Chancellor George Osborne prepares to deliver the 2016 budget. Photo: Frank Augstein/AP/Press Association Images
#Budget2016: TUC reaction roundup
The Chancellor, George Osborne delivered the 2016 budget yesterday, here is a quick round up of reactions from our TUC bloggers:
Public Service cuts
The spending cuts will be identified through an ‘efficiency review’. Cuts and increased pressures on departmental budgets presents a great challenge to public services which are already stretched due to previous cuts.
This is a major attack on national pay bargaining. Academies are exempt from national pay bargaining meaning the government is doing away with national pay setting structures for school staff. This could lead to national pay bargaining to be less efficient, more chaotic and could lead to costing employers more in the long run.
The overall government debt is up more than had been anticipated. Borrowing has increased over £50bn more than the Chancellor had originally planned.
Under the Chancellor’s 2010 plans, the public debt ratio was meant to peak in 2013/14 and then start falling. Then the target moved to 2014/15. Now it is due to peak in 2015/16, with debt currently running at 83.7% GDP.
Pensions and savings
Public sector employers will be faced with a £2bn increase in contributions to unfunded public sector pension schemes by 2020.
From April 2017 anyone under 40 will be able to open a Lifetime ISA. They can save up to £4,000 yearly and will receive a 25% bonus from the government on every pound they put in. But the money can only be withdrawn to buy a first property or after the age of 60.
The government’s idea is for UK to become a world leader in smart technologies, including electricity storage. Energy storage is a major issue, but allocating £10m a year isn’t going to get us that far.
Both are measures that will mainly benefit men – whilst the Chancellor is also making cuts to vital services and benefits for people with disabilities.
Real earnings are set to grow even slower than previously forecasted. We’re already living through the longest wage squeeze in UK recorded history.
Real earnings grew in 2015 by 2.5%, for the first time since 2007. But they are now expected to grow by only 1.9%. The forecast for average earnings is revised down to 2.6% from 3.4%.
In June 2010 the Chancellor imagined a future where real earnings would recover in 5 years; this doubled to a lost eleven years. Now workers face at least a dozen years of falling living standards.
We are still building far too few houses to escape from the crisis. Having a bigger population than ever before, last year England saw 21,000 fewer houses completed than 40 years ago. This is not a record to be proud of.
Analysis and blogs from the TUC on the Budget Review 2016 can be found here.