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March 25, 2014 - Bill Esterson's Westminster Diary

Bill Esterson

According to official figures, the economy is recovering but for most people on middle and low incomes that recovery has passed them by. Since 2010 when the coalition came to power, wages are down £1,600 a year according to independent analysis.

So after the budget will anything change?

The budget was notable mostly for its lack of any action to address the dramatic falling living standards. There was nothing about an energy price freeze to help pensioners and families struggling with soaring bills. There was no help for families with rising childcare costs this side of the election. And no action to get young people stuck on the dole into paid work. 

The only real measure which will affect people’s standard of living was for the very richest who will still get a £3billion a year tax cut. And the government has also refused to rule out giving millionaires another tax cut.

What is needed is a change of policy to help ordinary people facing a cost of living crisis combined with measures to get the deficit down in a fairer way. 

We should freeze energy bills, expand free childcare for working parents and help 24 million workers with a lower 10p starting rate of income tax. 

We should back small firms by cutting business rates and balance the books in a fairer way by reversing the huge tax cut for people on more than £150,000. 

We should build more affordable homes to help the economy - and by the way it would help cut the housing benefit bill at the same time.  

We should start a Compulsory Jobs Guarantee to get the young and long-term unemployed back to work and we should scrap the Bedroom Tax, which is not only unfair but may end up costing rather than saving money. 

Sadly, the chancellor, George Osborne did none of these things but the people of this country need a change of direction which helps the majority of ordinary people in this country not just the top 1%. It will take a change of government to achieve such changes.

While there was nothing in the budget for most people of working age, the budget did have a change in pensions which means people will be able to spend their pensions in a very different way. 

This change follows the work of the all party Work and Pensions Select Committee and is a reform that has been broadly welcomed. 

The chancellor is hoping that pensioners will spend more of their money earlier to help boost the economy. Of course there are downsides including in what happens if too many pensioners spend all their money early and then need additional support after their money has gone. But possibly of greater concern is the track record of the pensions industry.

Pensioners will be offered new financial products. It is to be hoped that regulation will prevent a repeat of the mis-selling of products which happened in the 1980s but as ever with a massive change of this type, the devil will be in the detail.

Finally, the government offered a penny off a pint and cuts in the tax on bingo. 

The Tory Party Chairman, Grant Shapps made a rather ill-judged comment on Twitter about beer and bingo. 

Referring to ordinary people, he said that enjoying beer and bingo was what “they” did. Sadly, instead of giving a positive impression of the budget, all Mr Shapps managed to do was suggest an “us and them” mentality at the heart of government. 

Britain really does deserve better than that.


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