Tory – Lib Dem Budget will hit Streatham hard
Last week the new Chancellor, George Osborne, made the Conservative – Liberal Democrat coalition government’s first Budget announcement. He described its measures as “tough but fair”, but a closer look at the policies proposed shows that, though the spending cuts are undoubtedly tough, they are also extremely unfair.
This is a budget that will hit the poor hardest, and places like Streatham will suffer most.
The measures announced by Chancellor George Osborne included a cut in child benefit in real terms, the abolition of the Health in Pregnancy Grant for new mums and Child Tax Credits set aside for parents of new-born babies.
The 25% cuts to public spending threaten to increase unemployment and could put large numbers of Streatham residents on the dole queue. Public sector jobs make up a larger proportion of employment in Lambeth (36%) than in London as a whole (23%) and, as Colin Talbot of Manchester Business School has predicted, one in five public sector jobs could be slashed to make the cuts promised in the budget.
The VAT rise (from 17.5 to 20%) is also unfair on Streatham. As Save the Children has said: “A 20% VAT rate means that the poorest parents will see their VAT bill rise to at least £1,600 a year – affecting already overstretched budgets – and driving some into the arms of loan sharks.”
The cut in Child Benefit will affect no fewer than 25,160 children from 14,735 families in Streatham.
The abolition of the Future Jobs Fund will cut the 198 jobs, apprenticeships and training places that the fund provides for young people in Lambeth. The government’s own figures show that, by cutting so deep and so quickly, the budget will reduce economic growth and increase unemployment by 100,000 – this too is bound to be felt locally.
The budget did not specify whether or not the government will cut the Building Schools for the Future programme, increasing uncertainty amongst parents and teachers at those three Streatham schools where it is unclear whether planned building work will go ahead – Dunraven, La Retraite, Bishop Thomas Grant.
So whilst Labour’s plans to reduce the deficit would protect the vulnerable and invest in growth; the Tory-LibDem plans put the greatest burden on the poorest and risk slowing the recovery.
In fact, a study by the Fabian Society and Landman Economics has shown that whilst the richest 10% of households will be 1.6% worse off as a result of this budget, the poorest 10% will be 20.5% worse off. Streatham is in the 19th most deprived borough in the country – and it is in constituencies such as this that the pain inflicted by this budget will be felt most strongly.
During the recession in the early 1990s, unemployment in Streatham was 56% higher than when Britain emerged from recession under Labour earlier this year. It is feared that the new government’s approach, in line with that adopted by the Conservatives in the 1980s and 1990s, could lead to higher unemployment.
The independent body set up by the new government to review economic policy, the Office for Budget Responsibility (OBR), has responded to the plans in the Budget by revising down its employment predictions by 100,000 and downgrading its growth forecast for next year from 2.6% to 2.3%.
