THE BLOG

Don't Let the Piecemeal Policies Distract - This Is a 'Tory' Budget

10/07/2015 15:08 BST | Updated 10/07/2016 10:59 BST

Wednesday's budget has been perceived as a not particularly 'Tory' budget, it's been described as an exercise in political 'cross dressing' by the FT and it was the consensus at a briefing by Edelman on Thursday morning featuring panellists, Alistair Darling, former Labour Chancellor; Liam Fox, former Conservative Defence Secretary; and Ian King, Sky's Business Editor.

Of course there are policies that George Osbourne has taken from Labour, such as the policy on non-doms and the welcomed increase to the minimum wage but that's the beauty of being in Government, you can pick and choose the other team's good ideas and pass them off as your own, and each side is as guilty of that as the other.

Aside from those few policies, the budget is a truly Tory.

One of the main policies announced was the reduction in Working Tax Credit. First things first, these are not 'welfare benefits', they are top ups to support people on low incomes to ensure it is financially beneficial to work. Osborne suggested these changes wouldn't have a negative effect on recipients as they'd benefit from a new higher minimum wage (sneakily renamed the 'Living Wage' when it is not the level of the actual Living Wage recommendation, and only available to those aged 25 and over) and a higher level of tax free income raising from £10,600 to £11,000.

In reality, independent research by The Social Market Foundation has shown the changes will see a family with two children and one adult receiving £255 more from the higher minimum wage (once deductions are made) but down £1612 due to the tax credits changes. This change will leave that family worse off, and could make working unaffordable since the tax credits exist to top up low salaries to ensure work pays so we have less people unemployed.

Another Tory response is that families won't be worse off because businesses should be responsible and pay decent salaries, but this rests on the premise that businesses will actually do this. Evidence to date suggests they won't, since they haven't. And a 2% reduction in Corporation Tax isn't suddenly going to make them glowing philanthropists.

It also assumes those getting Working Tax Credits all work in the private sector, they don't; those who work in the public sector will face a double whammy of a 1% pay freeze for the next four years, that's after already having had a 1% pay freeze for the past five years. The Government can't expect businesses to pay higher salaries to offset the changes to Working Tax Credit when they don't do it themselves.

At the same time, Osbourne has announced he is raising the threshold for paying inheritance tax on properties to £1million. Great, if you own a home over £1million, but there's not one house in my home town worth that much and I suspect it's a similar situation across large parts of the UK outside of London. Contrast that to the millions of people affect by the changes to Working Tax Credit and Child Tax Credit.

The Government claims we're all in this together but this is a budget for the few not the many.

Osborne also announced he'd be scrapping bursaries for university students from low income households (although any household earning under £45,000 will be affected), at the same time as opening the door for tuition fees to rise beyond £9,000. A student affected by the scrapping of bursaries will now face around £10,000 more debt that they would otherwise so they're likely to start their career owing more than £50,000.

Feminists have long spoken of the triple burden hitting women - the demands of paid work, caring for elderly relatives and childcare, it now seems young people are also hit with a triple burden, the burden of student debt in excess of £50,000, unpaid internships and deposits of around £40,000 to get on the property ladder in London. If you're in a low paid job and under 25 you're apparently too young and undeserving to benefit from Osbourne's rebranded minimum wage, too. The situation looks pretty bleak for young people unless you're one of the lucky few whose parents can pay for you throughout university including living costs and tuition and then give you a deposit for a house.

The perception that this is not a 'Tory' budget is a con. Osbourne said there'd be a 'ripple effect' so everyone will benefit from his budget, it sounds a lot like the 'trickle down' economics the country was promised by Thatcher's Government that left large swathes of the population devastated. The champagne didn't trickle down to where it was needed most last time and it won't have a ripple effect this time either.

It's a budget of which young people and those working on the lowest incomes are the biggest victims. Don't let the piecemeal soundbite policies distract from that. It's a political master class in creating the perception of centrist policies while pursuing an ideologically right wing economic agenda that appeases those who turn out and vote, older people and the wealthy.