for the next 4 years, at least. Maybe when the 2020 election looms he will offer them a carrot? NHS The 'Stevens' plan will deliver efficiency saving in the NHS but Osborne will add an extra £8b in funding by 2020. This is on top of £2b announced previously. Tax evasion or aggressive avoidance Osborne claims ongoing work is recouping money and the service will receive additional funding to chase tax dodgers. Non Dom Status The ludicrous ability to claim permanent Non Dom status in the UK and avoid tax will be scrapped. That was one of Ed Miliband's key manifesto pledges. Corporation Tax and Bank levy Dates Corporation tax becomes due will change but the tax will be reduced making the UK a giveaway country or as Osborne prefers to call it 'open for business'. The tax will be cut to 19% by 2017 and by 2020 will be down to 18%. The current bank levy will be reduced over six years but an 8% surcharge will be payable by banks of profits. Various Support for the military will be improved; there will be expensive memorials to the victims of terrorism; the RAF group fighter command system in London that helped stage the WWII Battle of Britain will receive money for repair, thanks to London Mayor Boris Johnson pointing it out to Osborne. Good to know this historic Britain will be saved for the Nation; a nation where homelessness is on the increase! Vehicle Excise Duty changes will come into force and the money will be used to repair and replace roads, which was the initial purpose of this tax. Green cars will not attract and lower duty. Fuel duty will be frozen for a year. Apprenticeship levies in large firms but more money to fund training. Students who need maintenance grants will be out of luck as these will be replaced by loans in 2016/2017. For the Queen's 90th birthday there will be a new wave of University professorships but at a cost presumably. Sunday trading laws will be determined locally. That will be bad news for small shop owners as currently it is one day of the week when they can outdo large supermarkets of stores. Vague claims there will be more homes but Housing Association tenants will now have the right to but extended to them depleting housing stocks further. Tax perks for buy to let landlords will be restricted and the changes phased in. Rent a room tax relief raised. Inheritance tax This is one core Tory principle. From 2017 the allowance will be increased by £175,000 from £325,000. If in old age you have to downsize your property your money is protected. Pensions State pensions are safe at least for now. But Osborne has announced a Green Paper which will look at funding future pensions and how to encourage young people to save for their pension. A decent return on any savings rather than the pitiful 1& more or less currently may help. Renewables This government is not Green and will cut so-called climate change taxes. Universal Credit Working age benefits are being replaced by UC which is being rolled out across the UK. It is Iain Duncan Smith's baby and he was gleeful in the Commons Wednesday as various key announcements were made. Welfare, children and parents Working parents will be able to claim up to 30 hours of free childcare. High income earners, £30-£40,000 a year and above will have to pay the market rate if they rent social housing. Working age benefits are frozen for four years. Income threshold for eligibility to Tax Credits reduced. ESA or employment support allowance is removed from some claimants. Osborne claims the disabled, poorest and vulnerable will not be affected. The benefits cap will reduce from £26,000 to £23,000 but £20,000 outside of London. 18-21 year-olds will be obliged to earn or learn. They will not receive housing benefit if they live away from home. Families who decide to have three children or more:
Life is rarely black and white but always shades of grey. Thursday a Work and Welfare Bill will be published. High income taxes Osborne is committed to reducing the taxes paid by the rich. From 2016 the starting point of paying a higher tax rate will increase from £43,000 to £50,000. Expect further cuts during the next five years. Minimum wage Stealing again from the Labour manifesto Osborne said a National Living Wage will become law. It will be £9 an hour at least by 2020. If you are aged 25 and over it will be £7.20 by 2016. If you are aged under 25 expect to take another hit. Some improvements to the personal allowance as long as you work more than 30 hours a week may also improve basic incomes. Overall Osborne did say that the UK has committed to its NATO pledge of 2% of GDP for the coming years but of course other countries such as Germany have not been fulfilling their committment. He also said the International aid budget would be maintained. That is the gist from having watched the Chancellor deliver his budget. There will be other minor details. Remember those who may receive a better NLW rather than the minimum wage m ay also take a financial hit if they have more than two children and claim any in work benefits such as tax credits. In the end he is giving with one hand and taking back with the other, especially when it comes to some sections of the British population. The Daily Mirror has it right with the title of their report - Budget 2015: Con-servative George Osborne isn't fooling anyone - he's quashed the aspirations of millions Note: Analysis Thursday
Check back later for the details. Although Osborne will push his budget as good economic sense, probably using Greece's debt woes to further his cause, money is not in short supply but the distribution of wealth has changed considerably. Channel 4 reported Tuesday "George Osborne family business' £6m offshore deal" ; check it out but be warned it may make your blood boil. You can watch a full report here For now let's leave this report with a news report from Global Research earlier this week that relates to the debt crisis over in Greece: By Jubilee Debt Campaign / jubileedebt.org.uk
He used Greece to push vague reasons for ensuring the UK is fiscally responsible and does not damage business but was it anything more than eloquent political spin?
