Tory budget not a barrel of laughs

18th March 2017

Budget2017

 Photo: UK Prime Minister, Theresa May, and Chancellor Philip Hammond find amusement in a dire budget

It is ironic that UK Chancellor, Philip Hammond, chose International Women’s Day, 8th March to deliver a budget that is likely to hit women harder than any other section of the population.  The overall impact upon working families was to leave them, on average, £1,400 a year worse off.  The reality is that for many, the family budget is managed by women, so the impact will be significant.  As primary carers in many family situations women will also bear the brunt of the underfunding of the NHS and the spiraling crisis in adult social care.

Many women are also among the 2.5 million self-employed people who were to be hit by the Chancellor’s proposed rise in national insurance contributions.  However, this is one effect of the budget which will not be of concern as, just a week after being announced, it was scrapped.  The collective outrage of the Tory press, ex-Chancellor Lord Lamont and pressure from the Labour front bench all added up to one of the fastest climb downs in budget history.  At the beginning of Prime Minister’s Questions on 15th March, Prime Minister, Theresa May, confirmed that the planned national insurance increases had been scrapped.

Hammond had announced his humiliation in a letter to Tory MPs stating,

“It is very important both to me and the Prime Minister that we are compliant not just with the letter, but also the spirit of the commitments that were made.  In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 national insurance contributions (NICs) set out in the budget.”

Characterised as a tax on “white van man”, seen as natural Tory voters, the NIC backdown was a far easier concession than taking the trouble to address the structural crises in both the NHS and local government, which have been brought on by the enforced austerity agenda of the past decade.

In financial terms the £2bn over four years, which would have been raised by the NIC increase, is not a major dent in the economy.  Hammond, assuming he remains in post, will be able to paper over the cracks.  Redirecting some of the estimated £70bn worth of tax breaks, which the wealthiest and big business will enjoy, may be a start.

Politically however, having the centre blown out of your first budget does not augur well for the wider perception of Hammond’s competence, by either his own side or the opposition.  As the week progressed though Hammond was quickly becoming the least of the Tories worries.  Barely had the Queen filled her pen to give Royal Assent to the government’s Brexit Bill when Scottish First Minister, Nicola Sturgeon, weighed in with an announcement of plans for a second referendum on Scottish independence.

May’s response has been to state that “now is not the time” for a re-run of the 2014 vote and that, a further referendum will not be considered until after the UK has left the European Union.  Sturgeon described the government position as a “democratic outrage”, going on to suggest that,

“History may look back on today and see it as the day the fate of the Union was sealed.”

Sturgeon is always quick to spot an opportunity to write herself into the history books.  The prospect of Brexit, argues Sturgeon, materially changes the basis upon which the 2014 referendum was conducted.  With Scotland having voted against leaving the EU in 2016 it should not now be forced to do so.

That Sturgeon is a dyed in the wool nationalist is in no doubt and something that she would not deny.  Quite what the advantages are for the Scottish people in trading an unequal union with the United Kingdom, for an equally imbalanced union within the European Union, is not clear however.  The smaller economies within the EU just about keep their heads above water, Greece, Portugal and Ireland being prime examples.  Even bigger economies such Spain and Italy struggle.  Why Scotland would fare better is anyone’s guess.

The UK is as much a fiction as the EU.  Both are based upon and run in the interests of their respective banks and corporations.  The six counties of Northern Ireland have over the years been compelled to be a part of the UK, through a combination of military and economic force.  The Act of Union of 1707 saw the Scots brought into line at the barrel of a musket.

Scottish independence is not the real issue.  Being inside or outside the EU will not make any difference to the Scottish working class if they are under the thumb of the European Central Bank rather than the Bank of England.  Labour taking a harder line on resurrecting class politics, rather than the politics of nationalism in Scotland, would be a start.

Finally, to round off a week of headaches for the Tories, former Chancellor George Osborne was unveiled as the new editor of the London Evening Standard.

As the erstwhile architect of austerity, Osborne is clearly not one for swallowing his own medicine.  On top of his £75k+ salary for being MP for Tatton in Cheshire, Osborne works one day a week for the world’s biggest investment fund, BlackRock, for a cool £640k per annum.  Speaking engagements last year netted Osborne a further £800k.  There is also a £120k per annum stipend from a US thinktank.

It is not clear how much the Evening Standard job will pay but Osborne has until May to negotiate, when he takes up his post.  It is hard to see how he will make ends meet!  Perhaps some advice from working women running family budgets with £1,400 per annum less than they previously had might come in handy.

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