Tuesday, 14 July 2015

Two leaderless parties meant Osborne got an easier ride than he should have as he announced a ‘Regressive’ Budget.

As is always the case with Budgets that seem reasonable and popular at the time of announcement—they often look rather different a few days later...

So it was this time. The headline 'grabbers' were of course the so-called ‘living wage’—£9 an hour by 2020—but note only for the over 25-year olds; raising the personal tax allowances; restricting child tax credits in future to the first two children; reducing the total amount of benefit per household; and changes on inheritance tax arrangements. They were all carefully targeted to achieve popular appeal and, indeed, Osborne was the ‘hero’ of the moment. Initial polling indicated that 42% of people thought that the budget was ‘fair’ and only 27% ‘not fair’, with 31% registering that they ‘didn’t know’. Also when asked about their own family circumstances, the opinion was that 20% considered themselves ‘better off’, 17% ‘worse off’ and a massive 53% thought that they would not see any changes.

However, a few days later those last three figures adjusted significantly, particularly in terms of those that were now of the view that they would be 'worse off.' So the respective figures altered to 30% ‘better off’, 37% ‘worse off’ and only 19% ‘not affected’. That began to put a different gloss on this 'popular' budget. 

As the dust settled, two of the budget measures were found to be very unpopular. Limiting public sector pay rises to 1% for the next four years was opposed by 51% of the people and most alarming of all was the abolition of student maintenance grants—with only 24% supporting the measure. In addition, eventually the realisation dawned that the Chancellor had announced a measure that would, in effect, reduce benefits for people who are actually in work but on low wages.  There was a 3 to 1 opposition to this proposal with 45% of the view that too little is spent on those people who are on low wages and making good efforts to better their personal circumstances. So all of a sudden the old adage that ‘we are all in this together’ started to ring rather hollow indeed. Those on middle to higher incomes and the retired were palpably going to be better off, whilst those on benefits and/or working but on low wages along with the young and students would be hit the hardest.  

The Institute for Fiscal Studies calculates that the poorest 10% of families would be worse off to the tune of £800 a year because of this budget by 2019. The next poorest 10% would be worse off by £1,100 a year.  The four year freeze on working age benefits is estimated to cost some 13 million families £260 a year each. One graph in their report is staggering—it outlines the difference the budget effect has on the lowest 40% of household incomes compared to the top 40% of household incomes ... I leave it to you to look at the link above and draw conclusions.

But leaving aside the unfairness and the imbalances of the budget, what has been most glaring over the past week has been the weakness of the two opposition parties at Parliament in challenging it. Currently the Tories are having an easy ride when that should clearly not be the case. Labour and the Liberal Democrats are in the midst of leadership elections and UKIP, despite its 4 million votes, only has one Member of Parliament.  That just leaves the SNP and, to be fair, they are almost daily putting up a strong fight against the government, presenting themselves as a coherent and well organised force. 

The irony and travesty of the situation is that Cameron and his party do not have a true mandate from the people of the United Kingdom. Only 33% voted for the Conservatives at the General Election and even worse, only some 24% of those entitled to vote supported the current government. Yet they secured 330 MPs—which implies a thoroughly discredited voting system. 76% of the United Kingdom's people did not support the Conservatives yet they are going to inflict a lot of hurt and damage on hundreds of thousands of families.

True to present form, Labour seems to be at sixes and sevens. Harriet Harman stated that the party will not oppose much of the welfare changes—which I must say was a surprise to me coming from her. But that immediately and quite predictably caused a furore in her party with three of the four leadership candidates disowning her statement!

The interview she gave seemed to concede that the agenda set by the Tories regarding the need for more austerity, reducing the deficit and getting into surplus by 2020 is one that is generally popular. So her argument was that Labour had better listen to people’s concerns, especially about the welfare bill. This is a party 'shocked to its core' without a doubt—where has the natural movement of the working class, the underprivileged and the deprived gone?  Has it lost its soul?  Is it afraid to be a radical force any longer? If so, unless it is careful, the people will soon be asking ‘what is the point of the Labour party?’

Sadly, the Liberal Democrats have been decimated and are now a pale shadow of the force they once were. They paid a heavy price for being in coalition with the Tories and matters should not have been allowed to get to that desperate point by 2015. Many in the party console themselves with the grand view that ‘we did it for the good of the country’ which is true—but there was no need to have stuck it out with the Tories for the whole five years.  The party should have walked away some eighteen months previously and let the Tories govern as a minority government. On any assessment of fairness and 'working for the common good', the Liberal Democrats—at great sacrifice to themselves—had done their ‘duty’ by mid-2014.

The road back will be a hard one and I can only hope that either one of Tim Farron or Norman Lamb will turn out to be radical leader. Going by the evidence coming from the leadership hustings debates, I do believe they will. But with only 8 MPs, not much can be achieved in Parliament—so whichever is elected, the main fight will need to be taken to the country, speaking directly with the people. It can be done. It was done when the SDP and Liberal parties merged in 1988. Paddy Ashdown took over after a gruelling divisive year for the two parties regarding the issue of merger. Good people were lost along the way but many of us went round the country speaking ... and gradually the recovery came. However, those difficulties were nothing like the present challenges facing the new leader of the Liberal Democrats from Thursday onwards.

His role will be to forge alliances even outside the traditional party structures—someone has to speak-up for the young, the students, the poorest in our country, the underprivileged and those in need of care and support. Someone has to stand up and say the public sector workers have suffered for long enough—another 1% annual rise for 4 years is blatantly unfair.
Yes, someone has to lead the campaign for a more open, just and democratic country ...