There have been a series of pre budget leaks and predictions about what the Chancellor's budget will deliver Wednesday but some indicate it will remain more about hitting the poorest of the UK. As the Guardian reported Friday "Inheritance tax giveaway to feature in first Tory budget alongside welfare cuts". All but the wealthiest households in the UK will be lifted out of inheritance tax. Once again Tory priorities are telling. "Budget to cut 'housing subsidies' for higher earners" reports the BBC which may hit some Tory voters but think about it. The fat-cats of the UK do not live in social housing do they? Of course any newly elected government wants to keep at least some of its core promises to keep its voters on board. If you have been elected on a series of promises and fail on each one the electorate should remember the next time you want their support. In the run-up to the 2010 General Election the Tories promised they would not raise VAT, value added tax, but it was one of the first things they did. It was raised to 20% where it remains with little likelihood of a reduction but every chance of a further increase maybe indirectly by what comes under the VAT umbrella. But VAT was never going to be high on the agenda of hard-line Tory voters. It is something that again hits the poorer sections of the UK and is indirect taxation which is glossed over when the Chancellor announces other direct taxation cuts. Osborne is good at political spin and he was on top form as far as that goes Sunday; he faced few if any real challenges from Andrew Marr which of course helped. The Welfare budget will be capped at £23,000 in Wednesday's budget but it will be less outside of London. That is a reduction from £26,000 with obvious implications. While that may sound a lot it is a misleading figure. We are all individuals with individual needs. What will say it all about his new government is if the expected 'welfare' or to give it its proper name 'social security' cuts include attacks on the incomes of vulnerable and disabled people. "Separately, the chancellor is under pressure from a group of about 160 Conservatives to reduce the top rate of tax further for those earning more than £150,000 a year from 45p to either 42p or 40p" but will he feel able to deliver that while announcing Social Security cuts worth £12 billion or more? This is Osborne's first pure and simple Tory budget; previously he has been held in check by Liberal Democrats who were part of a five-year coalition. This budget is down to Osborne, with a little help from PM David Cameron as he noted Sunday; but who else is pulling the Tory strings? Follow the money trail to find an answer to that one.
Prescribers are also conscious of costs these days and the drugs issued tend to be the cheaper versions. Currently the cash-strapped and in demand NHS reportedly wastes a great deal of money prescribing drugs that are either not taken at all or taken ineffectively. Discussing this latest measure on Question Time Thursday the issue of who owns drug companies and their drug pricing was part of the debate. The NHS could become truly cost-effective if big Pharma were by-passed and the British health service developed and provided its own drugs. Perhaps that should have been invested in many years ago but surely it is still possible. But the debate highlight came from an audience member who asked if the Queen would now have 'funded by the UK taxpayer' stitched into her crown and commented perhaps MPS should also have that phrase stitched onto their ministerial work wear. NHS prescribed drugs will now carry a type of warning, similar to health warnings on packs of cigarettes, to remind people; but why taxpayer funded and not a reminder to 'please complete this course of treatment' or similar? Prescriptions are not free to all in the UK and there is a charge of £8.20 an item, more for certain items. You can reduce costs if you are not eligible for any help with prescription costs by buying a PPC, prescription prepayment certificate; if you regularly are prescribed multiple items on prescription this can save you money. At time of writing prescriptions are free or reduced;
But the above list may change.
Social security is under constant reform and prescription charges tend to increase but never reduce. We are days away from Chancellor Osborne's 'emergency budget' when he is expected to announce a series of tough austerity measures to help fix the mess he inherited from himself! Osborne is considering many measures including taxing disability benefits, a low blow even for this Tory government. Tory priorities post May 7 have shown where their ideals lie and it is with corporations, banks and business. Is labelling NHS drugs 'funded by UK taxpayers' vital and a priority? Will it work or will it alienate those who currently are in the 'free' group? You may not pay for your prescription now but over many years you will have helped fund the NHS with your taxes; and at that time you may have hardly used the NHS if at all. But how much will this 'reminder' to take your meds cost and why UK taxpayer funded? |
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