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Big Budget debate: Families worse off—or will dole queue be cut?

10:02 26 March 2014

Chancellor of the Exchequer George Osborne

Chancellor of the Exchequer George Osborne

PA Archive/Press Association Images

George Osborne’s Budget will throw families into poverty with higher rate tax, claims Labour. London Assembly’s Budget Chairman John Biggs says families will face further hardships with more benefit cuts to come. But Assembly Conservative Andrew Boff says Corporation Tax cuts will get more off the dole because wage bills to employers are going down:

John Biggs, London Assembly budget chairman and Assembly member for the City and East London, says the fifth Budget by the Tory-LibDem Coalition lacks measures to protect low income families and those struggling with the cost of living:

“The average family is now £1,600 worse off since 2010, largely due to the rise in VAT. And worse is to come in cuts to services. The government recognised that ordinary people are finding life tough—but have done nothing to address it.

“The good news for them, and us, is that it looks as if economic growth has returned to the UK.

“The bad news is, however, is that the benefits are not evenly spread. For many people, here is still no ‘feel good’ factor. Not only have household incomes for many stood still or been reduced, but some unavoidable costs like housing and fuel, which take up a bigger slice of earnings of those who have less to live on, have risen way beyond the headline inflation rate.

John BiggsJohn Biggs

“On top of this impact on personal income, the government’s policy for recovery includes further spending cuts which will hit those needing services more than those who don’t.

“We all know belts need tightening—but is the scale right and is it being done fairly? I don’t think so.

“On the other hand, it is vital that we encourage business investment and the Chancellor’s Budget includes some steps to do this. The ‘revolution’ in personal pensions needs some careful study, but will be good news for some—but many don’t have a pension beyond the State pay-out. Similarly for tax-free savings.

“There’s a hint that betting shops and payday loan shops will face some further restrictions, which is good.

Andrew BoffAndrew Boff

“There is support, but as yet no money, for a rail extension further out in east London that will help build new homes. But as yet there isn’t the public investment we need to build the new homes we need.

“So it is not all bad news. But for many the ‘improving economy’ is good headline news, but its warmth has yet to reach us.”

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Andrew Boff, Conservative London Assembly member and Tory Group spokesman for east London, defend’s the Chancellor’s budget as an opportunity to get more people off the dole queue:

“This was a budget for east London. Businesses that create employment for east London are competing in a global race for wealth, work and opportunity. The budget gives them a big boost in that race with the government cutting Corporation Tax to 20 per cent by 2015 — the lowest rate in the G20 nations, world’s 20 major economies.

“After doubling apprenticeships, the government is now increasing grants by £85 million for business to set up more, giving young people a chance to get practical qualifications on the job.

“This government has already helped create 1.2 million private sector jobs. But this Budget went further. The government will cut the employer National Insurance bill of every business by up to £2,000. That means they’ll be able to take on up to four people full-time on minimum wage without any increase in their jobs tax.

“Small businesses in Newham and across east London, which have done much to bring down unemployment, can now take on more workers.

“The Chancellor’s Budget also raises personal allowance to £10,500 next year, a tax cut for more than 25 million people. The average taxpayer will be paying £800 less each year because of increases in the personal allowance since 2010, with 3.2m of the lowest earners, including many in east London, will have been taken out of tax altogether.

“And with a promised extension to the Barking to Gospel Oak rail line to Barking Riverside, it signals the start of a huge development of 11,500 new homes for Londoners.

“Conservatives have proved their commitment to east London’s regeneration and creating jobs for a brighter future.

“It would be a tragedy letting Labour ruin it through their plans to increase the debt that this government has fought so hard to reduce.

“Newham and east London can look to the future in confidence rather than fear.”

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