On the day of yet another budget announcement, Hunt has just released the details of the governments latest budget proposals. Here are some of the highlights.
Means-tested benefits, including Universal Credit, will rise in line with September’s inflation figure of 10.1% from April 2023.
The National Living Wage will be increased from £9.50 an hour for over-23s to £10.42 from April 2023.
Additional payments of £900 will be paid to those on means-tested benefits such as Universal Credit, £300 will be paid to pensioner households and £150 to people on disability benefits.
Pensions are to go up by 10.1% in line with inflation along with benefit payments.
Rent increases in the social rented sector will be capped at 7% in the next financial year in England.
Energy firms will now pay a windfall tax of 35%, up from the 25%.
The point at which the highest earners start paying the top rate of tax is being lowered from £150,000 to £125,140.
Electric vehicles will no longer be exempt from vehicle excise duty from April 2025.
People claiming legacy benefits won’t fully transfer to Universal `credit until 2028 rather than 2024.
Along with the budget announcements came the Autumn Statement which announced that approximately 600,000 people that claim Universal Credit will effectively be forced to work apparently despite their ability to do so. No mention was given as to how this was going to be done and how they plan to do this.
Considering that the employment rate for people claiming Universal Credit was 41% in June 2022, how are these people going to be able to commit to this?
Are they sick and or disabled?
Do they have caring and childcare commitments?
What real life skills do they have to enable them to find a suitable job?
As of`July 2022, 2.4 million Universal Credit recipients are working.
1.7million are disabled with no work requirements.
1.4 million are searching for work.
400k are preparing for work.
The real problem isn’t unemployment, one of the real problems is instead low wages that don’t pay enough to live off thus the need to be topped up by Universal Credit.
The language that the DWP and government uses towards Universal Credit claimants is also questionable.
The DWP say that ‘Claimants will be asked to attend a meeting with a work Coach’. However they don’t mean ask, they mean must attend despite whatever commitments a person might have and their ability to do so.
As I’ve stated many times in this blog a failure to attend will result in a sanction being given to the claimant which always results in any benefit payments that they receive.
Another reason as to why some people, mostly women can’t find a suitable job is the cost of childcare.
At the time of writing childcare providers are shutting at high levels. Last year a total of 4,000 childcare providers couldn’t afford to keep their doors open and were forced to shut. Undoubtably this will increase in the coming year this will result in fewer available childcare places and increasing costs.
For two thirds of working parents the cost of childcare outstrips their rent or mortgage payments. Research undertaken by the Women’s Budget Group has found that over the last decade childcare fees have steadily increased at twice the rate of wages.
What is needed is more investment in childcare and childcare providers. This would provide three times as many jobs and if done correctly could potentially boost the economy by £28bn.
Childcare as well as being essential pays for itself It essentially will gain increased tax revenues and reduced benefits expenditure, but still there no mention of this.
Rather expectedly nothing that was announced in Hunts budget will target the richest. Yes freezing thresholds are expected to hit middle income households and cutting spending will hit lower income households the hardest. As they say, it’s expensive being poor.
Where is the increased tax burden on high income households? Why aren’t wealthy households being taxed more?
Why isn’t there an increase to capital gains tax rates, income tax, inheritance tax or stamp duty?
Once again the poorest and most vulnerable will pay the highest price whilst the richest will escape unscathed, ready to profit off the backs of those much worse off.