Tommy Sheppard

MP for Edinburgh East

Austerity is alive and well after Hammond’s Budget

budge_20181108-145644_1

The budget was last week. Did you notice? As squibs go, this one was pretty damp. We’ll be debating the detail in the finance bill next week but the real story is one of indifference and missed opportunity.

Since the 2008 crash, governments across the western world have seen their revenues unable to meet spending. In the US and most European countries the response was to use the power and funds of government to stimulate the economy. More public spending led to more jobs, more earnings and more taxes.  Not here. For eight long years the Tories have applied the opposite approach: use the reduced income as an excuse to slash public spending. This is austerity. And no matter what Hammond and May might like us to believe, it’s still here.

True, the government has a bit more money than they expected. They’ve used this for two things. One, increasing funding on the NHS in England to try to cope with demand after eight years of squeeze. The actual average increase in spending over the next five years will be less than the average yearly increase since the NHS started. So don’t hold your breath.

Two, the Tories did what Tories always do – cut taxes for the rich. I support raising the level at which people start to pay tax – it should go higher. But the big increase in the level at which you start paying the higher rate of tax to fifty grand a year is a bonus only to anyone earning more than the current level of £46,351.

Thankfully, in Scotland our own government has some say on income tax these days. Last year Scottish Finance Secretary Derek Mackay decided not to pass on this higher rate tax cut and I hope he’ll take a similar approach this year.

Meanwhile the basic structure of austerity is intact. The cuts to the welfare state continue. Next year a further three billon pounds will be taken out of the pockets of claimants as working age benefit rates are frozen for the fourth year. Child tax credits remain withdrawn for the third or subsequent children in large families. And disabled people will continue lose £30 a week from their allowance. The poorest in our society get hit the worst. Unjust. Immoral. Unfair.

And there’s Universal Credit. Nine times it has been delayed. It’s an avalanche of pain and misery waiting to descend upon the poorest in our community. This budget could have been used for a major rethink, instead there was minor tinkering. The main problem remains. Millions of people will have to make a claim for Universal Credit and whilst they do so there will be a five-week interruption in their payments. Many will have no option but to rely on food banks, and anyone on housing benefit will find themselves going into rent arrears even though they have done nothing to cause it.

The general cuts to government spending continue too. In Scotland almost two billion pounds has been taken from the Scottish government’s budget in real terms since 2010 – that’s about seven percent. It means despite everything the Scottish government does to increase income and protect services the squeeze stays on.

But the biggest feeling around Westminster at the moment is whether the budget is worth taking seriously. After all, the plans may not make it to the end of the financial year. With Brexit coming down the track the country’s entire finances could be blown apart. The chancellor himself says that he’ll be back with a new plan if he doesn’t get the deal he wants. Of course, if by some miracle they do get a deal on Brexit – the fudge of the century I expect – then Mr Hammond has a tidy four billion in his back pocket to offer as inducements to vote Tory in the run up to another election.

Written for Edinburgh Evening News - 8th November 2018. 

Brexit Update
Let's march towards a new vision for the nation
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Tuesday, 19 March 2019

Tommy's Blog Articles

Tommy Sheppard
28 February 2019
Tommy's Blog
Media

Four weeks ago I was worried about writing this column on the eve of the last major parliamentary debate on Brexit. Anything could have happened, rendering my speculation obsolete by the time you read it. I shouldn’t have fretted. Anything could have happened but nothing did.

Here I am again. Groundhog day. It’s Tuesday. There’s a big debate tomorrow.

Tommy Sheppard
31 January 2019
Tommy's Blog

Tuesday. Another day spent discussing Brexit. Another day of my life I’m not getting back.

We are no further forward. As the clock ticks down to exit it’s only fair to ask: What the hell is Theresa May playing at?

Tommy Sheppard
11 December 2018
Tommy's Blog
Just when you thought things couldn’t get any more farcical, yesterday happened. Government ministers spent the weekend assuring us the vote planned for today would go ahead. Some were even claiming the PM might win it (it’s nearly Christmas after all, the season of miracles). Even late yesterday morning the Downing St press office were still telling us the vote was going ahead, while the PM was h...
Tommy Sheppard
23 November 2018
Tommy's Blog
It’s been a little while since I've written a blog on Brexit. Things are now moving quite quickly so I thought it might be helpful for me to share a few of my thoughts on where we are.The proposal put forward by Theresa May last week is not a good one and not one I can support. While the SNP Scottish government remain of the view that the best option for Scotland would be to remain in the European...