Economy//

A budget that offered little for social liberals

Written by: Linda Jack on 24 March, 2012
Filed under Economy

For the last couple of days Lib Dems have been urged to go out and celebrate a clear Lib Dem win in the budget. The raising of the personal allowance has replaced free tuition as a totemic issue for our party. And of course I welcome it and acknowledge that it was no doubt hard fought for. But for me it’s a bit like being asked to accept a kiss on the cheek as penance for a slap in the face. Frankly no one policy, be that a Tory or Lib Dem generated policy, can be taken in isolation, it must be taken in the round to make any sense whatsoever. Okay, it’s the kind of smoke and mirrors chancellors have engaged in down the ages, but it doesn’t change the fact that the extra £250 gained in personal allowance is dwarfed against the estimated £450 per annum most people are paying in additional VAT, or the impact the cuts in Working Tax Credit will have on some families. Or the fact that for the very poorest who don’t earn enough to pay tax at the moment anyway, there is nothing for them at all.

And then there’s the reduction of the 50p rate. A confirmation if one were needed of the Tory maxim that to get the rich to work harder you should pay them more, while to get the poor to work harder you should pay them less. Isn’t that what the moves to regional pay are all about? But of course, this is going to ‘stop so many people avoiding tax’. Sorry? Where is the evidence? And if someone is already avoiding tax why would this stop them? And of course, this, combined with other measures such as the ‘tycoon’ tax will apparently raise five times as much revenue. Whatever clever wheeze Osborne has come up with to try and justify the cut, the fact is it send a clear message to friend and foe alike – we take care of our friends – and most of our friends tend to earn over £150,000 a year.

One small detail in the budget appears to have been largely overlooked, namely the freezing of the minimum wage for young people. On a personal level, having chaired the group that developed our youth policy, this really angered me. It is in direct conflict with our party policy to equalise the minimum wage and yet again sends our young people the message that we believe in equality, unless of course you are too young to deserve it.

But most worrying of all, is what is written in the small print of this budget – the need somewhere down the line to cut the welfare bill by a further £10 billion. The party declaring in its constitution that ‘no-one should be enslaved by poverty’ is signing up to tax cuts for the rich, paid for by yet again, through measures hitting the poorest and most vulnerable in our society.

There is a wonderful quote in ‘The Alternative View‘ referring to the role of the Orange Bookers in government: ‘Thus the inconsistencies which had not been ironed out before the coalition represented a vagueness of mission which has been carried into government by the Orange Bookers. Their narrative would necessarily be defined by decisions, rather than the narrative determining what those decisions should be.’ This is exactly what we have witnessed in this budget, attempting to claim that success in regard to the accelerated raising of the personal allowances somehow mitigates entirely any failure to hold fast to declared Lib Dem principles and values in the round.

For social liberals, seeking to grasp the most slender straw of comfort from this budget, it offers little. It reinforces the fact that the most we can claim as a party is that we are ‘mitigating the worst excesses of Tory government’. Yes, we may have helped those on lower and middle (oh and upper?!) incomes, but still the poorest, the working poor and those on benefits, will be hit even harder.

A budget for the millions? Well plenty of the millions seem to be up in arms today. A budget that will make our society fairer and more equal, where no one is ‘enslaved by poverty’? I don’t think so.

Linda Jack is Chair of Liberal Left and a member of the Federal Policy Committee of the Liberal Democrats.