The Chancellor’s Spring Budget was a conservative and reactionary mixture of soft-policies which do little for ordinary people and probably won’t help sort out Britain’s economic problems…
The three main priorities of the budget were to
- reduce inflation
- Stimulate economic growth
- Bring down government debt.
Taken together these are very conservative and reactionary goals, nothing at all radical.
The government repeatedly says that current high inflation rates of around 10% are due to Putin’s war in Ukraine increasing energy prices, but many people know this is just a simplification, as there are many other causes of inflation… such as Brexit pushing up the cost of doing business and quite possibly just the failings of the capitalist system in general.
This and bringing down government debt are the government reacting to events that have already happened – the debt in large part being due to the government’s chosen response to the Covid Pandemic and Liz Truss.
This feels like a government catching up rather than driving the country forwards. If we use Anthony Giddens’ ‘steering the juggernaut’ analogy, it feels very much here like the global economy is out of control of the government, and there’s not a lot they can do!
One also has to question whether economic growth is the right strategy. Not only because the growth forecasts are dismal, but also because redistribution seems to be a more sensible goal.
There is plenty of money in the form of wealth out there, as the Equality Trust points out, what we need is for the government to tap into that and use it effectively to improve the quality of people’s lives through, for example, massive investment in education and green technologies.
At least one area of policy makes the rich richer: increasing the amount people can put in their pensions tax free from £40K a year to £60K a year: a really nice little perk for very high income earners, but 90% of population see no benefit from this.
The rise in Corporation Tax from 19% to 25% for companies making annual profits of more than £250 000 seems like a fair move to make, and the government have to be commended on this, it seems like a roll back of neoliberalism, but we will still have the lowest rate in Europe, and also remember that we only dropped it to 19% relatively recently, so let’s not get sucked into a false sense of this being radical, it isn’t, it’s just going back to a slightly higher version of a low tax norm!
The extension of childcare
This is a significant move – that 30 hours per week of free childcare will be offered for children aged one and two, rolled out gradually from 2024, extended down from the current age of three.
This should go at least some way to tackling the gender pay gap as it is mainly women who take time off work to look after younger children.
To my mind this is long overdue and should have been tackled many years ago, I know so many people with young children that struggle with childcare costs just because they are working and lack the friend and family network to look after them.
The Budget: Final Thoughts
There’s nothing radical or really big-picture in here, it just feels like a failing State struggling to keep up with global economic forces that are making a life a challenge for British people.
But most of what is being proposed is like a sticking plaster, rather than the government committing to really improving people’s lives in the long term.
Also consider that there’s no mention of funding public sector wages for teachers and nurses, for example, no mention of how to tackle soaring inequality, no real long term vision.
It’s just an epic fail on nearly every level.
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