THE budget was announced by Philip Hammond on Wednesday and unravelled quicker than Theresa May's election campaign. The Conservatives billed the budget as a 'budget for the future' but during the speech in parliament, it was evident that it just underlined the omnishambles of the current government, their economic incapability and the weakness of Theresa May as Prime Minister.
Prior Wednesday's budget, there was speculation over contentious issues such as housing, welfare (notably, Conservative flagship policy, Universal Credit), the NHS, tax avoidance and of course Brexit.
Would Philip Hammond increase spending despite austerity?
Key projections
There is little being made of the projections from within the budget, in 2010, David Cameron and George Osborne first touted that the country must live within its means. The major rationale for austerity was that the deficit would be eliminated by 2015, however, Philip Hammond has now forecast that the deficit will be eliminated 15 years after in 2031. The ever-increasing standards of living and harsh austerity means that the average wage won't hit 2008 levels until 2025, with the poorest third losing £715 a year and the richest third will gain £185 a year over the next 5 years.
Furthermore, the average annual wage is forecast to be £1,030 lower in 2022 than was previously forecast just 8 months ago.
The national debt has doubled in the last 7 years and will continue to rise in the coming years, this is due to growth being below 2% in every forecast year for the first time in modern history. This is also far lower than any of the EU and OECD nations.
Headline budget measures
Beforehand, there was plenty of speculation over the NHS and nurses pay, but when it came to the budget, Hammond said he would only provide the money for the pay rise if the NHS pay structure is modernised.
The NHS estimates that it needs approximately £4 billion a year to plug the funding gaps but only received £1.4 billion per year. The budget also promised £44 billion on new housing, however, just £7 billion is new or guaranteed money. Hammond also said they would cut stamp duty, but will cost £900,000 per projected new customer, which is enough the build several new homes.
Plus, removing stamp duty will increase house prices by 0.3% (OBR), benefitting those already with houses rather than first-time buyers.
In a desperate bid to win back the youth vote, Hammond announced the introduction of the 25-30 railcard, unfortunately this won't benefit those who need it the most, commuters, because the discount cannot be applied during peak hours. There was very little for schools just a £117 million boost for mathematics and the training of more computer teachers, but it failed to address the severe financial constraints schools currently face. The personal allowance for income tax will rise to £11,850 but this will give the poorest only an extra £71 a month approximately, whereas the richest will receive approximately £385 extra a month.
Philip Hammond promised £1.5 billion to sorting out the problems with Universal Credit, that package plans to cut waiting times from 6 to 5 weeks, any household that needs an advance will receive a full month's payment within 5 days rather than half a month. The repayment period for those advances will increase from 6 to 12 months and claimants on housing benefit will continue to receive it for 2 weeks to smooth over transition. The major problem for all these changes is that they won't take place until next year, leaving millions of families uncertain over their future this Christmas.
There was also no mention of policing, counter-terrorism, security, social care, mental health, pensioners, child poverty, local government, the environment or clean and renewable energy.
Plus, he set aside an extra £3 billion for Brexit. The budget highlights the government's incompetence and lack of real leadership. Theresa May has no power, this is evident after her Chancellor has delivered a budget that lacked any real content, nothing has changed, and it will be the poorest in society who suffer whilst those in their ivory towers will continue to reap from the corruption.
