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The test of the Budget should be whether it tackles the big challenges facing our country now and in future. I shall focus on three of those challenges: the need for support for business to alleviate the inevitable uncertainty that will prevail throughout the Brexit negotiations; the need to tackle the inequality that is dividing our society more each and every day; and the need to provide sustainable funding to build a new integrated NHS and care system that can cope with ever-increasing demand. On all those counts, the Budget is a missed opportunity.
The increases to business rates and national insurance contributions for the self-employed have raised questions about the Government’s competence, integrity and business credentials. Even David Cameron has expressed concern that a clear Tory manifesto commitment has been broken. At a time when Brexit is causing so much uncertainty for business, it is unforgivable that the Government should make the situation worse, not better. Alongside that, the Budget failed to identify any measures to begin the process of mitigating the impact of the UK no longer being a member of the single market. As that is the Government’s stated objective, they have a duty to take it fully into account from now on when they introduce measures that will affect business.
Inequality is fuelled by many factors, but wage stagnation is one of the worst. The Government should commit to phasing in a proper living wage over this Parliament, not the bogus living wage they are currently implementing. I propose a register whereby every three years companies would be required to publish their profits and the pay increases they have awarded their staff, from the boardroom to the shop floor. If companies are struggling, or if they are start-ups, it is totally right that job protection, not wage rises, should be a priority. However, if significant profits are being made, it is immoral that workers are not seeing an increase in their pay.
Perhaps the most grotesque symbol of inequality in today’s society is the epidemic of rough sleeping we are seeing in many of our towns and cities. I welcome the Homelessness Reduction Bill and the work of Bob Blackman that made it possible, but it will not solve the problem alone. The Government should have used the Budget to make specific resources available to ensure that local authorities and third-sector organisations can come together to offer people who are sleeping on the streets emergency accommodation and a package of support to enable them to reintegrate into the community. In the longer term, the Chancellor must consider new ways to enable councils and housing associations to access finance so that they can build a mix of social and affordable housing.
On the NHS and social care, I welcome the extra money for social care in the Budget, but the gerrymandering of public money to favour political friends brings the Government into disrepute. The extra money will not change the fact that in the vast majority of local authorities, the eligibility criteria that determine access to publically funded social care mean that people have to deteriorate to a very poor state before they receive any help whatsoever. People whose financial means make them ineligible for funding are all too often not even offered advice and support to choose the right care and support for themselves and their families.
As a former social care Minister, I can testify that successive Governments have been reluctant to tackle the social care funding issue because there is no credible solution that will not require the public to pay more. Unlike the NHS, social care has always been means tested. Higher taxes and/or national insurance, greater individual and family contributions, payments out of inherited estates, and an insurance-based system for social care are all difficult options. Any solution, therefore, must not be a political football, and any work must be done on an all-party basis.
I am sorry to say that the Budget commitment to yet another Green Paper on social care funding matches neither the scale nor the urgency of the challenge. I reject the view of those on the right who argue that the NHS as a system free at the point of use, funded by general taxation, cannot be sustained. It must be sustained as a non-negotiable and enduring statement of unique British values.
The Government rightly talk about the importance of shifting the focus of public services to prevention and early intervention, yet their slash-and-burn approach to council funding is having the opposite effect. My local authority, Bury, will be required to make cuts of approximately £30 million between 2017 and 2020, and the situation is made worse by an unfair local government funding formula. If Bury were funded at the English average, it would equate to an additional £9 million per year. The reality is that Bury and local authorities are having to shut preventive and early intervention services rather than invest in them.
The Budget exposes, once again, the illusion that the Government have been economically competent or successful. Not only have they failed using their own measures of success—deficit reduction and borrowing—but they have failed to address low pay and the rising cost of living for too many of our fellow citizens. They have also failed to address the growing under-employment of young people, the impact of benefit sanctions, child poverty and cuts to grassroots and frontline public services, all of which are creating a deeply divided society—a division that both contributed to and was reflected in the Brexit vote.
The incompetence of this Budget has brought the Prime Minister’s honeymoon period to an end. She can talk as much as she likes about standing up for working people and those struggling to get on, but unless her Government change course, that will not happen, and furthermore, her legacy will be a deeply divided country, and a party once again viewed by many as the nasty party. That would be both an irony and a tragedy for the first Tory politician with the courage to face up to the reality of her party’s reputation.