A "nothing changes" budget

The Chancellor, Jeremy Hunt, finished his speech on an upbeat note: “Inflation down, debt falling, growth up.” Well, that’s certainly world-beating perception management. It’s all true, but fails to mention that inflation at the end of the year will still be at 2.9%, nearly half as much again as the 2% target level, [government] debt is predicted to fall, but will still be 30% above the acceptable level, and growth, at a predicted 0.2%, is the lowest in the G7 and a tiny fraction of the 3% the politicians would like to see. It is hard to see how the budget is likey to do anything to make the UK a happier place. We have three major social/economic problems in Britain, inequality, poverty and low productivity. The budget does little or nothing to alleviate any of them. In fact, inequality and poverty are likely to become worse Our level of inequality is unacceptable because it is so demonstratively unfair. People on average incomes and below, however comfortable in absolute terms their lifestyles might be, cannot be expected to be satisfied with their lot if the people at the top are creaming off shedloads. Examples abound. According to figures in last November’s “Prospect” magazine Lloyds Banking Group pays its CEO £8.9m a year, 255 times the average pay (£28, 005) of the lower quartile of employees. For Greggs its £2m, 98 time £19, 824. In 2022 the UK the median household (not individual, household) income was £32 300. An income sufficient to allow them to increase their annual pension pot contribution from £40 000 to £60 000, as permitted by this budget, would be beyond their wildest dreams in a different world. While assisting the well-off to become even better off, the budget does little or nothing to reduce the levels of poverty of which this rich country should be deeply ashamed. The cruel bedroom tax persists, as does the cutting off of benefits to the third and any subsequent children. Benefits, already inadequate, will receive only below-inflation increases. About 1 in 5 households are forced to exist below the poverty line (eg having to chose between eating and heating), over 4m children live in poverty, more than half of them in households where at least one parent is in work. Although the UK is a rich country (still sixth in the world) we would be even richer if, instead of stagnating, our economy grew at the same rate as comparable countries. The budget attempts to tackle the problem by increasing the number of workers. The availability of child care is to be vastly extended in the hope of tempting more parents into paid employment. Hence, the economy gets two for the price of one. Every sixth-former who studies economics learns that if a householder does his/her own cleaning or car repairs nothing is added to GDP. However if he/she employs a cleaner or a garage, then the cleaner’s or mechanic’s wages are added to GDP, which therefore grows. The additional child-care employee’s wages are added to GDP as are the wages of the former home-maker if he/she takes to opportunity to go out for paid employment, or, in this day and age, works from home without the distraction of keeping an eye on toddler. Surely this is the wrong tack? We have enough “stuff” and there’s enough to satisfy everyone if we leaned to share it properly. What would improve our quality of life is more leisure, more family time (including nurturing the children), more enjoying friendships, more walking in the countryside, more playing games,more time to appreciate the wonders of the world we live in. Not more work, but more productive work in less time. To achieve this we need investment. The budget’s exemption from tax for profits invested may achieve this, but what we really need is a change in the culture: to encourage those with spare money to use it for long-term investment rather that a short-term pitch in the markets.