Osborne has stolen Labour’s language, but make no mistake: this Budget will just increase inequality

“This will be a budget is for working people” – George Osborne opened his speech today with these words. From this point on it was obvious that the first Conservative Budget in 18 years was going to be as bad as we had all feared. And it would be wrapped in Labour packaging.

The Chancellor made a clever but entirely disingenuous political move; cloaking his policies in Labour’s language to create the illusion that they would help to achieve an equal society (he’s even tried to hijack Labour’s non-dom policy). Make no mistake, there was nothing fair about this Budget – this was all about increasing not reducing inequality.

The policy details, which run entirely counter to Osborne’s rhetoric, say it all:

–Committing to a ‘National Living Wage’ for over 25s. This was met with raucous cheers from the Government benches. It does *sound* great (unless you’re under the age of 25, in which case you apparently don’t deserve a decent wage). But how it sounds isn’t the same as what it actually means. Osborne wants to set his “living wage” at £7.20 by April 2016. The Living Wage Foundation have already recommended that outside of London it should be £7.85. So he’s already 65p short.

And this £7.85 figure – which he’s failed to meet – is calculated in relation to tax credits, which are being cut. In fact, the Resolution Foundation have said that if tax credits are under the axe, the actual living wage should be well over £12 (and that doesn’t take into account inflation). Osborne’s announcement doesn’t sound so much like the Living Wage anymore now, does it? And if you’re working in the public sector, your pay rises are capped at 1% for the next four years.

–Restricting tax credits and Universal Credit to two children. After April 2017 if you need financial help, you’ll only get it for two children. If you have any more, you’re on your own. This is supposedly an attempt to stop so-called welfare dependency, but all it does is discriminate against people who are on low pay. The message is poor people shouldn’t be allowed to have more than two kids. This has a strange whiff of eugenics about it, as Dawn Foster has noted, and will just hurt children.

–Freezing working-age benefits to be frozen for four years – that includes tax credits and local housing allowance. Similarly, ESA will be cut to the same level as Jobseeker’s Allowance, disabled people who are both in an out of work could see a loss of up to £30 a week. The government are also lowering the benefit cap – again –  to £23,000 in London and £20,000 outside of it.

Let’s call this what it is: an attack on the poor. Osborne claimed that this was part of the Government’s effort to end the “lifestyle” of those claiming benefits, as if it’s a choice. For the vast majority it’s not.

–Cutting corporation tax to 19% in 2017 and 18% in 2020. Under Osborne’s stewardship, corporation tax already dropped from 28% to 20%, making it the lowest in the G7. Now they want to cut it even further. This means that wealthiest can shelter their income from tax at lower rates than ordinary peoples’ pay. All part and parcel of his budget “for working people.”

–Replacing maintenance grants with loans. This is a tax on the poor. Scrapping this crucial lifeline for many, will mean poorer students end up in more debt than their richer peers.

–Increasing the personal tax allowance to £11,000 next year. Sounds good. But research has shown that increasing the personal tax allowance helps people on higher incomes than it does those at the lower end of the income spectrum. Put simply, this policy just widens inequality.

– Abolishing housing benefit for 18-21 year olds. It seems he’s working under the mistake assumption that all poor young people who fall in this age bracket a) have parents and b) have parents who can afford to have them live home.

Osborne can use describe his plans using whatever words he wants but this is not a budget for working people. And it will only serve to increase inequality.