East of the M60 looks at the first full-fat Conservative budget since November 1996
Six weeks into Britain’s first majority Conservative government since 1997, it was business as usual for Chancellor George Osborne as he delivered his first budget of the 2015 – 20 parliament. By business as usual, we mean the driving down of public sector wages and working-age benefits.
None of the above came as a surprise to us on East of the M60. In fact, the continued assault on working-age Social Security payments is popular with almost half of persons in a Sky News opinion poll. What came as a surprise was the words ‘living wage’ being uttered from the Tatton M.P. But is it a real Living Wage or a rebranded National Minimum Wage?
As well as cuts to working-age benefit rates there was two other sources for the chancellor’s £17billion worth of cuts. Undergraduates and large families. Within 65 minutes of delivering the emergency budget, a tax on aspiration and attacks on the young. In spite of the ‘living wage’ statement, nothing whatsoever for Tameside’s 210,000 citizens. As we thought, more sanctions to come, foodbanks outnumbering retail banks and certainly no assurances of the Trans-Pennine electrification scheme as yet.
A tax on aspiration, attacks on the young
Tucked away is a plan to make higher education a preserve of the rich. In spite of claiming tuition fees haven’t fazed working class undergraduates from attending university, Tuition Fees are set to rise. At present, the ceiling is set to £9,000 per year. From 2016 – 17, Tuition Fees will rise in line with inflation. This would do nothing to improve upon Tameside’s low participation rates in HE.
Not only that, students with anything less than a five figure debt will become as rare as Manchester bound buses from Dukinfield. The maintenance grants, though only a partial replacement from previous methods of student support will be scrapped.
Unless in exceptional cases, persons under 21 years of age will no longer be entitled to Housing Benefit. Which, given as the whole of Tameside falls under the DWP’s Universal Credit scheme, means they would only be entitled to the 18 – 24 rate of UC. Or the proposed Youth Allowance. Young people will be encouraged to earn or learn, upon pain of compulsory Workfare if they choose neither option.
Instead of going to university in Britain, studying in other EU Member States may be a cheaper option. For a start, Germany has abolished tuition fees. Apart from Romania, no other EU country has a more derisory Social Security system than the United Kingdom. This is proved by recent cuts to working-age benefits.
Three is a tragic number
Supposing you want to start a family, the Conservatives seem to have turned to China for inspiration. Ever wondered what happened to their One Child Policy? Well, it seems to have been rehashed in relation to Child Benefit. Future claimants will only be able to claim for two children if part of a two parent family.
Unless of course the mother who gives birth to quads or sextuplets – and decides not have more children. Woe betide working poor families, of which Tameside along most of Greater Manchester has a great many. Tax Credit awards will be almost halved, falling from 90% of claimants to 50%. The full rate will fall from £6,000 to £3,000.
Supposing they may be better off on Universal Credit, think again. All working-age benefit rates (including UC of course) will be frozen for four years. Therefore, anyone who has had the misfortune to sign on since the 11 May 2010 hasn’t had a rise in JSA or UC since 2012 – eight ******* years! £72 a week in 2020 wouldn’t even pay for a monthly season ticket on Greater Manchester’s buses (supposing there is any bus routes left at the end of this parliament).
Is there any end to the enforced penury, a 21st century Speenhamland system unfurling before our very eyes? Unfortunately not.
The ever-popular Benefit Cap (not in one corner of East of the M60 land though) has been cut from £26,000 per year to £20,000 per annum outside Greater London. In London, the present figure has helped to make the capital city a preserve for monied tourists and overseas property owners.
The screws have been tightened with the capital’s rate cut by £3,000. The new £20k cap could be seen as a shoo-in for regional Social Security rates (hello to PoorLaw.com (the domain name hasn’t been taken as yet)). Low income families could be forced to move out of salubrious parts of Greater Manchester. Didsbury, Chorlton-cum-Hardy, most of Saddleworth plus Gee Cross and parts of Stalybridge could be affected. Our communities will be less diverse as a result.
Most pernicious of all is the 33% drop in income for people with disabilities. Some claimants of Employment and Support Allowance, particularly those in the WRAG (Work Related Activity Group) will see their ESA rate fall to the same levels as UC. This following the loss of Disability Living Allowance and the closure of the Independent Living Fund represents a massive drop in living standards. Especially to a group of people who have paid more than most for the bankers’ excesses – financially and physically. Even exemption from tax and means testing wouldn’t be enough to assuage concerns.
So much for a country ‘open for business’ to Hardworking People®. Especially public sector employees who are set to see pay increases capped at 1% per annum. Even the assurances of George Osborne’s Living Wage announcement would ring hollow. The average public sector employee has ‘enjoyed’ a real terms cut in wages since Thatcher came to power. That excluding the drop in pay and conditions following privatisation of some public services. No change in Income Tax rate thresholds to the £11k mark would help matters.
(Not quite a) Living Wage
Close to the end of this budget, the Chancellor also announced plans for a Living Wage of £9 per hour by 2020. What is worth noting is the proposed figure is a pound short of the Green Party’s recommended National Minimum Wage rate. A pound more than Labour’s proposed figure in the run-up to 2015 General Election.
A Living Wage redefined? Perhaps. Supposing we used the Green Party’s figure of £10 per hour as the NMW, the Living Wage figure would be closer to £11.50 per hour. Psychologically, the £9 figure may have been suggested to placate some Labour voters.
