After an embarrassing budget u-turn in March, today, neither Hammond or May could afford to make any mistakes. In review, Hammond can be happy that his performance was gaffe-free, but apart from that there isn’t much else to commend.
He began by declaring his vision for Britain saying: “I see a future full of new opportunities outside the EU,” adding: “a good deal with the EU is a top priority but we must prepare for every possibility.” He announced an extra £3bn will be set aside for a pre-existing budget of £700m for Brexit preparations. In short, under increasing pressure from raging backbench Brexiteers, Hammond has flung some money at the Brexit problem.
The Office of Budget Responsibility (OBR), an independent body set up by George Osborne to provide economic forecasts, has predicted productivity and GDP growth will fall from their previously thought 2.0% to 1.5% this year, in theory meaning as a country we have less money. The OBR has also predicted the amount of money the government borrows will fall from £58.2bn to £49.9bn. But, lets be clear, if this reduced borrowing is in fact achieved, it won’t be due to ethical fiscal ‘conservatism’ from the Tories, but rather because of devastating cuts to those most vulnerable in our society.
A fall in productivity and GDP means less money for the government, and an inevitable increase on working class taxation, the government will undoubtedly have to borrow more money, so Hammond’s plans and the OBR’s numbers just simply do not add up. Of course, though, Hammond masquerades these inaccuracies with organised skits – a pack of couch sweets handed to him by the PM.
In his rebuttal, Jeremy Corbyn said: “As liberals we love to share polices,” and Tories certainly love to steal them. After weeks of hounding, the government will finally remove the 7-day waiting period on Universal Credit, the right to benefits will now begin on the same day of the claim. The re-payment period will also be increased from 6 to 12 months.
The National Living Wage will be increased from £7.50 to £7.83, which is not nearly enough, but certainly progress. Also, Hammond proudly announced the top 1% are now paying a higher share of tax, the problem is they’re still earning considerable more than everyone else – not to mention the money that is being siphoned offshore and therefore not eligible to be taxed.
An injection of £2.8bn will be pumped into the NHS, and ironically £350 million will be available immediately, that is what they promised, right? The problem is it is HALF of what Simon Stevens, head of the NHS, said the service needs to survive.
£28 million will be given to Kensington and Chelsea council to support the rebuilding of the community around Grenfell, this will include the developments of a community space and mental health services. So, instead of being housed like they’re asking for, victims of Grenfell can look forward to a nice visit to a community centre built by the inept council responsible for the tragedy. Councils will also be given extra powers to tax the owners of houses left empty up to 100%. The only problem is, if you’re rich enough to buy a house and leave it empty, you’re probably not worried about that.
In the headline grabbing announcement, Hammond has abolished stamp duty for all first-time buyers, on properties up to £300,000, supposedly meaning 80% of all first-time buyers will not have to pay the controversial tax. Although a welcome charge for many of us, this really does little to tackle the actual problem of having nowhere to live.
In a devastating fact check, the OBR have just announced: “we expect this to increase house prices by 0.3 per cent, most of this effect is expected to occur in 2018.” This would mean that first-time buyers would in fact be paying more for their house, which only benefit pre-existing home owners who are already on the housing ladder.
There was little mention of a goal to ‘balance the books’, maybe the Tories have finally given up on fixing the mess they’ve created. In conclusion, this was a budget of dire economic performance and even worse predictions. If May does the unthinkable and remains in office for term, we can look forward to continued austerity, higher taxes, and a failing NHS.