Did the Budget Pass the Fairness Test?
We had a fascinating briefing here at Congress House yesterday, an opportunity to hear about the impact of the Budget on the poorest people.
I thought it made a very strong case that the Budget measures will have a very unfair impact on poverty and inequality.
About seventy people from unions, anti-poverty campaigns and charities came, and the briefing was chaired by Lesley Mercer, the Director of Employment Relations and Union Services at the Chartered Society of Physiotherapy.
The first speaker was Tim Horton, Research Director of the Fabian Society. Tim emphasised the fact that most discussion about whether the Budget was fair had concentrated on the benefit and tax changes, but the forthcoming £34 billion of public spending cuts would be even more important. Spending on public services is ‘pro-poor’, so cutting them tends to hit the poorest hardest. I thought the most enlightening part of his talk was his point that all the discussion about the fairness of the increase in income tax personal allowances had only looked at the impact of what amounts to a tax cut. Few commentators had taken into account the service cuts of £3.7 billion that would be needed to pay for it – when that was included, the regressive impact was clear. The government insists that they have no alternative to the cuts they plan – but no one forced them to go ahead with this measure.
The next speaker was Prof Ruth Lister, of Loughborough University, speaking about the impact of the Budget on women and families. A posting based on Ruth’s speech is already up on this site. I was particularly struck by her point that this Budget, which was marked by cuts focused on families, was passed by parties that claim to be ever so family-friendly.
Finally we heard from Richard Capie, Director of Policy and Practice at the Chartered Institute of Housing. Richard gave a fascinating talk that began with the housing policy background, but what stuck in my mind most was the section on Housing Benefit. Richard pointed out that, at £21 billion, HB represents 80 per cent of all public spending on housing, so changes don’t just have an effect on claimants, they have a huge impact on the housing market as well.
From next year, HB will be ‘capped’ at £250 per week for a one bedroom property, £290 for 2 bedrooms, £340 for 3 bedrooms and £400 for 4 or more. Richard pointed out that, of the 32 London boroughs, there are only 4 where you can rent a house or flat for less than this at present. Then, when indexing in line with the Consumer Price Index (usually less than housing inflation) kicks in, even those boroughs will be squeezed. On top of all this, the 10 per cent cut in HB for people who have been unemployed for over a year will make it even harder for the poorest families to hold on to their homes.
The cumulative impact is likely to be that landlords will refuse to rent to people on HB or JSA and unemployed tenants will be concentrated in a handful of poor areas. Speakers from the floor pointed out two extra horrors:
- Lone parents, who will have to move from Income Support to Jobseeker’s Allowance once their youngest child is five, will find themselves hit by the HB reduction, so children will be made homeless.
- Disabled people – a million are going to be forced off DLA and ESA – will be disproportionately likely to spend over a year on Jobseeker’s Allowance. We already know that disabled people who claim JSA take much longer than non-disabled claimants to get jobs and this will have only got worse in the recession.
My contribution to the discussion was to point out that unions are keen to work with anti cuts campaigns being organised by community groups, charities and anti-poverty organisations. If you have details of a campaign you are involved in, do let us know.