The proposed Living Wage of £7.20 per hour is slated for implementation next April; October’s National Minimum Wage rate will be £6.70 – little difference between the forthcoming Living Wage rate set in April.
Chances are you may well need to work 40 hours a week at £7.20 per hour from next year. In later years, any benefits of the subsequent rates could be evaporated by higher train fares and – heaven forbid – Health Insurance premiums if the Tories run our NHS down to justify privatisation.
Nice idea but poor in execution, Mr Osborne.
The turn of a friendly Oyster card
There was a few ‘blink and miss’ nuggets for the Greater Manchester area. Though the Trans-Pennine electrification scheme is waiting to leave a metaphorical Ardwick Junction, there was one transport announcement which took us by surprise. The announcement of a Northern Oystercard. One to complement or supersede present or future schemes (i.e, Merseytravel’s Walrus card and TfGM’s future GetMeThere card), it aims to offer the benefits of London’s scheme from West Kirby to Spurn Point.
Though the idea seems good on paper, could this be part of a plan to rid the Northern Powerhouse of its railway station ticket offices? Likewise with free WiFi on buses, trams and trains? It falls in to place with the franchise terms of Northern’s successors, in relation to driver-only operation.
Powerhouse power play?
Greater Manchester could be given new powers over its Fire and Rescue Service, children’s services and employment programmes. There’s every chance this entails the transfer of some or most children’s services from the ten Metropolitan Borough Councils. Other public services could follow suit, as suggested by the Conservative leader of Trafford MBC Sean Anstee prior to the 2015 election.
Furthermore, the Greater Manchester Combined Authority has controlled Greater Manchester Fire and Rescue Service since absorbing AGMA (who inherited the pumps from the abolished Greater Manchester County Council). Sloppy research Mr George? Seems to be more of the same functions though with the Mayor of Greater Manchester at the helm.
The GMCA’s role in employment programmes entails the delivery of the DWP’s Troubled Families scheme and The Work Programme. Land management powers could be granted. Could this mean local planning permissions being thwarted by GMLand (my proposed name for Greater Manchester’s Land Commission)? Or could the whole of Greater Manchester be a Frack-Free Zone with the same zeal Manchester City Council had when the city became a Nuclear Free Zone in 1980?
One major concern at local level is the elected mayors’ influence over Tameside, Oldham, Rochdale and other MBCs in Greater Manchester. Could Mancunian and Salfordian influence neglect Ashtonians, Boltonians and Dukinfeldians?
More of the same is proposed for Liverpool and Sheffield. Owing to Manchester’s proximity with London, George Osborne’s backyard south of the M56 motorway and its stable leadership, you have this feeling its 2.6 million citizens are his lab rats. Especially with NHS devolution which is likely to undermine the N in Aneurin Bevan’s greatest achievement.
Other powers the Greater Manchester Mayor will gain include Sunday trading laws. Mentioned in advance of today’s budget was the start of a consultation to review them. At present, superstores and department stores can only open for six hours on a Sunday. Could a Mayor of Greater Manchester see Bargain Buys open from 9am to 6pm?
The ‘Living Wage’ announcement had been lauded by some sources as an astute political move. One which is likely to prick the consciousness of some Labour and Liberal Democrat voters. Other than that, and continued devolution for Greater Manchester, it was a School Version of a typical Conservative party budget. By ‘typical’, the continued assault on disabled people, unemployed persons, the working poor. Also poor people priced out of desirable areas through rents, benefits caps and the Bedroom Tax.
If you’re aged 18 to 21, today’s Budget was truly awful. Not only the prospect of there being no maintenance grants, but also Tuition Fees rising in line with inflation! Wish to start a family? Tread carefully.
As for this Budget being the School Version, I refer to the fact a version of the Conservative Budget designed for theatres with proper fly towers will be much worse. Expect the London Palladium version of the budget instead of the Hyde Festival Theatre one in November. Expect to see near Winter 2015 the departmental cuts which George Osborne hinted at today. Which in other words, more of the most brutal cuts we have seen to our bus routes this April.
In a Tameside context, there was absolutely nothing for the ordinary citizen. Cuts to ESA, Tax Credits and the continued four-year freeze on working-age Social Security benefits will reduce the borough’s spending power. The lowering of the benefits caps to £20k per annum could see parts of Greater Manchester become unaffordable to low income families.
Between now and 2020, there will be more DWP sanctions; we’ll dread to think how much more’s going to be cut from TMBC’s budget. The rise of the tax-free allowance would be cancelled out by bus, train and tram fares and fuel bills, which have commonly risen above inflation rates. Foodbanks could outnumber retail banks in five years time. How much of the NHS’s £8billion will we see in Tameside Hospital? Would we still see Pacer units at the end of this parliament?
Today’s Budget is a lull before the storm, though we dread how bad the storm will be going off the cuts to working-age benefits. Subsequent budgets could be worse and no amount of devolutionary powers could protect the borough’s citizens from the mother of all showers. Time to hold on tight, yet again.
- Budget 2015: complete document of today’s budget (GOV.UK, Adobe PDF format);
- Budget 2015 live: George Osborne announces ‘living wage’ of £9 an hour (The Guardian, 08 July 2015).
S.V., 08 July 2015.