ASPECTS of the Chancellor’s Spring Budget received a cautious welcome from UK debt charities on Wednesday — but Christian Aid said that it demonstrated a “poverty of ideas” amid the present crises.
On Wednesday afternoon, the Chancellor, Jeremy Hunt, announced a 2p cut to National Insurance, which comes on top of an identical cut within the Autumn Statement (News, 18 November). “The money you earn doesn’t belong to the Government, it belongs to you,” Mr Hunt said, in a heavily trailed statement within the House of Commons.
Before the speech began, the Labour MP for Streatham, Bell Ribeiro-Addy, wrote on social media of the implications of tax cuts. “For every £1 the federal government spends on NIC cuts, 46p will go to the richest households. Just 3p will go to the poorest. And every penny is money taken away from school, hospital, and council budgets, where it’s so badly needed,” she suggested.
“What the Tories have briefed ahead of today is a cut and run budget. Instead of prioritising long-term investments to repair our crumbling NHS, schools, and houses, they need to take money out of future budgets for a pre-election giveaway to their base.”
Christian Aid’s chief of UK advocacy, Sophie Powell, said that the Budget “demonstrates a poverty of ideas”, which might “tie the federal government’s own hands fairly than mobilise the resources needed to deal with the spiralling, and inter-connected, crises of inequality and climate change.
“He must have taxed the wealthiest and the largest polluters to fund the UK’s justifiable share of international climate finance. He must have agreed to cancel debts for the poorest countries. That is the ambition we so urgently need, not the standard pretence of there being no other way.”
A move to abolish fees for debt-relief orders (DROs) was welcomed by the charity Debt Justice, which described it as a “first step”.
“Now we want to see other barriers to accessing debt relief removed in order that the tens of millions of individuals weighed down by unmanageable debt have a transparent path to becoming debt free,” the manager director, Heidi Chow, said.
The director of external affairs at Christians Against Poverty, Gareth McNab, also hailed the move. “We have campaigned for reform of DROs for various years, highlighting the important thing barriers which have prevented 1000’s of households from breaking free from the chains of problem debt,” he said.
Rules on non-domiciled tax status can be “abolished” to be sure that the system was “fairer and stays competitive”, Mr Hunt said. A latest residency system would take effect only after people had lived within the UK for 4 years.
Capital-gains tax on residential property can be reduced from 28 to 24 per cent, Mr Hunt said. He argued that this may help to stimulate more transactions, and thereby increase tax revenue overall.
The thresholds on child profit can be shifted upwards, and Mr Hunt said that he would seek the advice of on further changes to contemplate the payments based on household fairly than individual income.
The Children’s Society’s chief executive, Mark Russell, welcomed changes to child-benefit thresholds, but said that this did “little for families on lower incomes who’ve seen social security for youngsters fall in real terms during the last decade. Millions of youngsters live in poverty which is an outrage and a scandal, and I heard nothing today that can change the lives of the families living hand to mouth.”
Nor did the “minor boost to social-care funding . . . go anywhere near what is required to reset the system”, he said. The Budget was a “missed opportunity” to support struggling families and kids, and, while the six-month extension of the Household Support Fund can be “a significant lifeline for families”, the limit “risks a cliff edge in crisis support at a time when there could also be an election”.
The lack of support for church buildings was “disappointing”, the National Churches Trust’s chief executive, Claire Walker, said. “The closure of many church buildings is the one biggest heritage challenge straight away, with many churches, chapels and meeting houses vulnerable to falling into disrepair and being forced to shut. . .
“Without regular financial support from the UK Government, and more funding from heritage organisations, denominations and philanthropic trusts, an increasing number of churches will close if they can not pay for repairs. This will mean an uncertain future for precious buildings, symbols of hope and continuity, and the lack of the community support they supply.”
Mr Hunt confirmed that a raft of tax cuts and freezes that were already in place would proceed, including those on fuel and alcohol duty. A windfall tax on energy corporations would remain until March 2029, a yr longer than originally expected.
The Household Support Fund, which enables local councils to support foodbanks and other measures, would proceed until the top of September. Charities, including Barnardo’s and Church Action on Poverty, had called on the Government to keep up this funding stream.
Mr Hunt also announced a £3.4-billion investment in IT systems for the NHS, in an effort to enhance productivity — a move that the Institute for Public Policy Research (IPPR), a Left-leaning think tank, said was “no match for the dimensions of the challenge we face”.
“The money announced is barely enough to maintain NHS funding from falling — at a time every light within the service is flashing red, and reduced investment in a crumbling estate and in primary care is undermining productivity,” said Chris Thomas, who’s head of IPPR’s commission on heath and prosperity.
In his speech, Mr Hunt asserted repeatedly that Labour would increase taxes.
In his response, the Labour leader, Sir Keir Starmer, said that the Government was “completely unable to generate the expansion that working people need”.
The Office for Budget Responsibility (OBR) growth forecast announced in November stays roughly unchanged, and the short-term outlook stays one in every of a slight recession.
“As the desperation grows, they torch not only their popularity for fiscal responsibility, but any notion that they serve the country, not themselves,” Sir Keir said. The overall tax burden was at a 70-year high. “There will probably be no change of direction until a change of presidency.”
