The less than perfect realities of the 2015 Autumn Statement

Image credit: The Independent
Image credit: The Independent

Wednesday, 25th November saw the announcement of the Chancellor’s Autumn Statement, the annual update on the Government’s plans for the economy. This year’s is particularly significant and interesting because it is George Osborne’s first as the Chancellor for a majority Conservative government, for the past five years it has had the input of the Liberal Democrats.

Although I am a staunch Labour supporter, I don’t object to entirety of the Autumn Statement. In my opinion it would be absurd to do so. For me political ideology is much more fluid than that. I support increased government spending on the NHS, especially the £600 million more on mental health services, transport and housing. It’s coming from Whitehall administration does not cause me much discomfort: I would rather it came from that than cutting benefits further. I support a £3-per-week increase in state pension – I know how much that would help out my grandmother – and I support increase in revenue raising powers for local government and then being provided with £10 million to help the homeless. The last point is certainly a step in the right direction if the money is used correctly.

However, the problem with the majority of the measures and policies in the statement is they look much better on the surface than they are in practice, a general trend of this Tory government in my view. They want to appear caring about the under-privileged but in reality it is all a political ploy.

Although state pension will increase, so will the age at which an elderly person must be to receive it. The figure doesn’t seem to have been released, meaning that many people could miss out without much warning of what the age provision will be. From 2017, 30 hours of free childcare for three- and four-year-olds will be provided for, but only for those working sixteen hours a week and with annual incomes less than £100,000. Sixteen hours is a part-time job; many students work that in pubs and waitresses simultaneous to their studies, so this would not apply to a large majority of families and so could certainly be seen as a token gesture. One group that could adversely impact is single parents. They may not be able to work sixteen hours a week because they cannot afford childcare and government bureaucracy is not exactly the most efficient so they could miss out.

According to the Autumn Statement, £1 trillion will be spent on the NHS but they will be expected to make £22 billion of efficiency savings. How are they supposed to achieve this? Presumably further cutbacks, just not right now. The fact that Jeremy Hunt seems unable to make a decision that doesn’t upset, quite rightfully, the junior doctors means I worry about his other policies for the NHS and how they will hinder the efficiency of that wonderful British institution.

Also, Osborne has removed the cap on nursing training places and 100,000 new training places will be created. However, no more grants! Only loans for both nurses and all full-time students. Almost half a million English students from low-income families will lose this grant and now have to pay back all of the money they get for studies.

I am an ardent opponent of the tampon tax. I know that the Government cannot change the tax rate because it is imposed by the European Union and so lowering it or abolishing it would involve the agreement of all EU member states, something that, at least in the opinion of the Government, is incredibly unlikely. Nonetheless the government should try but their voting against the Labour submitted amendment on this issue earlier this month showed they weren’t going to do this. The Autumn Statement declares that the £15 million of revenue raised from the tampon tax will be used to fund women’s charities. . This is at the same time as most of the Rape and Domestic Abuse Crisis centres are having their funding cut and not being informed if there will be any at all after March 2016, less than 6 months away, as the leader of the Women’s Equality Party, Sophie Walker, notes in her article for The Huffington Post. I would rather that this money went towards these women’s charities than pointless investment opportunities (like HS2) but surely this is just an attempt at political point-scoring because of the public outcry and pressure on this issue. Ordinary women on low incomes are forced to buy these expensive items and most of these won’t see a penny of it back through these charities.

Another example of political point-scoring is linked to the London help-to-buy scheme. It seems to be a good scheme, and appealing to someone who is intending to move back home to London after graduating but eventually living independently from my parents. Those with a 5% deposit will be offered an interest free loan for 5 years worth up to 40% of the value of the newly built home. This is risky and could only exacerbate the housing bubble. I am going to join Rowena Mason, the Guardian’s political correspondent, in thinking this is about helping Zac Goldsmith in his bid to become London Mayor in May. The Tories would not want to lose that foothold especially see as London is one of places Labour managed to hold onto in the General Election.

The general concepts of increasing government spending on areas such as housing, transport and the NHS, not implementing tax credits and increasing the responsibilities and revenues of local governments are all sound. But the realities of the proposals are quite different. Some of them can be seen as simple political point-scoring. The IFS has announced today that 2.6 million people will be £1,600 worse as a result of these policies. Specifically, poorer students have been targeted, there will have to be cutbacks in the NHS but just at a later date, the tampon tax issue is not solved (in fact now the Women’s Equality Party and the rest of the lobby are even more angry), many who need it won’t be eligible for free childcare and increasing the state pension age will specifically attack that age group some of which are struggling in the current competitive job market and being pushed into early retirement or redundancy.

None of this surprises me. It’s consistent with the policies of a Tory government and most of the policies of the Coalition.

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