Nicola Smith

Writing in the BMJ, David Stuckler and colleagues show that cutting welfare expenditure (which includes spending on areas including education, housing and childcare as well as welfare benefits) leads to poorer health. The key chart is here – it shows a clear association between social welfare spending and all cause mortality after adjustment for any country specific factors.

The evidence is stark – cuts of the scale announced in this week’s Budget will mean that the health of the poorest will suffer.

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Nicola Smith

The FT have done some useful analysis of what a 25 per cent spending cut could mean for different departments. Cutting education spending by a quarter would mean removing all spending for primary schools and all spending for Sure Start.

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Nicola Smith

In response to a question from John Healey, a written answer from Grant Shapps has revealed that every £1m the government spends on house building is estimated to support 11 jobs for one year. Local Government Chronicle reports that given the scale of the cuts in housing budgets being proposed, this means over 10,000 jobs will be lost.

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Nicola Smith

As well as including a large number of cuts in benefit entitlements (for example for the poorest mothers and for disabled people) the Budget announced changes in the mechanism for benefit uprating. A quick analysis, using the CPI and RPI forecasts provided by the Office for Budget Responsibility, shows that as a result of the move to CPI for calculating benefit rises, the values of all state benefits – and pensions – are being cut.

As a result, for example, of the Budget’s decisions, the value of Carers Allowance and Jobseeker’s Allowance will be 4 and 3 per cent less respectively in 2015 than had the RPI indexing remained in place (£135.20 and £132.60 less annually respectively).

Note: this post was updated on 29th July 2010 to take account of figures released by Steve Webb MP in response to a parliamentary question from Yvette Cooper MP.

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Nigel Stanley

Andrew Morris of the Public Service Pensioners’ Council reveals in a letter to The Times that Philip Hammond, a pre-election Conservative shadow treasury minister write in a letter that the Conservatives had

“no plans to change the current index-linking of pensions in payment”

Just like VAT then.

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Owen Tudor

Media coverage of the budget saw the Robin Hood Tax campaign take on a higher profile. It is one of the clearest alternatives on offer, offering at least £20bn in tax income set against the cuts in the budget.

Finance Markets said that “the Chancellor of the Exchequer has failed to hold banks responsible for the financial carnage they caused in the credit crunch and the subsequent recession, the Robin Hood Tax campaign said.” 

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Nigel Stanley

The headline grabbing element in today’s pensions announcement is the review into increasing the state pension age for men to 66. Unlike our hopes for the auto-enrolment review, there can’t be much doubt that this is a done deal given George Osborne’s announcement at the Conservative Party conference (even if Steve Webb was sceptical of the figures quoted at the time – though to be fair he did not oppose the idea.)

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Paul Nowak

If you work in the public sector then the odds are that over the next day or so you’ll receive an e-mail from the Prime Minister asking you to identify ways of helping the government make the swingeing cuts announced in Tuesday’s budget.

While a few public sector workers may happily engage in this process, I suspect the vast majority will be a little bit more sceptical of an initiative that smacks of spin rather than substance.

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Nigel Stanley

As part of today’s pensions announcements package the government has confirmed their review of auto-enrolment.

As we feared the review is to be wide in scope, not just looking at the detail but opening up some fairly fundamental parts of the 2012 pensions settlement. Consumer groups have already written to ministers expressing our fears about that.

To be fair, it has been stressed to us that the review does not have a hidden agenda and could well report that nothing needs changing.

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Nicola Smith

Further news from the Budget’s policy costings document – less than 10% of lone parents moved from Income Support to JSA or ESA are expected to move into jobs. The document states that:

This costing assumes that the majority of lone parents affected (90%) remain on one of the income related benefits, with the remainder moving directly into employment or off benefits for another reason

It also states that of the 10% who move off benefits, only 60% are expected to move into work, and that of these parents an unspecified proportion will move back to benefits from employment ‘at a later date (based on current evidence on jobseekers).

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